Operators must deduct the post-production development allowance in calculating the annual earnings from each of their mines.

The maximum amount of the post-production development allowance for a fiscal year in respect of a mine is equal to the lesser of the following amounts:

• 30% of the balance of post-production development expenses in respect of the mine at the end of the year;
• the annual earnings from the mine for the year, before deduction of the post-production development allowance, the processing allowance, the additional depreciation allowance, the additional allowance for a northern mine and the additional allowance for a mine situated in Northern Québec.

Balance of cumulative post-production development expenses

In general, the balance of cumulative post-production development expenses in respect of a mine at the end of a fiscal year includes the total expenses incurred after March 30, 2010—other than those that the operator renounced under the Québec or Canadian flow-through share regime—in either:

• sinking or excavating a mine shaft, main haulage way or similar underground work designed for continuing use, built or excavated after the mine came into production in reasonable commercial quantities; or
• extending any such shaft, haulage way or work;

minus

• the amounts that the operator deducted in previous fiscal years as a post-production development allowance.