Acts and Regulations

M-11.01 - Metallic Minerals Tax Act

Section 2.1
Disposition versions

Full text
Calculation of tax
2.1(1)Each year, effective April 1, 1977, the operator of a mine shall pay a tax equal in amount to
(a) two per cent of net revenue for each year, and
(b) sixteen per cent of net profits in excess of one hundred thousand dollars, less any tax credit referred to in subsection (2).
2.1(1.001)For the purposes of calculating the tax payable under paragraph (1)(a) for a new mine, the tax commences on the expiration of twenty-four consecutive months after the notification required under subsection 6(1).
2.1(1.002)Notwithstanding subsection (1.001), where a new mine is not in operation for twenty-four consecutive months after the notification required under subsection 6(1), the Minister may, on application from the operator, direct that the tax commences on the expiration of the twenty-fourth month that the new mine is in operation.
2.1(1.01)There shall be deducted from the total tax payable under subsection (1) any tax credit granted under subsection (4.1).
2.1(1.1)Where an operator has a taxation year part of which is prior to April 1, 1982 and part of which is after April 1, 1982, tax payable for the taxation year shall be calculated as follows:
(a) by dividing the taxation year into two notional taxation years, the first ending on March 31, 1982, and the second beginning on April 1, 1982;
(b) by apportioning the gross income between the two notional taxation years proportionately according to the number of days in each;
(c) by calculating
(i) tax for the first notional taxation year in accordance with this Act as it was prior to April 1, 1982, and
(ii) tax for the second notional taxation year in accordance with this Act as it becomes on April 1, 1982; and
(d) by adding together the amounts determined under paragraph (c), and the total is the tax payable in respect of that taxation year.
2.1(2)The operator of a mine shall, after the date of commencement of production, be granted one tax credit against the tax payable under paragraph (1)(b) equal to twenty-five per cent of the eligible process research expenditures.
2.1(3)Where the amount of credit calculated under subsection (2) exceeds the tax payable under paragraph (1)(b) in a given year, the balance of the credit and any further credit granted under subsection (2) shall be applied against the tax payable under paragraph (1)(b) in the succeeding year.
2.1(4)Where the amount of credit referred to in subsection (3) exceeds the tax payable under paragraph (1)(b) in a succeeding year, that balance and any further credits granted under subsection (2) shall be applied in the succeeding year.
2.1(4.1)Subject to subsections (4.2) and (4.3), in addition to any deduction allowed under paragraph (6)(k.1), the operator of a mine shall, after the date of commencement of production, be granted a tax credit against the total tax payable under subsection (1) equal to eighteen per cent of expenditures incurred by the operator on a 3D seismic survey, on deep drilling or on any other advanced exploration technology within the Province.
2.1(4.2)A tax credit shall not be granted under subsection (4.1) unless the 3D seismic survey, deep drilling or other advanced exploration technology referred to in that subsection was pre-approved by the mine assessor.
2.1(4.3)A tax credit granted under subsection (4.1) shall not exceed one million dollars in any given year and any portion of that credit that has not been applied against the total tax payable under subsection (1) in any given year may be claimed in any succeeding year.
2.1(5)Net revenue is the amount of the gross income from mining operations for the taxation year less the following deductions:
(a) the actual cost of transportation of any output sold, if paid or borne by the operator of a mine;
(b) the actual and proper operating costs for smelting and further processing of mineral ore within the Province by the operator, a subsidiary of the operator or by persons who, in the opinion of the Minister, are associated with the operator;
(c) the actual and proper costs of milling; and
(d) an amount, by way of return on capital employed by an operator in processing mineral ore or mineral products derived therefrom, equal to eight per cent of the original cost of the depreciable assets used by him in the milling or concentrating of mineral ore or mineral products derived therefrom plus fifteen per cent of the original cost of the depreciable assets used by him in the smelting or refining of mineral ore or mineral products derived therefrom, but the total amount to be deducted under this paragraph shall not be in excess of twenty-five per cent of net revenue calculated before taking the deduction allowed under this paragraph.
2.1(6)Net profit is the amount of gross income from mining operations for the taxation year less the following deductions:
(a) the actual cost of transportation of any output sold, if paid or borne by the operator of a mine;
(b) the actual and proper working expenses of a mine both underground and above ground;
(c) the salaries and wages of the persons employed in the mining operations together with the salaries and office expenses for necessary office work done in connection with the mining operations;
(d) the actual and proper costs of milling;
(d.1) the actual and proper operating costs for smelting and further processing of mineral ore within the Province by the operator, a subsidiary of the operator or by persons who, in the opinion of the Minister, are associated with the operator;
(e) the actual cost of insurance upon the equipment and buildings used by the operator in connection with the mining operations and the stock in storage;
(f) real property tax paid by the operator of a mine;
(g) an allowance of
(i) not less than five per cent of the original cost of the undepreciated depreciable assets used
(A) in a new mine or processing plant, or
(B) in an expansion of an existing mine or processing plant, if the capacity of the mine or processing plant, measured in tonnes of feed, is, in the year immediately following the expansion, increased at least twenty-five per cent over the year immediately preceding the expansion, and
(ii) not more than thirty-three and one-third per cent of the original cost of other undepreciated depreciable assets;
(h) the actual cost of workmen’s compensation and other contributions to the safety, welfare and health of the employees of the operator;
(i) donations actually made for charitable, educational or patriotic purposes that have been approved by the mine assessor but the total amount to be deducted under this paragraph shall not be in excess of ten per cent of net profit calculated before taking the deduction allowed in this paragraph;
(j) the amount of tax payable under paragraph (1)(a), before any tax credit granted under subsection (4.1) is deducted from the total tax payable under subsection (1);
(k) the royalties or rentals paid to other parties for ore extracted within the Province;
(k.1) where the operator has begun mining operations notice of which has been given to the mine assessor under paragraph 6(1)(a), the amount of one dollar and fifty cents for each dollar of eligible exploration expenditures, other than expenditures claimed as preproduction development costs, incurred by the operator
(i) on or after April 1, 1982, or
(ii) before April 1, 1982, if he was entitled, prior to April 1, 1982, to a credit under subsection (2) with respect to those eligible exploration expenditures and a credit was not applied as authorized under subsections (2), (3) and (4) against tax payable under paragraph (1)(b),
and any expenditures that are eligible for deduction under subparagraph (i) or (ii) may, if not claimed in one year, be claimed in any succeeding year;
(k.2) money submitted by the holder of a mining lease or the operator of a mine, or anyone acting on behalf of such person, and credited to the Mine Reclamation Fund established under section 111.2 of the Mining Act, and any money that is eligible for deduction under this paragraph may, if not claimed in one year, be claimed in any succeeding year;
(l) an allowance equal to eight per cent of the undepreciated balance of depreciable assets in lieu of interest payments; and
(m) an amount, by way of return on capital employed by an operator in processing mineral ore or mineral products derived from the mineral ore, equal to eight per cent of the original cost of the depreciable assets that are located within the Province and that are used by the operator in the milling or concentrating of mineral ore or mineral products derived from the mineral ore plus fifteen per cent of the original cost of the depreciable assets that are located within the Province and that are used by the operator in the smelting or refining of mineral ore or mineral products derived from the mineral ore; but the total amount to be deducted under this paragraph in respect of those depreciable assets for which a deduction has been claimed under this paragraph, or any predecessor thereof, for two or more previous taxation years, shall not be in excess of sixty-five per cent of net profits calculated before the deduction allowed under this paragraph.
2.1(6.1)Where the taxation year is less than 365 days, the deductions under paragraphs 2.1(5)(d) and 2.1(6)(g), (l) and (m) shall be prorated accordingly.
2.1(7)The deductions referred to in subsections (5) and (6), except the deductions referred to in paragraphs (6)(k.1) and (k.2), shall be those essential to the production of the output of the mine.
2.1(7.01)Deductions attributable to the output unsold at the end of a taxation year shall be
(a) valued at cost or at the fair market value of the output unsold as of the end of the taxation year, whichever is lower,
(b) in relation to the value determined in accordance with paragraph (a), subject to the approval of the mine assessor, and
(c) deducted only in the year of sale of the output.
2.1(7.1)When two or more operators are, in the opinion of the Minister, associated in mining, milling, smelting, refining or further processing of mineral ore within the Province and pay tax separately, the deductions referred to in subsections (5) and (6) shall be shared by the operators in proportions determined by the mine assessor, such that the total deductions do not exceed the total that would be claimed if there were one operator.
2.1(8)Except as may be permitted by paragraph (5)(d), (6)(g), (6)(l) or (6)(m), no deduction under subsection (5) or (6) shall be made in respect of
(a) capital costs of any plant, machinery, equipment or buildings;
(b) capital invested, or for interest or dividends upon capital, stock or investment; or
(c) depreciation in the value of a mine, mining land or mining property by reason of exhaustion or partial exhaustion of the ore or mineral.
2.1(9)Where the operator of a mine leases plant and equipment referred to in paragraph (b) of the definition “depreciable assets” and expenditures incurred in respect of such leasing are not otherwise deducted under this Act in calculating net revenue or net profit, there may be deducted, where permitted by regulation, amounts in accordance with the regulations not to exceed the amounts that would be deductible under paragraphs (5)(d), (6)(g), (6)(l) and (6)(m) if the plant and equipment had been purchased by the operator.
1977, c.33, s.3; 1981, c.46, s.4; 1982, c.39, s.2; 1985, c.4, s.44; 1985, c.M-14.1, s.133; 1987, c.6, s.63; 1987, c.35, s.2; 1989, c.24, s.1; 1991, c.27, s.25; 2001, c.11, s.2; 2002, c.31, s.3
Calculation of tax
2.1(1)Each year, effective April 1, 1977, the operator of a mine shall pay a tax equal in amount to
(a) two per cent of net revenue for each year, and
(b) sixteen per cent of net profits in excess of one hundred thousand dollars, less any tax credit referred to in subsection (2).
2.1(1.001)For the purposes of calculating the tax payable under paragraph (1)(a) for a new mine, the tax commences on the expiration of twenty-four consecutive months after the notification required under subsection 6(1).
2.1(1.002)Notwithstanding subsection (1.001), where a new mine is not in operation for twenty-four consecutive months after the notification required under subsection 6(1), the Minister may, on application from the operator, direct that the tax commences on the expiration of the twenty-fourth month that the new mine is in operation.
2.1(1.01)There shall be deducted from the total tax payable under subsection (1) any tax credit granted under subsection (4.1).
2.1(1.1)Where an operator has a taxation year part of which is prior to April 1, 1982 and part of which is after April 1, 1982, tax payable for the taxation year shall be calculated as follows:
(a) by dividing the taxation year into two notional taxation years, the first ending on March 31, 1982, and the second beginning on April 1, 1982;
(b) by apportioning the gross income between the two notional taxation years proportionately according to the number of days in each;
(c) by calculating
(i) tax for the first notional taxation year in accordance with this Act as it was prior to April 1, 1982, and
(ii) tax for the second notional taxation year in accordance with this Act as it becomes on April 1, 1982; and
(d) by adding together the amounts determined under paragraph (c), and the total is the tax payable in respect of that taxation year.
2.1(2)The operator of a mine shall, after the date of commencement of production, be granted one tax credit against the tax payable under paragraph (1)(b) equal to twenty-five per cent of the eligible process research expenditures.
2.1(3)Where the amount of credit calculated under subsection (2) exceeds the tax payable under paragraph (1)(b) in a given year, the balance of the credit and any further credit granted under subsection (2) shall be applied against the tax payable under paragraph (1)(b) in the succeeding year.
2.1(4)Where the amount of credit referred to in subsection (3) exceeds the tax payable under paragraph (1)(b) in a succeeding year, that balance and any further credits granted under subsection (2) shall be applied in the succeeding year.
2.1(4.1)Subject to subsections (4.2) and (4.3), in addition to any deduction allowed under paragraph (6)(k.1), the operator of a mine shall, after the date of commencement of production, be granted a tax credit against the total tax payable under subsection (1) equal to eighteen per cent of expenditures incurred by the operator on a 3D seismic survey, on deep drilling or on any other advanced exploration technology within the Province.
2.1(4.2)A tax credit shall not be granted under subsection (4.1) unless the 3D seismic survey, deep drilling or other advanced exploration technology referred to in that subsection was pre-approved by the mine assessor.
2.1(4.3)A tax credit granted under subsection (4.1) shall not exceed one million dollars in any given year and any portion of that credit that has not been applied against the total tax payable under subsection (1) in any given year may be claimed in any succeeding year.
2.1(5)Net revenue is the amount of the gross income from mining operations for the taxation year less the following deductions:
(a) the actual cost of transportation of any output sold, if paid or borne by the operator of a mine;
(b) the actual and proper operating costs for smelting and further processing of mineral ore within the Province by the operator, a subsidiary of the operator or by persons who, in the opinion of the Minister, are associated with the operator;
(c) the actual and proper costs of milling; and
(d) an amount, by way of return on capital employed by an operator in processing mineral ore or mineral products derived therefrom, equal to eight per cent of the original cost of the depreciable assets used by him in the milling or concentrating of mineral ore or mineral products derived therefrom plus fifteen per cent of the original cost of the depreciable assets used by him in the smelting or refining of mineral ore or mineral products derived therefrom, but the total amount to be deducted under this paragraph shall not be in excess of twenty-five per cent of net revenue calculated before taking the deduction allowed under this paragraph.
2.1(6)Net profit is the amount of gross income from mining operations for the taxation year less the following deductions:
(a) the actual cost of transportation of any output sold, if paid or borne by the operator of a mine;
(b) the actual and proper working expenses of a mine both underground and above ground;
(c) the salaries and wages of the persons employed in the mining operations together with the salaries and office expenses for necessary office work done in connection with the mining operations;
(d) the actual and proper costs of milling;
(d.1) the actual and proper operating costs for smelting and further processing of mineral ore within the Province by the operator, a subsidiary of the operator or by persons who, in the opinion of the Minister, are associated with the operator;
(e) the actual cost of insurance upon the equipment and buildings used by the operator in connection with the mining operations and the stock in storage;
(f) real property tax paid by the operator of a mine;
(g) an allowance of
(i) not less than five per cent of the original cost of the undepreciated depreciable assets used
(A) in a new mine or processing plant, or
(B) in an expansion of an existing mine or processing plant, if the capacity of the mine or processing plant, measured in tonnes of feed, is, in the year immediately following the expansion, increased at least twenty-five per cent over the year immediately preceding the expansion, and
(ii) not more than thirty-three and one-third per cent of the original cost of other undepreciated depreciable assets;
(h) the actual cost of workmen’s compensation and other contributions to the safety, welfare and health of the employees of the operator;
(i) donations actually made for charitable, educational or patriotic purposes that have been approved by the mine assessor but the total amount to be deducted under this paragraph shall not be in excess of ten per cent of net profit calculated before taking the deduction allowed in this paragraph;
(j) the amount of tax payable under paragraph (1)(a), before any tax credit granted under subsection (4.1) is deducted from the total tax payable under subsection (1);
(k) the royalties or rentals paid to other parties for ore extracted within the Province;
(k.1) where the operator has begun mining operations notice of which has been given to the mine assessor under paragraph 6(1)(a), the amount of one dollar and fifty cents for each dollar of eligible exploration expenditures, other than expenditures claimed as preproduction development costs, incurred by the operator
(i) on or after April 1, 1982, or
(ii) before April 1, 1982, if he was entitled, prior to April 1, 1982, to a credit under subsection (2) with respect to those eligible exploration expenditures and a credit was not applied as authorized under subsections (2), (3) and (4) against tax payable under paragraph (1)(b),
and any expenditures that are eligible for deduction under subparagraph (i) or (ii) may, if not claimed in one year, be claimed in any succeeding year;
(k.2) money submitted by the holder of a mining lease or the operator of a mine, or anyone acting on behalf of such person, and credited to the Mine Reclamation Fund established under section 111.2 of the Mining Act, and any money that is eligible for deduction under this paragraph may, if not claimed in one year, be claimed in any succeeding year;
(l) an allowance equal to eight per cent of the undepreciated balance of depreciable assets in lieu of interest payments; and
(m) an amount, by way of return on capital employed by an operator in processing mineral ore or mineral products derived from the mineral ore, equal to eight per cent of the original cost of the depreciable assets that are located within the Province and that are used by the operator in the milling or concentrating of mineral ore or mineral products derived from the mineral ore plus fifteen per cent of the original cost of the depreciable assets that are located within the Province and that are used by the operator in the smelting or refining of mineral ore or mineral products derived from the mineral ore; but the total amount to be deducted under this paragraph in respect of those depreciable assets for which a deduction has been claimed under this paragraph, or any predecessor thereof, for two or more previous taxation years, shall not be in excess of sixty-five per cent of net profits calculated before the deduction allowed under this paragraph.
2.1(6.1)Where the taxation year is less than 365 days, the deductions under paragraphs 2.1(5)(d) and 2.1(6)(g), (l) and (m) shall be prorated accordingly.
2.1(7)The deductions referred to in subsections (5) and (6), except the deductions referred to in paragraphs (6)(k.1) and (k.2), shall be those essential to the production of the output of the mine.
2.1(7.01)Deductions attributable to the output unsold at the end of a taxation year shall be
(a) valued at cost or at the fair market value of the output unsold as of the end of the taxation year, whichever is lower,
(b) in relation to the value determined in accordance with paragraph (a), subject to the approval of the mine assessor, and
(c) deducted only in the year of sale of the output.
2.1(7.1)When two or more operators are, in the opinion of the Minister, associated in mining, milling, smelting, refining or further processing of mineral ore within the Province and pay tax separately, the deductions referred to in subsections (5) and (6) shall be shared by the operators in proportions determined by the mine assessor, such that the total deductions do not exceed the total that would be claimed if there were one operator.
2.1(8)Except as may be permitted by paragraph (5)(d), (6)(g), (6)(l) or (6)(m), no deduction under subsection (5) or (6) shall be made in respect of
(a) capital costs of any plant, machinery, equipment or buildings;
(b) capital invested, or for interest or dividends upon capital, stock or investment; or
(c) depreciation in the value of a mine, mining land or mining property by reason of exhaustion or partial exhaustion of the ore or mineral.
2.1(9)Where the operator of a mine leases plant and equipment referred to in paragraph (b) of the definition “depreciable assets” and expenditures incurred in respect of such leasing are not otherwise deducted under this Act in calculating net revenue or net profit, there may be deducted, where permitted by regulation, amounts in accordance with the regulations not to exceed the amounts that would be deductible under paragraphs (5)(d), (6)(g), (6)(l) and (6)(m) if the plant and equipment had been purchased by the operator.
1977, c.33, s.3; 1981, c.46, s.4; 1982, c.39, s.2; 1985, c.4, s.44; 1985, c.M-14.1, s.133; 1987, c.6, s.63; 1987, c.35, s.2; 1989, c.24, s.1; 1991, c.27, s.25; 2001, c.11, s.2; 2002, c.31, s.3