28(1)For the purposes of this section and section 29,
“effective date” means the first day of the calendar month following the calendar month of the commencement of a lease;(date d’entrée en viguer)
“gross revenue” , in respect of any year, means
(revenue brut)
(a)
all amounts received or receivable in respect of that year from the sale or exchange of any bituminous shale production obtained from a lease area including all products or by-products at whatever stage of completion or character,
(b)
the gross proceeds received or receivable in respect of that year from the sale or exchange of any mine or plant asset, supply inventory or any other goods or service, and
(c)
all miscellaneous income derived from the operation of the mine or plant to the extent that it may reasonably be regarded as arising from the recovery or use of any goods, service or charge entering into the determination of the specified costs for that year,
but does not include any interest income from the use of surplus funds derived from the operation of the mine or the plant;
“net profits” , in respect of any year, means profits computed before the anniversary of the effective date and calculated as the excess of the gross revenue over the specified costs;(bénéfices nets)
“prime interest rate” means the lowest rate of interest generally charged, from time to time, on demand loans to major business customers of the Royal Bank of Canada at its principal office in the Province;(taux d’intérêt privilégié)
“specified costs” , in respect of any year, means the aggregate of the following costs, expenses and charges incurred by a lessee in that year but only to the extent that they relate to the operation of the mine or plant or are reasonably incidental to the earning of income therefrom:
(coûts spécifiés)
(i)
including items treated as Class 10 or Class 28 capital expenditures under the
Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and regulations made thereunder, to the extent that such costs relate to assets situated in New Brunswick, but not including any interest costs notwithstanding that such interest may have been capitalized for income tax or accounting purposes, and
(ii)
excluding costs deductible under paragraph (
p);
(b)
the actual cost of transportation of any output sold to arm’s length customers, if the cost is paid or borne by the lessee;
(c)
a marketing expense allowance equal to three-quarters of one per cent of the gross revenue derived from the sale of the products of the mine or plant, excluding miscellaneous income or asset sales;
(d)
the actual and proper current operating costs of the mine or plant, both underground and above ground;
(e)
the salaries and wages of the workers and employees employed at or about the mine or plant together with the salaries and office expenses for necessary office work done at the mine or plant and in immediate connection with the operation thereof;
(f)
the actual and proper operating costs of bituminous shale production operations;
(g)
the actual cost of insurance upon the equipment and buildings at the mine or plant, the supplies and the stock in storage;
(h)
the real property tax and real property assessment paid by the operator of the mine or plant;
(i)
the actual cost of workers’ compensation and other contributions relating to the safety, welfare and health of the employees of the operator working at or near the mine or plant and its processing facilities;
(j)
donations actually made for charitable, educational or patriotic purposes that have been approved by the mine assessor under the
Metallic Minerals Tax Act;
(k)
royalties and rentals paid to the Province under this Regulation;
(l)
payments to the Province for a licence to search and all exploration expenses incurred within a lease area;
(i)
which are imposed on the operator and borne by him with the exception of federal, provincial and foreign corporation income tax and any other taxes and levies which are intended to be passed on to the consumer in purchase of leased products, and
(ii)
which are imposed on capital;
(n)
a working capital allowance determined by multiplying the prime interest rate plus ten per cent of the prime interest rate by forty per cent of the total of all costs and outlays for a year excepting the costs included in paragraph (
o) and those costs included in paragraph (
r) for exploration outside a lease area;
(o)
all eligible exploration expenditures, as defined under the
Metallic Minerals Tax Act, subsequent to the signing of the lease;
(p)
development expenditures on the lease area but not including any capitalized interest and any costs included in paragraph (
a);
(q)
education, training and research, and development expenditures for programs approved in advance by the Minister;
(r)
a head office expense allowance equal to two per cent of the costs and outlays prescribed by this section for a year, except those prescribed in paragraphs (
a), (
n) and (
o); and
(s)
such other costs, expenses or charges which by agreement between the lessee and the Minister are considered appropriate;
but the aggregate of the following costs, expenses and charges incurred by a lessee for the year are not included:
(t)
the depletion or exhaustion of a bituminous shale production operation;
(u)
depreciation or amortization;
(v)
interest and any expenses on funded debt or related to the borrowing of money;
(w)
income taxes and capital taxes under any federal, provincial or foreign statute;
(x)
royalties paid to any parties other than as specified in paragraph (
k);
(y)
administrative and corporate expenditures incurred outside of the Province including, for greater certainty, all corporate overhead expenses relating to offices, activities and personnel located outside of the Province and all management and administration charges in respect of such offices, activities and personnel;
(z)
transportation costs for shipments to customers not at arm’s length;
(aa)
any marketing expenses or outlays, direct or indirect, of any nature whatsoever;
(bb)
the cost of employee benefits, including pensions, but only to the extent that such costs would represent a deduction under the terms of the
Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952; and
(cc)
costs or charges disallowed under any term of a lease.
“year” means a year commencing on the effective date or the anniversary of the effective date.