Debates of Jan. 31st, 2014

Combating Counterfeit Products Act

[Erin O'Toole, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, I would like to thank my hon. colleague and friend from the trade committee for this thoughtful speech in the House on this important subject.

I would note one question. Both the member and members of his caucus have suggested yet another round of study or audits and consultation, when he knows that there are goods that pose risks now to Canadians. He knows well that for the last decade, industry has been asking for these safeguards. Would the member not tell this House that it is better to move quickly than to suggest further rounds of committee study and audits?

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I want to take this chance to tell the hon. member that it is a pleasure to work with him at committee.

What is really important in this case is to make sure that we start collecting meaningful data not only to make sure that we understand the scope of the problem but to track our progress.

According to RCMP Superintendent Ken Hansen, the former co-chair of INTERPOL's intellectual property crime action group, the RCMP can only investigate 25% of the goods the CBSA Toronto office flags as being fake. Only one-quarter of RCMP investigations and seizures of counterfeit products were potentially harmful to consumers in 2011, but that proportion has steadily risen from 11% in 2005. That tells us that we are seeing more counterfeit products. We are indicting them, but we are unable, with the resources we have, to actually fully investigate them. Those products are becoming more and more harmful to the Canadian public.

I agree with my hon. friend that we do not need to hear anymore about the existence of the problem. We know it exists. However, obtaining data so that we can more clearly understand what is happening and put resources in the right places to address that problem is simply smart implementation of policy.

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, I thank the member for Vancouver Kingsway. I learn so much every time he speaks in the House. I appreciate that, since it helps me understand the bill and understand why we will support it. It also helps me understand the limitations of the bill.

The member spoke about something that worries me a great deal, which is that we are missing a lot of data. This government is not really concerned with that. Ever since it eliminated the long form census, it has been hard to keep track of things. We are less and less knowledgeable about what is going on. The member referred to that in his response to the question from the member for Durham.

Organizations like the OECD have clearly stated that there is a need for better data on counterfeiting. It is not just the RCMP that is calling for this information.

Could my colleague tell me why the government has not managed to gather better data on this issue or to propose some kind of plan to more effectively collect data? The Conservatives want to pass the bill as quickly as possible, but we need to know what we are dealing with. We need to know what this will entail and who will be affected.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I would like to congratulate the member for the wonderful job she has been doing representing the justice file in this country and for helping to build a progressive, responsible justice policy for us. I was going to joke and say that every time I rise in the House, I learn something new too, often by accident.

My hon. friend raises the issue of what the OECD has said. Here is what the Canadian Chamber of Commerce Canadian Intellectual Property Council has said:

...the Canadian system has no tools to track and report on the instances of counterfeiting that are actually detected in this country. According to European Commission regulation 1891/2004, customs authorities in all EU member states are obliged to report statistics on customs seizures.... the CBSA does not have a mandate for reporting...crimes at the border....

In other words, the position of the Canadian Chamber of Commerce is that the CBSA, in addition to the RCMP, should and must include the combatting of intellectual property crime as part of its mandate. I think that is a very wise suggestion by the Canadian Chamber of Commerce, and I would urge the government to pay attention to that, because the New Democrats will certainly be pushing for that kind of data collection.

Before I sit down, I would say that we often hear politicians talk about red tape and creating regulations. Certainly there are cases when there are regulations that are unnecessary that ought to be reviewed, but regulation is also at the heart of enforcing good policy. The best policy in the world is not worth much if we do not have the resources to actually meaningfully track and deal with the problems. That is the difference between wise regulation, effective regulation, and red tape. I urge all members of the House not to lose sight of that distinction.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I would like to commend my colleague on his speech. Knowing his good intentions and his hope for a better country, I cannot help but notice that he raised the good work done by the committee and validity of the bill.

I have a question for him. Does he believe that the righteous attitude by all the parties will carry over into the implementation, more specifically with regard to financial support for the Canada Border Services Agency?

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, hope springs eternal. We on this side of the House believe in a well-financed government. We think Canadians see an important role for government to play, particularly when it comes to enforcing basic rights and freedoms in our country.

The ability of businesses in this country to make money and to protect their intellectual property rights, and the wishes of Canadians as consumers to protect their rights and their health and safety are things that require us as politicians to make the investments.

Unlike people on the other side of the House, who view government expenditures as unnecessary costs, I view them, and I think the NDP views them, as investments in our country. We will continue to urge having a well-financed federal government. The government has gone on quite a cutting splurge, and I think we need to be aware that cuts to these areas are not going to be a way to implement policy.

I cannot say that I am optimistic, given what I have heard about the government's budget intentions. We are seeing cuts across the board, across departments. We are seeing the closure of veterans' offices and coast guard services and cuts in the number of CBSA officers. I think that is regrettable. New Democrats will stand against those cuts that put Canadians at risk.

[The Acting Speaker, Conservative, Barry Devolin]

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act

[John McKay, Liberal, Scarborough—Guildwood, ON]

moved that Bill C-474, An Act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments, be read the second time and referred to a committee.

Mr. Speaker, that is an exceedingly long name for a bill. Possibly, the name might even be longer than the bill itself. I have been referring to it as “the sunshine bill” because the notion is clearly that payments made by the extractive sector to various entities, that the light of sunshine be shone upon them so that all can see what is happening, but also that it acts as a disinfectant to what is the pernicious problem of corruption.

There is a broad consensus among civil society, NGOs, and the industry, and some governments that there has to be something done about the payments and the corruption involved in a variety of enterprises, particularly involving the extractive sector: that we need to have increased transparency and to curb corruption.

Indeed, recently PDAC, the Prospectors and Developers Association of Canada; MAC, the Mining Association of Canada; Revenue Watch Institute; and Publish What You Pay came together to say the following, as stated by Pierre Gratton, Mining Association of Canada's president and CEO:

The Canadian mining industry is fully committed to improving transparency in a way that aligns with global standards. Today's launch of the draft framework, which was developed hand-in-hand with our civil society partners, is an important step forward to help reduce corruption and build governance capacity, while showcasing the positive contributions we make to the countries where we operate.

Clearly, among governments, the United States has been the lead government through the Cardin-Lugar amendment to the Dodd-Frank bill. It is a very dramatic amendment because it says that every year within six months of a corporation's year-end, the corporation must file a statement saying whom it paid, how much it paid, the currency it paid, et cetera. If it fails to file, then it will be de-listed from U.S. stock exchanges. It is a very draconian sanction, and it shows the seriousness with which the United States takes the issue of corruption.

The European Union has passed similar legislation. The United Kingdom is in the final stages of drafting a bill. Prime Minister Cameron made it a central issue of the last G8 meeting in Ireland. He and his fellow summit leaders were even able to get our Prime Minister to say that he is in favour of transparency, “empowering people to hold governments and companies to account”; indeed, “progress towards common global reporting standards to make extractive industry payments more transparent”.

That was a commitment signed by all G8 leaders, and this, frankly, is a big change from the last G8 summit when our Prime Minister refused to endorse a similar communiqué.

So we take progress, however incremental, and we take some encouragement from that, even though the former president of Revenue Watch Institute, Karin Lissakers, said publicly that Canada was out of step with other countries on upping their game.

It is trite but true that Canada is the most important mining country in the world. We have something like 8,000 interests in a variety of properties in a variety of countries, something like 100 of them. That is 8,000 mining sites, or mining sites that are in the process of being developed. Yet, the government continues to dig in its heels. It was only last December that the public service launched a review of corporate social responsibility strategy for the extractive sector. A review is not a commitment to a legislation. A review is not draft legislation or regulation.

The United States is out of the blocks. Their legislation came into place as of September this past year. The first filing period will be September 2014. Also out of the blocks is the European Union, and the United Kingdom and others are following suit.

We, on the other hand, have a review, and maybe in the fullness of time before the end of this Parliament, we will have a bill to look at in this Parliament. However, Mr. Speaker, you and I know that legislation sometimes has a tortuous path, particularly prior to the dissolution of a Parliament, and it is not realistic or likely that a bill, such as what we see in the United States, would be put forward by the government for Parliament to debate.

Industry, on the other hand, is frankly a million miles ahead of the government. Pierre Gratton, again of the Mining Association, has said:

There was a little bit of a surprise that industry is asking for more regulation. But there are business reasons for doing this, and sometimes additional regulations is actually good for business.

Business can only carry the load so far. The best companies operate at the highest ethical standards, but they are frankly helpless when less ethical companies bribe their way into lucrative concessions. Regulation and legislation are not for those who wish to be transparent. Regulation and legislation are for companies that wish not to be transparent or to be less transparent. It frustrates the CEOs who want to do the right thing. It makes him or her unnecessarily vulnerable and, frankly, it trashes Canada's reputation.

I want to take the opportunity to relate a conversation I had with one of our Conservative colleagues, whom I quite like and respect. He had just returned from Africa and was commenting on the endemic corruption he had witnessed. However, he said that he would not support my bill because “...corruption is a way of life there, and frankly there is nothing you can do about it, so why bother?”. He did not add, but I will add, that if Canadian companies do not bribe, they will lose business, and that I am just being naive.

There are two sides to corruption: the demand side and the supply side. I do not expect that Bill C-474, the sunshine bill or any other bill, frankly, will stem the demand side. That would be naive. However, we could possibly just slow down the supply side of corruption, because every CEO and every project manager would know that their company would have to file sworn statements that this money was paid for this concession to this government or entity on this day in a particular currency, and failure to file would be an offence. In my proposal in Bill C-474, it would be a finable offence, and on the U.S. side, it would be a delisting offence.

Maybe SNC Lavalin would not be in the mess it is in today if something like the sunshine bill had existed. Maybe their executives would not be facing criminal charges. Maybe their stock prices would not have been hammered, as they have been in the last year. Maybe SNC Lavalin and their related companies would not have been cut out of World Bank business for the next 10 years, and maybe we would not see the headline that we saw on The Huffington Post and the Financial Post this morning, which said:

Canada has the dubious honour of being home for the largest number of firms on a World Bank blacklist of corrupt companies.

I want to point out that this is one occasion where I think a headline is misleading. The article goes on to say “Of the more than 600 companies now listed as barred from doing business with the World Bank over corruption, 117 are Canadian, the most of any one country”. However, further down in the article, it states that 115 of those 117 are related to SNC-Lavalin in some manner or another.

Therefore, this is a case of the headline of an article being misleading. Nevertheless, if people live in a fantasy world and believe that Canada is as pure driven as the snow, then I would ask them to take another look at that.

If we had legislation in place, maybe Griffiths Energy would not have been fined $10 million. If we had legislation in place, then Niko Resources would not have been fined $9.5 million. I am not so naive as to believe that Bill C-474 would have ended all of these problems, but I do know that legions of lawyers will be reminding their bosses of their filing requirements under the bill.

I commend the government for its initiatives on S-14, an act to amend the corruption of foreign public officials act. It was a good idea. It has put resources behind prosecution, which is a good initiative. It is a good idea to beef up the Criminal Code and its anti-corruption measures. When it comes back to the House, we will support it.

However, when a prosecution is launched, it means that the horse is already out of the barn and that a crown attorney has concluded that he or she has a reasonable chance of a successful criminal prosecution. I would suggest that it is much better to put resources toward keeping the horse in the barn. That is what Bill C-474 does.

The government has also taken other CSR initiatives, such as $25 million for the CSR centre in Vancouver. That is good. There is nothing wrong with that. It is not clear to me what it has accomplished at this point, but I think it is a good initiative on the part of the government.

The initiative that has been an unmitigated disaster is the CSR counsellor. It was a mandate that was designed to fail, and it did. I believe it was in 2009 that Counsellor Marketa Evans initiated two or three files. Last October or November, she resigned. It cost millions of dollars and there is no longer a head of the office itself.

Here we are with a modest regulatory initiative with which the House could put Canada back in the game. It is a simple bill, with a clear aim to promote transparency. It is largely a photocopy of the U.S. legislation. In the various times I have been speaking with industry, I proposed that if it has a filing with the Securities Exchange Commission of the U.S., to photocopy it and send it to us. I do not intend or want to have an increased regulatory burden on the industry. However, I have some sense that this would not be well received by the government. Unfortunately, we are the huge hole in the international fence. The United States has stepped up to the plate and is the leader. The U.K. is following, and the EU and Australia are already there. We are the largest hole in the international fence because this is where the action is as far as worldwide mining is concerned.

I appreciate the time and attention of the House. I urge my colleagues on both sides of the aisle to support this initiative. We do not want to see the headlines that we saw, as misleading as they might be, in the The Huffington Post and the Financial Post this morning.

[Erin O'Toole, Conservative, Parliamentary Secretary to the Minister of International Trade]

Mr. Speaker, I am somewhat concerned that my friend appears, once again, to be launching on his perverse crusade. I find it particularly interesting, as he represents a GTA riding. The GTA is serviced by two world-class industries: the financial services industry and the mining, finance, and exploration industries, which employ thousands of people in Toronto. These organizations, through the prospectors and developers of Canada, through our CSR programs, and through the work by Dr. Marketa Evans, who he referenced in his remarks, have been making huge strides on working well here at home and overseas.

I would like this member to comment particularly on whether he has looked at the financial impact of the burdens and the detriment he is causing to that industry, and how many job losses it would lead to in his own riding.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, my hon. colleague has given a perverse illustration of my entire speech. Good regulation is good for business. That is the point.

Yes, he is right that the mining industry is very important to the GTA. It is the industry that is calling for regulation. I do not know whether he listened to my quotes from Pierre Gratton, the Mining Association of Canada's president and CEO. The association wants the government to get into the game, but the problem is that the government is not in the game. The industry is in the game, the NGOs are in the game, civil society is in the game, some provinces are in the game, and some international companies are in the game.

The consequence is that, if the government is not in the game, all of that industry will migrate to jurisdictions where there is a responsible attitude toward corporate social responsibility, rather than the "three blind mice" approach that the Conservative government exemplifies and my hon. colleague's question exemplifies.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I listened attentively to the speech and I agree with the member for Scarborough—Guildwood that the Conservative government seems to want to bring forward poisoned chalices to industry all the time. When industry asks for help, the government should be there at the plate, offering the help it needs.

The people on this side of the House are proposing reasonable regulation to be able to support our industries so that they can go forward and develop their industries, secure in the knowledge of the respectful reputation they have around the world.

This is an industry in which, around the world, there have always been some difficulties. Many countries have seen a lot of difficulties with mineral extraction and oil extraction. In many countries, the companies that are involved in this are involved in very dubious and very questionable practices.

We want to make sure that companies in this country have the full support of the Canadian people because we know they are transparent and they will be acting honourably. This bill could go a long way to that, and it absolutely deserves support so we can debate it at second reading.

When the Liberals were in power for 13 years, they could have brought this forward when they formed a majority. I do not know why they did not. Why are we asking now, in a private members' bill, which as the member suggested, is probably going to be defeated by the government, whether the Liberals are serious about this bill? If we go back to the last time this member brought a very similar bill forward in the last Parliament in Bill C-300, we see it was defeated in large numbers because there was an absence of Liberal members in the House to vote in favour of it.

Are the Liberals actually supporting this bill?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I can certainly give my hon. colleague that assurance. I would point out that we left government in 2006 and the round table report was tabled in the early part of 2007 and has never actually been acted on by the Conservative government. That is rather unfortunate, because it would actually put us at the beginning of the game, as opposed to the end of the game.

We are playing catch-up, and I do not even know if the government wishes to be in the game at all. That is my indication.

My colleague asked how much it would cost our riding. All I know is that, with the interest we might have in Griffiths Energy, we are not paying a $10 million fine. It is the same with Niko. We would not be paying the $9.5 million fine. How much do members think it has cost SNC-Lavalin over the last number of years? It has cost millions and millions of dollars. That is everybody's bottom line, including my colleague from Durham.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, it truly is my pleasure to participate in the debate on Bill C-474. Our government believes that responsible resource development includes financial transparency and accountability for Canadian companies. This transparency aims to prevent bribery and other illicit payments that lead to corruption. It will help to ensure that any payments made by Canadian extractive industries to foreign governments clearly benefit their citizens.

Canadians understand the importance of transparency, and that is why we take this issue seriously. I know that all members of the House would agree that this type of transparency is good both for developing nations and industry. That is why we are doing our part to achieve these goals.

Canada is the second largest contributor to the extractive industries transparency initiative, which puts in place reporting mechanisms in developing countries to ensure transparency.

We have also introduced a corporate social responsibility strategy that encourages Canadian extractive industries to operate responsibly and transparently worldwide. However, we are doing even more to address transparency and accountability. Our government strongly supports actions that will enable the citizens of developing countries to benefit fully from their nation's resource development. Unlike the NDP, which would rather resources remain in the ground and the economic health benefits ignored, our government is focused on a balanced approach to economic resource development. That is why we have tough rules for companies operating at home and abroad. While the member for Scarborough—Guildwood may intend that this be the overall objective of Bill C-474, the proposed legislation contains serious shortcomings, and our government is currently taking action to create an improved reporting scheme. For this reason, we oppose Bill C-474.

Unlike the member for Scarborough—Guildwood, our government is working with our provincial counterparts, industry, and the international community. This cooperation will allow for the implementation of a robust reporting regime that will demonstrate Canada's international leadership with respect to good governance of natural resources.

Members will recall that this past June, in the lead-up to the 2013 G8 leaders summit, the Prime Minister announced our government's commitment to establish mandatory reporting standards. These standards would require Canadian extractive companies to report on the payments they make to both foreign and domestic governments. Our Prime Minister's continued leadership on this issue is respected on the world stage and contributes to Canada's positive international brand. Our commitment to mandatory international and domestic reporting contributes to an emerging international standard for transparency and accountability in the extractive industries that includes the United States, with its Dodd-Frank Act, and the E.U., with its transparency directive.

The new mandatory reporting regime, announced by the Prime Minister, will focus on the following: improving transparency, ensuring that Canada's framework is consistent with existing international standards and aligns with other G8 countries, ensuring a level playing field for companies operating domestically and abroad, enhancing investment certainty, helping reinforce the integrity of Canadian extractive companies, and helping to ensure that citizens around the world benefit from the natural resources in their countries.

Canada already has a well-established financial recording system that ensures transparency and good governance of Canada's substantial natural resource revenues. The new reporting system will complement existing reporting requirements and will reinforce Canada's role as a strong supporter of transparency and accountability. This initiative will help ensure that the Canadian brand in the extractive sector stays strong. It will reinforce investor confidence in Canadian extractive companies and will have benefits for local communities, which will be able to track payments from local projects to their governments.

Canada is in a strong position to implement positive change globally. Nearly 60% of the world's publicly listed mining companies list on the TSX or the Toronto Venture Exchange, and 70% of the global mining equity capital in 2012 was raised on these two exchanges.

Canadian mining companies have mining interests worth nearly $150 billion invested in more than 8,000 properties in 100 countries. Canada has a strong record, both domestically and internationally, of supporting transparency and accountability in the extractive sector. Since 2007, Canada has supported international efforts through the World Bank's extractive industries transparency initiative. Canada has contributed more than $12 million to the World Bank'S EITI multi-donor trust fund and $10 million to the Extractive Industries Technical Advisory Facility.

Since 2009, the Government of Canada has had a corporate social responsibility strategy in place for Canadian extractive companies operating abroad. Canada has demonstrated its commitment to transparency and good government through its support of such initiatives as the African Union's mining vision, the extractive industries transparency initiative, the Canadian international institute for extractive industries and development, and new strategic partnerships with Peru and Tanzania, designed to help strengthen transparency in their oil, gas, and mining industries, which were announced in June of last year.

Canada's efforts and the recent changes to mandatory reporting standards in the extractive sector demonstrate the Canadian government's support for transparency and accountability. They are also part of a broader effort in which Canada is helping developing countries harness the potential of their natural resources to achieve sustainable economic growth and lift millions out of poverty.

The development of natural resources is an important driver of sustainable economic growth both in Canada and in developing countries. Done right, such development regularly creates jobs, contributes to poverty reduction, and provides governments with revenues to improve the quality of life for their citizens. That is why our government continues to place such a high priority on the related issues of transparency, accountability, and good governance in the extractive sector. Once established, Canada's mandatory reporting regime for the extractive sector will be a powerful tool in addition to many other existing initiatives to realize these objectives.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to speak today in support of the principle of Bill C-474. It would require Canadian mining, oil and gas corporations to submit annual transparency reports that disclose all payments provided by them or their subsidiaries to a foreign government for the purpose of furthering mining, oil or gas industry activities.

Under the bill, any corporation that fails to comply with this requirement is guilty of an offence and is liable to a fine of anywhere between $20,000 and $5 million.

This is essentially about ensuring that Canadian corporations are held accountable for any payments made for doing business abroad and that foreign governments can be held accountable, in the court of public opinion, for the money they receive.

In the late 1990s, a number of economists and observers focused on the resource curse phenomenon. They tried to understand the paradox of why two-thirds of the world's poorest people live in countries that are rich in natural resources.

For example, Jeffrey Sachs, Joseph Stiglitz, Terry Lynn Karl and Paul Collier, to name a few, noted that many countries with an abundance of natural resources, oil, gas and mines, were not realizing their full potential. There are a few exceptions, but many countries rich in energy resources are very corrupt and lack transparency.

These researchers noted that the revenues from extractive industries are often managed by a few elites, a small minority of individuals who control the country's resources.

The multinational companies that are competing for access to natural resources are often complicit in maintaining the rules established by these elites and help them to stay in power. They are reluctant to give information on their profits and the share they give to the elites. If people knew how much their government got from the extraction of their country's natural resources, it would be easier to monitor how that revenue is being spent.

The researchers I mentioned earlier proposed a series of complex and sometimes contradictory measures to ensure that local populations benefit as much as possible from natural resources. However, they all agreed that transparency is needed to put an end to what is called the resource curse.

The writings of these researchers resulted in an array of initiatives. Just think about the work that Oxfam and Human Rights Watch have done in this regard. There is also the initiative on the Caspian region's petrodollars and the Publish What You Pay campaign on the poor management of oil in Angola, led by George Soros' Revenue Watch Institute.

Then, in October 2002, at the world summit on sustainable development in Johannesburg, Tony Blair spoke about these campaigns by civil society. The next year, the extractive industries transparency initiative was born to ensure transparency of payments made and revenues generated by extractive industries and to make that information accessible to civil society and the general public, thereby promoting the proper use of these resources. For now, the standard is voluntary, but it is garnering more and more support.

Calls for greater transparency began just over a decade ago, and existing initiatives are part of a global trend fuelled by the global financial crisis and the need to manage the corporate world's conduct, particularly when it comes to fiscal agreements and the fight against corruption.

In 2012, the Securities and Exchange Commission in the United States introduced new rules under the Dodd-Frank Act requiring American companies to disclose payments made to a foreign government for mining, oil and gas development activities.

The European Parliament and many other democracies subsequently implemented similar rules. Unfortunately, Canada is lagging behind.

The question is, why target resource extraction companies? First, as I explained earlier, natural resource royalties are easier for corrupt governments to divert than fiscal revenues, which are overseen by a large number of public officials.

Second, according to Transparency International's 2011 Bribe Payers Index, oil and gas and mining companies rank fourth and fifth, respectively, as the most likely industries to pay bribes. Companies in the mining and oil and gas sectors are second and third most likely to engage in grand corruption targeting high-level public officials and politicians.

It remains to be seen whether the new disclosure requirements will affect Canadian companies' ability to compete with companies that are not required to disclose. Opponents to mandatory reporting, including the Conservative members of the House, have complained about the effect of releasing what they consider to be sensitive information to rivals, making competition one of the cornerstones of their arguments against implementing new standards.

However, since the United States and the European Union are pursuing mandatory disclosure, about 90% of the world's largest mining and oil companies will be covered, according to Transparency International. This includes companies such as U.S.-listed PetroChina, London-listed Russian company Rosneft, and Brazilian mining company Vale, also listed on a U.S. stock exchange.

Furthermore, most of the Canadian giants, like Barrick Gold, will have to comply with the American rules. It will be hard for them to argue that the Canadian rules cause them more problems than the American rules. Furthermore, the executive director of the Prospectors and Developers Association of Canada does not expect any new legislation to erode the competitive environment for Canadian firms abroad, given the large number of companies that will have to reveal payments:

The biggest problem is going to be setting up and adjusting to any new accounting system. The challenge is to develop a framework where resource companies don’t have to duplicate information for various jurisdictions.

However, beyond the issue of competition, I think Canadians expect Canadian companies to have impeccable business practices and to lead by example.

In June 2013, in London, the Prime Minister announced that the Government of Canada was establishing new mandatory reporting standards for Canadian extractive companies in order to increase transparency regarding the payments that these companies make to foreign governments.

I must say, I am somewhat skeptical, because this government is always reluctant to regulate private companies. The Conservatives prefer to champion self-regulation and deregulation. Let us not forget, for instance, how they axed environmental assessments to please the big oil companies.

The government has announced consultations with the industry and the provinces. I hope the government will open up those consultations to the public. How ironic it would be, to say the least, if those consultations on transparency were to take place behind closed doors.

In closing, I am pleased to support Bill C-474, which has three objectives: first, to ensure transparency around the payments made and revenues generated by the extractive industries; second, to make this information available to civil society and the general public; and third, to promote the proper use of this wealth. Some people will say that the bill does not go far enough, but at least it is a step in the right direction.

I urge all of my colleagues in the House to support this bill so that it can be studied in committee.

[Irwin Cotler, Liberal, Mount Royal, QC]

Mr. Speaker, I am pleased to rise today to address Bill C-474, the transparency of payments made by mining, oil, and gas corporations to foreign governments act.

I would like to start by commending the sponsor of this bill, the hon. member for Scarborough—Guildwood, for his persistent pursuit of this important legislation over the past several years.

Bill C-474, which my colleague has properly characterized as a sunshine bill, would compel Canadian extractive corporations operating abroad to submit an annual audited transparency report to the Minister of Foreign Affairs and the Minister of Natural Resources. The reporting requirement would mandate the disclosure of all payments provided by a corporation or its subsidiaries to a foreign government for the purpose of furthering its mining, oil, or gas industry activities and to publish this report on the company's website. A company that fails to comply with these disclosure requirements would be guilty of an offence and liable on summary conviction to a fine of not less than $20,000 and not more than $5,000,000.

Canada's international standing respecting our promotion and protection of human rights is something in which many of us take pride. Accordingly, our relationships with local populations and environments, and the foreign policy values we represent and exercise as a nation, have become bound up with our global mining footprint.

Indeed, 75% of the world's mining companies are based in Canada, and the approximately 1,300 Canadian extractive corporations invest hundreds of billions of dollars in more than 100 countries around the globe. Certainly, many of these companies respect human rights and the rule of law and thus engage in responsible resource development. However, the regrettable reality is that many do not, as my colleague from Scarborough—Guildwood has demonstrated.

Given our position as a world leader in the extractive industry, we have a moral responsibility to implement rules that will ensure the transparency and accountability of Canadian firms operating abroad.

I am therefore supporting Bill C-474 and urge all members in this place to do the same for two compelling reasons: first, because the bill would buttress the current criminal law regime by ensuring its enforceability; and second, because this bill would prevent Canadian corporate complicity in the human rights abuses of foreign governments by exposing their financial relationships with foreign governments to proper public scrutiny.

I turn first to the issue of criminal enforcement.

The current legal regime addressing the issue of illicit payments by Canadian companies to foreign governments is the Corruption of Foreign Public Officials Act. Bill C-474 would in fact enhance this act by providing prosecutors with sufficient evidence to meet the high burden of proof required in criminal prosecutions.

The difficulties of enforcing this act are apparent when one considers that the conviction obtained this past August in the Regina v. Karigar case was the first trial ever to have occurred under the Canadian Corruption of Foreign Public Officials Act and only the fourth conviction obtained in the act's 14-year history.

Indeed, according to Jamie Kneen, a spokesperson for the Ottawa-based non-profit organization Mining Watch Canada, the RCMP has stated that it simply cannot keep tabs on corporate bribery and corruption in the extractive industry.

Simply put, what we are seeing here is an accountability and transparency gap that must be addressed by mandatory disclosure. As long as Canadian extractive companies are able to hide the details of their financial relationships with foreign governments, prosecutions—and in particular, effective prosecutions—under the CFPOA will remain few and far between.

The importance of the bill goes far beyond the question of criminal enforcement, however important that alone remains. Indeed, mandatory disclosure is inextricably intertwined with the question of Canada's reputation abroad as a defender of human rights and as a responsible global citizen.

In this regard, I refer to the Prime Minister himself, who expressed this very sentiment when he announced in June that he would be “...establishing new mandatory reporting standards for Canadian companies operating in [the extractive] sector” and further acknowledged that such standards would result in the enhancement of Canada's reputation as “...a world leader in promoting transparency and accountability...” both at home and abroad.

I am encouraged that the Prime Minister expressed this sentiment, and I am sure that we all agree with the proposition that we must effectively guard Canada's hard-earned but at-risk reputation as a defender of human rights. This bill would afford us an opportunity to take real action to further the rule of law in the international arena while enhancing our global reputation in this regard, and thus I am hopeful that all members of the House will join in this cause.

By passing Bill C-474 and implementing mandatory disclosure requirements, our message to Canadians and to the world will be clear: What is good for human rights is also good for business, that Canada is a global leader not only with regard to innovation and development but also with regard to the integration of human rights with economic development; that we will not waiver in our demand that multinational corporations and the governments with which they do business cannot simply disregard international human rights laws and norms with impunity, or under the cover of Canadian law.

Certainly, as I mentioned, criminal prosecutions alone are not enough to ensure responsible corporate citizenship based on respect for the rule of law and human rights. But by providing for transparency and accountability across the board, we will encourage Canadian companies to operate ethically and with the utmost respect for human rights. Yet, one might hope that such laws would not be needed for the simple reason that companies should seek, as it were, to do the right thing regardless of the content of statutes.

I recall the testimony last November before the Subcommittee on International Human Rights of Cliff Davis, president and CEO of Nevsun Resources, a Canadian-based mining company that operates one of the highest grade open pit base metal deposits in the world at the Bisha mine in Eritrea.

When I questioned Mr. Davis as to his company's response to reports from the U.S. Department of State, the U.S. Commission on International Religious Freedom, and other major human rights organization that describe systematic Eritrean patterns of detention, torture, forced conscription, and the wholesale denial of freedom of religions and freedom of expression, he pleaded ignorance.

When I questioned him as to what, if any, steps his company had taken to bring these human rights violations to the attention of the Eritrean government, he replied that it was “not in [his] purview as president and CEO of [his] company”.

Mr. Davis' testimony illustrates the importance of the bill before us today. Indeed, this very “hear no evil, see no evil, speak no evil” mentality is precisely what Bill C-474 seeks to address. If Mr. Davis does not consider the systematic human rights abuses perpetrated by the government with which he does business to be within his purview, at the very least he should be required to disclose the nature of his dealings with human rights abusing regimes so that Canadians can judge for themselves.

The issue here is that transparency leads to accountability, which we must all seek.

In conclusion, Bill C-474 affirms that as Canadians we expect our corporations to appreciate and respond to the human rights realities in the countries where they operate and to engage with these issues in the context of their operations abroad. This is the meaning of good corporate citizenship, which must be firmly rooted in the principles of transparency, accountability, and the promotion and protection of human rights and the rule of law.

Accordingly, I support Bill C-474 because I strongly believe that it will discourage Canadian-based corporations from profiting from, or facilitating, human rights atrocities in foreign countries and will reinforce in the minds of Canadians, including in the minds of investors and shareholders, that human rights are good for business and good for the rule of law. Indeed, Canada's reputation as a human rights defender is at stake in this regard.

I trust that the House will give its full support to the bill.

[Ryan Leef, Conservative, Yukon, YT]

Mr. Speaker, I am happy to rise today to speak about Bill C-474. I did assure the member for Scarborough—Guildwood that I would say nice things, and I can assure him that I will certainly say nice things about our government's efforts to date and about our Canadian companies. If he stays tuned for this entire speech, he will hear a lot of nice things.

This government has moved forward on this issue. The net result has been that the proposals our government has advanced will overtake many of the proposals outlined in the bill, and therefore make the bill unnecessary.

On June 12, 2013, ahead of the G8, the Prime Minister announced that Canada is establishing a mandatory reporting regime that will guide global efforts toward greater transparency by the extractive industry in reporting payments made to governments. Canada will continue to develop and implement this over the next two years.

As my colleague across the way was asking when that will be, I hope that answered that for him.

The extractive sector of oil, mining, and natural gas remains an important sector for the Canadian economy. It directly represented over 13% of nominal GDP and translated to over 950,000 jobs in 2012. Other sectors are impacted by this success and indirectly represent almost another 5% of nominal GDP and 850,000 jobs. Together, the natural resources sectors directly and indirectly account for over 18% of GDP and 1.8 million jobs.

Because of these successes, Canada is a major player internationally. We can be proud of our leadership toward sound management in general, preventing natural resource exploitation that can lead to increased corruption, poor development results, and possibly the fuelling of armed conflict or illicit trafficking.

Responsible resource governance fosters positive results for governments, communities, and corporations, including prosperity, sustainable economic growth, poverty alleviation, and improved investment environments.

This government stands firm that transparency of payments from companies to governments is a critical part of improving governance. It improves public trust and confidence in governments, and in particular it leads to accountability of how revenues are spent. This responsible practice will also enhance the brand of Canada's extractive companies internationally.

It is for these reasons that the Canadian government is establishing mandatory reporting in the extractive sector regime.

Since the G8 announcement, the government has already moved forward in the following three ways. Number one, the Minister of Natural Resources has been leading work on options for the policy and mechanisms for the regime; two, consultations have started with provincial and territorial counterparts, aboriginal groups, industry, and civil society organizations, and these have been met with broad support; three, a review of the government's corporate social responsibility strategy is under way as a broader approach to promote responsible business conduct.

Canada is situated as a leader on mandatory reporting because of consistent strong support and promotion of responsible business conduct by Canadian extractive sector companies. Canadian companies operate overall in a socially responsible manner, creating jobs and prosperity, not only in Canada but around the world. Canadian companies are often instrumental in improving the lives of people and the communities in which they operate.

I would like to remind members of our commitments.

Our government has made a $25-million contribution for the creation of the Canadian centre for extractive industries and development. This institution would be jointly operated by the University of British Columbia and Simon Fraser University and would advance best practices in extractive sector technology and management to reduce poverty and protect the environment.

Canada supports the extractive industries transparency initiative, also known as the EITI. This initiative helps governments, business, and civil society agree on a reporting system that ensures transparency on what revenues governments receive from the extractive sector.

Today Canada is the second-largest funder of the EITI Multi-Donor Trust Fund, as well as the largest funder of the World Bank's Extractive Industries Technical Advisory Facility.

Canada hosts the Secretariat of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, which convenes developing countries, trading partners, and donors to discuss and advance issues of mutual concern, such as international standards and best practices in extractive sector management and governance.

As well, let us not forget the Prime Minister's announcement in 2012 of $15.3 million in new funding for the African Minerals Development Centre. The AMDC will deliver guidance and policy advice to African countries on how to manage their extractive sectors responsibly and sustainably.

These government initiatives, in consultation with industry and civil society, continue to demonstrate solutions that work for Canadians and indeed the global community. Bill C-474 is not required.

I conclude our opposition for this private member's bill with a reminder to all Canadians of our leadership in natural resource governance and our corporate social responsibility strategy. Canada's natural resource governance programs promote responsible resource governance that includes transparency and accountability for governments, companies, and communities. Canada's CSR strategy promotes high standards for company conduct and a stable investment environment. It also provides assistance to foreign countries to achieve better resource governance for win-win outcomes for all of our stakeholders.

The government believes in approaches that work for Canada, for Canadians, and for the world, approaches that advance transparency and accountability while also ensuring economic growth and long-term prosperity for all stakeholders involved.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, I think it is important for me to take a stand in this House on the principles set out in Bill C-474, which seeks to promote financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments.

I like to think that everything happens for a reason. This is a subject that is relevant to my own riding of Manicouagan, although the legislative measure before us today deals with the realities of developing countries overseas. The same type of reasoning could be applied to remote regions, particularly to the realities of Indian reserves and land claims negotiations, which I will be talking about in this speech.

The spirit of the proposed legislative measure shows that the expectations of Canadians and the government are changing when it comes to public disclosure and the financial considerations given to governments by proponents of the extractive sector.

This is still relevant today because the federal government directed questions at a mining development promoter in my riding. Information was recently disclosed to the public about a substantial payment that the promoter made to a body of government, a band council. It seems as though $100,000 was handed over—and that number was recorded—in order to look at land claims. This all happened anonymously and behind closed doors.

It is clear why the Bribe Payers Index ranks oil, gas and industrial companies as the 4th and 5th likeliest to pay bribes. Bribes are paid behind closed doors, and that is what is happening in my riding because it is remote and people are not well educated. Influence peddling, insider trading and embezzlement are common in many remote communities and regions.

In light of the current political narrative, which is quick to recognize government-to-government relations, the same type of reasoning can apply to aboriginal matters because the bill before us concerns Canadian promoters who give bribes to foreign governments. However, when we apply this reasoning to nation-to-nation relations and government-to-government relations involving aboriginal peoples, it is obvious that the same type of reasoning can apply locally, here in Canada. Therefore, it is a very worrisome problem at the local and regional levels.

The literature points to an emerging concept, namely, the phenomenon of the curse of resources associated with the lack of transparency in payments made to governments by extractive sector companies. It has been shown that local populations have difficulty holding their government to account when information about the sources and the revenue earned from resources are hidden and, when, from the start, there is no financial incentive for the government to be accountable.

We have talked about this in the House. Transparency within band councils is a timely issue, but too often, the entire population in Manicouagan, and not just the Innu and Naskapi, is left out of these decisions. The deals, the negotiations and the payment of financial compensation are inevitably done quietly. That is why I wanted to speak to this issue today and share everything.

Resource extraction initiatives such as the ones under way right now in Manicouagan raise some serious concerns. That is why I plan to focus on this area in the coming months and the next year. This very clear bill is a step in the right direction in order to expose any wrongdoing, as well as the ins and outs of any bribery of the authorities.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

It being 2:30 p.m. the House stands adjourned until next Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)