Published | Category : Income tax - businesses

Introduction of an Environmental Studies Allowance in the Mining Tax Act

To take the reality of the mining industry into account and protect the environment, social acceptability and transparency, the Mining Tax Act will be amended in order to introduce an environmental studies allowance.

Environmental studies allowance

The environmental studies allowance will be similar to the allowance for community consultations.

Thus, an operator may deduct, in calculating its annual profit for a fiscal year, an amount on account of the environmental studies allowance that may not exceed the balance of its cumulative environmental studies expenses account at the end of the fiscal year.

The balance of the cumulative environmental studies expenses account of an operator at the end of a fiscal year corresponds to the amount by which the aggregate of the amounts each of which represents 50% of environmental studies expenses incurred by the operator in the fiscal year or a preceding fiscal year, but after March 27, 2018, exceeds the aggregate of the amounts on account of the environmental studies allowance deducted in the calculation of the operator's annual profit for a preceding fiscal year.
 

Environmental studies expenses, for the purposes of calculating the allowance, includes expenses of the same nature as the environmental studies expenses included in the cumulative exploration expenses of an operator.

Refundable duties credit for losses

Changes have been made to the refundable duties credit for losses of an operator based on the introduction of the environmental studies allowance.

Consequently, the refundable duties credit for losses that an operator may claim for a fiscal year ending after March 27, 2018, may not exceed 16% of the lesser of the following amounts:

  • its adjusted annual loss for the fiscal year; and
  • the amount equal to the total of:
    • the amount corresponding to the pre-production development expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an pre-production development allowance,
    • the amount corresponding to community consultation expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an allowance for community consultations,
    • the amount corresponding to the environmental studies expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an environmental studies allowance, and
    • if the operator is an eligible operator for the fiscal year, 50% of the amount corresponding to the exploration expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an exploration allowance.

Application date

These changes will apply to a fiscal year of an operator that ends after March 27, 2018, in respect of environmental studies expenses incurred after that day.

For more information, see pages A.124 to A.127 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Fair. For all.

One vision. Concrete actions.

Read all about how we work to support and inform you. Our vision and values guide us as we carry out our role.

Veuillez patienter