It's hard to have a conversation about Canada's economy these days without it touching on our natural resource wealth, and the global reach of our mining companies.
But there's one part of this conversation that Canadian provinces may be missing: how they can become global leaders in a burgeoning international effort to improve governance and transparency in the extractive sector. Should they choose to meet the challenge, they would get support from an unexpected coalition of partners.
Following over a year of dialogue, civil society organizations and the Canadian mining industry have taken a united stand for transparency in the mining sector. In January of this year this unique collaboration -- known as the Resource Revenue Transparency Working Group -- published recommendations that call on Canadian governments (federal and provincial) to implement strong standards requiring that mining companies report the payments they make to governments both at home and abroad. For the members of this group -- the Mining Association of Canada, the Prospectors and Developers Association of Canada, Publish What You Pay Canada and the Revenue Watch Institute -- these recommendations provide a blueprint for the creation of a new transparency standard for the mining sector.
The recommendations conclude that provincial governments and securities regulators are best placed to create laws and regulations that require all publicly traded mining companies in Canada to make public the payments they make to governments, both at home and abroad. These recommendations follow over a year of cross-country consultations, numerous meetings, feedback and expert advice, and detail a transparency standard for mining company payments to governments that is aligned with those already passed into law in the European Union and the United States.
Action by provincial governments to improve transparency and implement these recommendations is critical. Canada is home to over 60 per cent of the world's publicly traded mining companies, and with over $200 billion invested in over 100 countries, new transparency standards in Canada can positively impact the lives of citizens around the world.
For governments worldwide, mining revenues hold promises of change: the opportunity to increase infrastructure and social investments and a chance to establish broad-based economic growth. In Africa, where Canadian mining investment has grown from 6-billion in 2005 to 31.6-billion in 2011, translating mounting resource revenues into solid development outcomes isn't just important, it's essential.
Unfortunately, too often, citizens, elected officials, municipal and state governments remain in the dark about the natural resource revenues received by their national governments. This environment fosters corruption, mismanagement and sometimes armed conflict, and prevents citizens from receiving full benefit from their minerals.
By shedding light on these payments, the Canadian mining industry and civil society groups hope to create a credible source of information that citizens can use to hold their governments accountable. Similarly, subnational governments can use the information to ensure they receive the transfers allocated to them by law which can in turn fund badly needed social services like healthcare and education.
Companies benefit by clearly demonstrating the economic contributions of their projects and the stability that is generated when citizens are truly benefiting from their natural resource wealth. Investors have also echoed their support and desire to see information on the payments made by their companies to governments. Last year, Canadian investors with $362 billion in assets under management signed a letter reinforcing their support for the efforts of the Resource Revenue Transparency Working Group and this year a similar call was issued by international investors managing assets of $5.8 trillion.
The recommendations issued today not only unite Canadian mining industry associations and civil society groups in support of transparency, but they represent a concrete policy proposal to governments, outlining who should disclose which payments and how that disclosure should be made.
It is critical that Canada's federal and provincial governments heed this call and implement the full list of recommendations. Last June, Prime Minister Harper announced that Canada will develop new transparency requirements for Canadian oil, gas and mining companies. With this announcement, and the passage of similar laws in the EU and U.S., the stage is set for Canada to become a leader in natural resource governance. But the federal government cannot do this alone. They need the provinces to step into the international spotlight and to take a stand on transparency.
For Canada's provinces, this is a chance to make waves on a global stage -- to help foster stable investment climates, provide investors with a key source of data, contribute to global anti-corruption efforts, and support good governance and development. This is an opportunity to take the common ground established through hard work, trust-building, and a lot of discussion between industry and civil society, and make it a reality.