Canada is adopting a G8 initiative that would require companies to disclose any payments they make to foreign governments, Prime Minister Stephen Harper announced Wednesday in London at a meeting with oil, gas and mining executives.

Harper said Canada will adopt new mandatory reporting standards for payments made to foreign and domestic governments by Canadian companies in the extractive sector.

"This has long been a priority for Canada. We put great emphasis in Canada on corporate social responsibility and through our various foreign aid programs we have assisted transparency in the extractive sector around the world," Harper said at the meeting.

Leaders of the world's eight richest nations pledged after their 2011 meeting in Deauville, France, to consider new rules that would allow for greater scrutiny of companies' payments to foreign governments. Critics say such measures are badly needed to expose corruption in countries with an abundance of natural resource riches.

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The United States and Hong Kong already have similar measures in place.

Canada is a major player in the extractive industry, with hundreds of companies operating thousands of projects around the world.

Half of the mining that takes place around the world is done by Canadian companies. Sixty per cent of all the world's mining and exploration companies, and 35 per cent of all oil and gas companies, are listed on Canadian exchanges.

Harper said Canada's new standards will help transform the way industry reports payments worldwide. "This is a direction we're determined to pursue because this information is essential for citizens to hold their government accountable," he said.

Consultations first

While there are already some standards and mechanisms in place for companies, these new rules would be enforceable by law.

The federal government will now consult with the provinces and territories, First Nations and aboriginal groups, industry and civil-society organizations as it sets up its reporting regime. A senior Canadian government official, speaking on the condition his name not be used, said he expects it will take about two years to hold consultations and develop a framework for the new reporting regime.

Details such as how the reporting regime would be policed, and by whom, along with potential penalties for any companies that do not report their payments to other countries, need to be ironed out. It's possible provincial securities regulators could play a role, the official said.

The government is also trying to avoid burdening companies with too much extra paperwork, he added.

Harper also announced that Canada is forming partnerships with Tanzania and Peru to improve transparency in the oil, gas and mining industries in those countries. The agreements are part of a series of partnerships that G8 countries are forming with developing countries in Africa, Asia and Latin America.

Canada will work with civil society, governments and companies to improve regulatory oversight, tax and audit co-ordination, and the management of royalties collected by local and regional governments from oil, gas and mining companies, Harper  said.

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Prime Minister Stephen Harper, left, was presented with a gift from the dean of Westminster Abbey, Dr. John Hall, on Wednesday in London, England. (Adrian Wyld/Canadian Press)

Dr. Tony Hodge, president of the International Council on Mining and Metals, said the proposed regulations will help set a higher bar for the industry and set consistent standards.

"For any of the the leading companies in the industry, that's tremendously helpful, it will make a difference," he told reporters travelling with the prime minister. 

He said Canada doesn't intend to impose the regulations on other countries and is using a good approach by working collaboratively with governments, civil society and industry.

Hodge said the industry has been working hard on improving transparency and that any countries resisting the global moves towards more transparency "are truly being marginalized."

Oxfam Canada was also pleased by the announcement and urged the government to work quickly. In a statement, Oxfam Canada policy director Mark Fried said provincial securities regulators would be the best way to collect the information and that the information will be crucial for citizens to hold their governments accountable.

Oxfam wants the taxes, royalties and other payments that are collected by countries from the extractive sectors to be invested in economic and social development.

Transparency is at the top of the agenda at the coming G8 summit in Northern Ireland. British Prime Minister David Cameron wants to leave the lakeside Lough Erne resort with an agreement on tougher transparency measures in hand.

But Cameron is reportedly encountering some resistance to a proposal that would force companies to reveal who actually owns them. Some might consider it somewhat embarrassing to the British prime minister, who is chairing the G8 summit, if he fails to seal a deal on ownership-disclosure rules.

Little to say on the Senate scandal

Beyond talks about the economy and financial issues, the G8 is also expected to focus on international security, particularly the Syrian conflict, Iran and North Korea's nuclear programs and anti-terrorism measures in Africa's Sahel region.

The G8 summit comes as Canada and the European Union are trying to conclude lengthy negotiations on a free-trade agreement. The Prime Minister's Office has sought to play down any expectations a deal will be announced while Harper is in Europe this week, saying an agreement at this juncture is unlikely.

When Harper spoke briefly to reporters Wednesday he said a lot of progress has been made on the agreement and that negotiations are ongoing.

"We are not going to set a timeline or a fixed date on which we're going to have a negotiation or on which we're going to have an agreement because it is essential that we be driven by the contents of the discussions," said Harper. "We will not arrive at an accord until such time as we think we have the best accord we can get for the Canadian people."

The prime minister was also asked about the European Union's proposed fuel-quality directive and he said his government will continue to raise the issue with European leaders. The directive could potentially label Alberta's oilsands crude as more harmful to the environment than other fuels. Harper said his government doesn't object to the concept of evaluating the various qualities of fuel.

"But this simply has to be done on an objective, scientific and transparent basis, and that's our only point. I think if that is done we have no particular reason for concern," he said.

The Senate expenses scandal also came up and Harper was asked why he doesn't produce a copy of the $90,000 cheque that his former chief of staff, Nigel Wright, wrote to Senator Mike Duffy to cover housing expenses that were inappropriately claimed.

"Mr. Wright is speaking to the ethics commissioner and he will be accountable for his actions to the commissioner and beyond that I have nothing more to say on the matter," said Harper.

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Prime Minister Stephen Harper shakes hands with Queen Elizabeth II during a private meting at Buckingham Palace on June 12, 2013. (John Stillwell/Associated Press)

With files from The Canadian Press