Refundable Duties Credit for Losses

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Operators that sustain an annual loss in a fiscal year may claim an amount as a refundable duties credit for losses within the six months after the end of the year.

Maximum credit for an eligible operator

For an eligible operator, the maximum amount of the refundable duties credit for losses is equal to 16% of the lesser of the following amounts:

  • the operator's adjusted annual loss for the fiscal year;
  • the total of the following amounts:
    • 50% of the exploration expenses incurred for the fiscal year (the amount taken into account in doing the calculation cannot exceed the amount deducted as an exploration allowance in calculating the annual profit for the year),
    • the pre-production development expenses incurred in the fiscal year (the amount taken into account in doing the calculation cannot exceed the amount deducted as a pre-production development allowance in calculating the annual profit for the year),
    • the community consultation expenses incurred in the fiscal year that give entitlement to the allowance for community consultations (the amount taken into account in calculating the credit cannot exceed the amount of the allowance deducted in calculating the annual profit), and
    • the environmental studies expenses incurred in the fiscal year that give entitlement to the environmental studies allowance (the amount taken into account in calculating the credit cannot exceed the amount of the allowance deducted in calculating the annual profit), and
    • the sustainable development certification expenses incurred in the fiscal year that give entitlement to the sustainable development certification allowance (the amount taken into account in calculating the credit cannot exceed the amount of the allowance deducted in calculating the annual profit).

Maximum credit for an operator other than an eligible operator

For an operator other than an eligible operator, the maximum amount of the refundable duties credit for losses is equal to 16% of the lesser of the following amounts:

  • the operator's adjusted annual loss for the fiscal year;
  • the total of the following amounts:
    • the pre-production development expenses incurred in the fiscal year (the amount taken into account in doing the calculation cannot exceed the amount deducted as a pre-production development allowance in calculating the annual profit for the year),
    • the community consultation expenses incurred in the fiscal year that give entitlement to the allowance for community consultations (the amount taken into account in calculating the credit cannot exceed the amount of the allowance deducted in calculating the annual profit), and
    • the environmental studies expenses incurred in the fiscal year that give entitlement to the environmental studies allowance (the amount taken into account in calculating the credit cannot exceed the amount of the allowance deducted in calculating the annual profit), and
    • the sustainable development certification expenses incurred in the fiscal year that give entitlement to the sustainable development certification allowance (the amount taken into account in calculating the credit cannot exceed the amount of the allowance deducted in calculating the annual profit).

Adjusted annual loss

The adjusted annual loss of an operator for a fiscal year is equal to the amount by which the annual loss exceeds the lesser of the following amounts:

  • the operator's processing allowance calculated solely on the basis of the cost of property used in processing ore from all of the operator's mines in the fiscal year;
  • the operator's annual loss, multiplied by 75%.

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