Transparency in Payments to Foreign Governments
A Submission to Natural Resources Canada Consultation
XBRL Canada – April 7, 2014
Executive Summary
This submission expresses the support of XBRL Canada for the proposed legislation
with regard to mandatory standards for reporting on payments to foreign governments
by companies in the extractive industries. In addition, the submission sets out some
considerations in framing this legislation. It also makes reference to the case for the
Government of Canada to take a leadership role in the development of programs that
would require the use of XBRL for the filing of information with government departments
and agencies. We note that there is a proposal similar to this one in the US that
includes the use of XBRL as the underlying technology as well as one in the EU. We
believe that XBRL is a logical choice for this program in Canada, as it is widely used
around the world. XBRL is already used for regulatory filing in the EU, the US and many
other countries and offers the best possibility of international compatibility.
Who We Are
XBRL Canada is a not-for-profit consortium of numerous companies and other
organizations formed to support and encourage the use of XBRL in Canada. XBRL
(Extensible Business Reporting Language) is an open standard based on XML that is
specifically designed for use in reporting business and financial information. XBRL
Canada is supported and administered by the Chartered Professional Accountants of
Canada (CPA Canada). CPA Canada fully supports the use of XBRL for government
reporting and has made submissions to the federal government on this matter, most
recently to the Minister of Finance in the pre-budget consultations leading up to the
Federal Budget of March 2014.
The Centricity of Data
Governments today obtain growing volumes of data from businesses and yet
processing the data becomes more and more time consuming, requiring human
resources that they do not have and that their budgets often will not allow. They need a
technology solution to this dilemma, and that is why so many governments have turned
to XBRL. Since the data is tagged with metadata that explains the nature of the data
elements, it can be processed with little or no human intervention. Accordingly, far
greater quantities of data can be analyzed, processed and acted upon. Moreover the
risk of human error is minimized.
From the viewpoint of the filers of the information, companies at present must file their
data with governments and regulators using data formats that are developed by and
required by those other bodies. This means the companies filing the information must
support and maintain numerous systems in order to present the data in the many
different formats required. This process is very expensive, time consuming and
inefficient. XBRL provides a standard format that drastically reduces the reporting
burden by minimizing the need to develop and maintain numerous different systems.
XBRL Around the World
Numerous governments around the world have made significant use of XBRL as an
enabler to streamline their data flows and make them more cost-effective. In some
cases, this has been accomplished by adopting a strategy known as Standard Business
Reporting (SBR), which essentially involves developing standard tags for the data
collected by the various departments and using those tags for all departments.
Therefore filers do not have to re-tag items several times over. Once will do. This simple
approach saves business a great deal of money and time.
More completely, SBR is a multi-agency program that can reduce the reporting burden
by 25% or more by:
 removing unnecessary/duplicated information from government forms
 adopting a common reporting language (XBRL), based on international
standards and best practice providing business with a single secure online signon to the agencies involved
 utilising business software to automatically pre-fill government forms
 providing an electronic interface to enable business to report to government
agencies directly from their enterprise software, which will provide validation and
confirm receipt of reports
Some significant XBRL based programs around the world include:
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Govt of Netherlands SBR
Danish Commerce and Companies Agency (DCCA)
Govt of New Zealand SBR
Govt of Australia SBR. SBR is expected to save Australian business an
estimated $800 million per year
Singapore SBR
Government of Ireland eGov policy
Government of Poland
United Kingdom’s HMRC/Companies House joint filing
Ministry of Corporate Affairs India (emerging)
European Commission
Response to some of the questions posed in the Consultation Paper:
Equivalency
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What is the best way to ensure equivalency with standards in other jurisdictions?
o From the data reporting perspective we believe that the use of XBRL is
the best way to achieve equivalency with standards in other jurisdictions.
XBRL is an international standard and recognized as such around the
world. In this project, since the EU and US are working on similar
standards, a common taxonomy can be used for all three jurisdictions,
which would mean that the opportunity for equivalency is considerable.
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What should be the elements/format of a common reporting template?
o Regardless of the elements/format selected XBRL can be used to ‘tag’ the
data and enable standardized information exchange. This leads to efficient
and effective business processes. The XBRL component can be included
in the filing documents in such a way that it is transparent to the filer.
When the data are standardized, it is possible to automate the tagging.
We believe this approach is the appropriate one for this application. The
users can file in XBRL but do not even have to be aware that they are
using XBRL. This is the best of all possible worlds. The benefits of XBRL
can be realized without placing any burden on the filers.
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Accurate reporting of payments will be important to the integrity of this initiative.
What measures need to be in place to ensure that there is no double-counting?
o There is always a risk of error in a reporting system, whether it is human
error or machine error. But this risk can be minimized. With XBRL, the
processing and analysis is largely automated and thus the risks are truly
minimized. The greatest risk of human error lies with the initial gathering of
the data to begin with. No technology can ensure that there is no human
error in the initial gathering and input stage. However, basic input controls
and integrity checks can reasonably minimize this risk. XBRL involves the
classification and standardization of data, and incorporates several
integrity checks to help verify the data, which again serves to minimize the
risk of error.
Reporting Process
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What is a practical template and when should annual reports be due?
o A practical template is one that is standardized and includes the XBRL on
an automated basis. This would mean that filers could prepare their
reports readily, and reports could be provided very quickly upon the
conclusion of their reporting cycles. Very little time would be required.
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How could reports be made accessible to the public? How could information be
made easily available to Aboriginal groups and communities?
o The reports can be made available to the public in XBRL format through
the government’s Open Data website at data.gc.ca. At present, this
website does not include XBRL, but there are no technical barriers to
doing so. The Open Data website does include XML, and since XBRL is a
variation of XML, it would be possible to include XBRL as well. The public
can read XBRL data using several standard XML readers. Also, there are
numerous XBRL readers that they could be directed to for use. Also, the
government could include such a reader on its own website, such as is
done by the US Securities And Exchange Commission.
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What would be the easiest way for companies to notify both the Government of
Canada and the public that they have met reporting obligations?
o Notification to the government can be readily accomplished by including in
the filing mechanism a notification process, where a message is sent to
the desired parties when the filing is received. Since XBRL provides the
capability to do integrity checks upon receipt, those checks could include a
notification when the checks are completed and the filing is approved. For
the public, RSS feeds are sometimes used effectively for notifying the
public of when filings have been made. The feeds can also include links to
the filing, when the filings are stored on an internet site, such as the Open
Data site.
Implementation of XBRL
There would be a need for cooperative action between the government and the relevant
bodies in the US and the EU. Also, there should be collaboration with the industry to
develop the necessary strategies and also develop the taxonomies that would be
needed. The same XBRL taxonomy could be used for the three jurisdictions, but there
may be some variations because of industry circumstances or accounting policies used.
For example, the EU makes use of IFRS, but there are variations from country to
country and also the US uses US GAAP which differs from IFRS. It’s not likely in this
application that these differences would lead to major variations in the taxonomy, but
this would need to be carefully reviewed. Then there would be a need to develop a
system to receive the data but this would not be difficult. XBRL is an application of XML,
and most departments have used XML in one way or another. Also XML and XBRL are
platform independent.
XBRL Canada Can Help
As mentioned previously, XBRL Canada is a not-for-profit consortium sponsored by the
Chartered Professional Accountants of Canada (CPA Canada). Its interest is in
increasing awareness of the benefits of standardized information exchange using
XBRL. We would be happy to provide additional information at any time, either in
person or through correspondence. In addition, the undersigned, the National Chair of
XBRL Canada and its Director, Gerald Trites, FCA, will be in Ottawa on April 14th and
would be pleased to meet with you if that day is convenient, to discuss this submission.
Please contact us at any time by emailing gtrites@xbrl.ca or calling 1-416-602-3931.
Respectfully yours,
Geoff Zakaib, Chair - XBRL Canada