Published | Category : Income tax - businesses

Introduction of an Allowance for Community Consultations in the Mining Tax Act

Allowance for community consultation

The Mining Tax Act will be amended to introduce an allowance for community consultations. This allowance will be taken into account in calculating the operator's annual profit or annual loss.

The amount that an operator may deduct as an allowance for community consultations may not exceed the balance of the operator's cumulative consultation expense account at the end of a given fiscal year, on the same basis as the pre-production development allowance.

For this purpose, a cumulative expense account for community consultations will be created. The cumulative consultation expenses will correspond to 50% of the aggregate of the total expenses for community consultations incurred by the operator. Any government assistance relating to eligible expenses that is received, receivable or repaid will be treated according to the same principles that currently apply to the pre-production development allowance.

The community consultation expenses covered by this allowance will be of the same type as those covered by the concept of community consultation expenses found in the definition of “Canadian exploration expense” in the Income Tax Act. The following expenses, however, cannot be considered for the allowance: expenses that may be qualified as exploration expenses and expenses that may reasonably be considered to be attributable to a mine which has come into production in reasonable commercial quantities.

The allowance for community consultations will apply to an operator's fiscal year ending after March 28, 2017, in respect of consultation expenses incurred after that day.

Refundable duties credit for losses

Changes will be made to the refundable duties credit for losses of an operator to take into account the introduction of the allowance for community consultations.

For more information, see pages A.61 to A.64 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

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