Tables on the Structure and Rates of Main Taxes

 

Table 1. Summary of Federal Tax Rates
Tax Tax Rate
Federal Corporate Income Tax
  • General
  • Resource tax rate for mining companies
15.0% of taxable income
15.0% of resource income (commencing January 1, 2007, the resource rate is the same as the general rate)
Capital Tax (Large Corporations Tax) Nil (phase-out completed as of January 1, 2006)
Goods and Services Tax 5% of purchases (effective January 1, 2008)
Fuel Excise Tax
  • Unleaded gasoline
  • Leaded gasoline
  • Diesel
10 cents per litre
11 cents per litre
4 cents per litre

 

Table 2. Canadian Corporate Income Tax Rates Applicable to Mining (CCH, December 10, 2013)
  Tax Rate %
Federal income tax rate (basic) 38.0
Less provincial abatement 10.0
Rate after abatement 28.0
Less general rate reduction 13.0
Federal income tax rate applicable to mining 15.0

 

Resource Tax Rates Effective After December 31, 2008
From To Effective
19.5 19 January 1, 2009
19 18 January 1, 2010
18 16.5 January 1, 2011
16.5 15 January 1, 2012


 

Canadian Corporate Income Tax Rates Applicable to Mining
(CCH, for December 31, 2013 year-end)
Province/Territory Net Federal
Tax Rate
on
Resource
Income
%		 Provincial/
Territorial
Income Tax
Rate (%)		 Net Combined
Federal/Provincial/
Territorial Income
Tax Rate (%)
Alberta 15.0 10.0 25.0
British Columbia (BC1) 15.0 10.75 25.75
Manitoba 15.0 12.0 27.0
New Brunswick (NB1) 15.0 11.01 26.01
Newfoundland and Labrador 15.0 14.0 29.0
Northwest Territories 15.0 11.5 26.5
Nova Scotia 15.0 16.0 31.0
Nunavut 15.0 12.0 27.0
Ontario 15.0 10.0 25.0
Prince Edward Island 15.0 16.0 31.0
Quebec 15.0 11.9 26.9
Saskatchewan (SK1) 15.0 10.0 25.0
Yukon 15.0 15.0 30.0

BC1: British Columbia’s 2013 budget increases the rate from 10% to 11% effective April 1, 2013.
NB1: New Brunswick’s 2013 budget increases the rate from 10% to 12% effective July 1, 2013.
SK1: The general rate of 12% in 2013 is the maximum rate. A rebate of 2% is available, which reduces the rate to 10%.

 

Table 3 - Features of Provincial/Territorial Mining Tax Regimes
(as of December 10, 2013, Applicable to Fiscal Year 2013)
Province/Territory Alberta British Columbia Manitoba New Brunswick Newfoundland and Labrador Nova Scotia
Title of statute Metallic and
Industrial
Minerals
Royalty
Regulation		 Minerals Tax
Act (BC1)		 The Mining Tax
Act		 Metallic Minerals Tax
Act (NB1)		 Revenue
Administration
Act		 Mineral
Resources
Act
Mining tax or
royalty rate		 First tier 1% of mine-
mouth
revenue		 2% on
operating
income (BC2)		 n.a. 2% on net
revenue		 15% 2% of net
revenue or
NSR
Second tier 12% of net
profits after
payout (AB1)		 13% on
cumulative net
profit (BC3)		 10% (<$50 M);
65% ($50 M to $55 M);
15% ($55 M
to $100 M);
57% ($100 M to
$105 M);
17% (>$105 M) 		16% on net
profit (NB2)		 20% 15% of net
income
(NS1)
Mining tax exemption for
new mines ($)		 No No Yes (MB1) The first tier
2% royalty is
exempted in the first
2 years		 Up to $2 M/year
credit for first 10
years		 No
Exploration expenses
deductibility rate		 100% 100% 100-150% 150% 100% 100% first
3 years,
30% after
Pre-production development
expense deductibility rate		 100% 100% (BC4) 20% (MB2) 100% Over the life of
the mine		 100% first
3 years,
30% after
Depreciation
(Note 1)		 Mining assets 15%
straight-line		 100% 20% (MB2) 5% minimum
for new or
expanded
mine assets,
other assets
33.33% (NB3)		 25% (100% for
new or expanded
mine assets)		 100% first
3 years,
30% after
Processing
assets		 25%
Processing
allowance
rates		 Milling n.a. n.a. 20% 8% 8% 10%
Smelting 20% 15% 15% 10%
Refining 20% 15% 8% 10%
Other n.a. n.a. n.a. n.a.
Processing allowance caps 0-65% 0-65% 0-65% 0-65%
Special features A 10%
allowance is
permitted in
lieu of overhead		 Investment
allowance
replaces the
deduction for
interest expenses; a 33.33% super-
deduction for
capital and
pre-production costs of new or
reopened mine
or major
expansion		 Tax holiday until
payback is
achieved,
available for
new mines
established after January 1, 1993		 Finance
allowance
replaces the
deduction for
interest
expense; new
mine exempt
from the 2%
royalty in the first 2 years;
the amount of 16% tax
payable is
reduced by
25% of eligible
process
research
expenditures		 In computing
mining profit
subject to 15%
tax, a deduction
is allowed equal
to the greater of
20% of profits
(before this
allowance) and
non-Crown
royalties paid;
income taxes on
mining (up to $2 M per year)
deductible from
mining taxes for
first 10 years of
production		 n.a.
Can mine reclamation fund contributions be deducted? Yes Yes Yes Yes Yes n.a.

 

Table 3. Features of  Provincial/Territorial Mining Tax Regimes (cont'd)
Province/Territory Ontario Quebec Saskatchewan Northwest
Territories		 Nunavut Yukon
Title of statute Mining Tax
Act (ON1)		 Mining Tax Act
(QC1)		 The Mineral Taxation Act,
1983 (SK1)		 Northwest
Territories and
Nunavut Mining
Regulations (NT1)		 Northwest
Territories and
Nunavut Mining
Regulations (NU1)		 Quartz
Mining Act
Mining tax or
royalty rate		 First tier n.a. n.a. n.a. n.a. n.a. n.a.
Second tier 10% (5%
for remote
area)		 16% (QC2) 5% (cumulative sales up to 1 M
troy oz of
precious metals
or 1 M metric
tonnes of base
metals); 10%
(above the
thresholds)		 Lesser of 13%
and following
formula:
$10 000 -
$5 M: 5%;
$5 M - $10 M:
6%; for every
additional
$5 M annual
profit, rate
increases by
1% to a maximum of
14% 		Lesser of 13%
and following
formula:
$10 000 to
$5 M: 5%;
$5 M - $10 M:
6%; for every
additional
$5 M annual
profit, rate
increases by
1% to a maximum of
14%		 $10 000-
$1 M: 3%;
$1-$5 M:
5%; $5-
10 M: 6%;
for every
additional
$5 M, rate
increases by
1% to a
maximum of 12%
Mining tax exemption for new
mines ($)		 no tax for
profit under $0.5 M/
year; no tax
for the first
$10 M or
first 3 years
(10 years
for remote
area),
whichever
comes first		 No 10-year holiday
for new mines		 No No No
Exploration expenses
deductibility rate		 100% 100-125% (QC3) 150% 100% 100% 100%
Pre-production development
expense deductibility rate		 100% 150% 100% 100% 100%
Depreciation
(Note 1)		 Mining
assets		 30% straight-line
(100% for
new mine)		 30% (QC4) 100% 100% 100% 15%
straight-line
Processing
assets		 15%
straight-line
Processing
allowance
rates		 Milling 8% 7% n.a. 8% 8% Ministerial
decision
Smelting 12% 13% 8% 8% n.a.
Refining 16% 13% 8% 8% n.a.
Other 20%
northern
Ontario
refining		 n.a. n.a. n.a. n.a.
Processing allowance caps 15-65% 0-55% 0-65% 0-65% Ministerial
decision
Special features No mining
taxes are
payable in
first three
years of
production
on profits
below $10 M; the
period is
extended to
10 years for
mines in
remote
locations;
5% tax rate
for mines in
remote
locations 		Effective
April 1, 2010,
a cash refund
equal to the
lesser of 16%
of the non-
capital loss
and 8% of the
aggregate of
exploration
and develop-
ment costs is
available		 10-year tax
holiday for new
mines, starting in
2007; 150% of
pre-production
expenses are
recovered prior
to any royalties
being payable;
separate
royalties apply
to potash, coal
and uranium
producers		 Acquisition
cost of
expansion
claims
deductible
within limits		 Acquisition
cost of
expansion
claims
deductible
within limits		 (YT 1)
Can mine reclamation fund contributions be deducted? Yes Yes Yes Yes Yes No

M million; n.a. Not applicable.
Note 1: Declining-balance method unless denoted by sl = straight-line, or n.a. = not applicable.

Alberta

AB1: Before payout, 1% gross mine-mouth revenue; after payout, the greater of 1% gross mine-mouth revenue and 12% net revenue.

British Columbia

BC1 Instead of separate pool for depreciation, processing and exploration-related activities, British Columbia uses a cumulative expenditure account (CEA) in which all capital, development, and exploration-related costs are pooled.
BC2 Operating income is defined as gross revenue less operating costs and annual contribution to mine reclamation.
BC3 The first tier royalty is creditable against the second tier (13%) mining tax. The total royalty/mining tax is the sum of the two tiers.
BC4 A new mine allowance is available. The mine must begin production in reasonable commercial quantities after December 31, 1994, and before January 1, 2016. See B.C. Finance web site for details.

Manitoba

MB1: Tax holiday until payback is achieved as described in section 4.1 of the Act, available for new mines established after January 1, 1993.
MB2: Integrated with the mining tax holiday pool.

New Brunswick

NB1: In lieu of interest, you can deduct an interest/finance allowance, defined as 8% of undepreciated assets.
NB2: The first tier royalty is deductible against the second tier mining tax. The total royalty/mining tax is the sum of the two tiers.
NB3: “New mine” includes a mine where mining operations are recommenced after a 10-year period of discontinuance; (http://www.canlii.org/en/nb/laws/stat/rsnb-1973-c-m-11.01/latest/rsnb-19...).

Nova Scotia

NS1: Total mining tax is the greater of the first tier and the second tier payments.

Ontario

ON1: Ontario has a separate regime for diamonds, the Ontario Diamonds Royalty, which is contained in the Ontario Mining Act.

Quebec

QC1: This Act was formerly entitled “Mining Duties Act.” The title was replaced by section 15 of chapter 6 of the statutes of 2011. In May 2013, the newly elected Parti Québécois introduced Bill 55 which contains amendments to Quebec's Mining Tax Act. The Bill received first reading in the Quebec legislature on November 12, 2013. The new regime, if becoming law, is expected to be applied retroactively as of January 1, 2014.The current version has been in force since June 6, 2011.
QC2: Mining duty rates were 12% before March 31, 2010; 14% after March 30, 2010; 15% in 2011; and 16% in 2012.
QC3: Off-site exploration activities after March 30, 2010, would no longer be eligible to receive the super-deduction of 150%.
QC4: Due to the 2010 tax reform, a fourth class has been created for such property acquired after March 30, 2010. The depreciation allowance rate for this new class is 30%. In order to gradually limit the 100% depreciation of the third class property, the rules will specify that an operator may not claim a depreciation allowance regarding the fourth class property until the balance of the undepreciated capital cost of the third class property equals zero.

Saskatchewan

SK1: Saskatchewan levies specific mining taxes on different minerals such as potash and uranium. Here we only deal with precious and base metals.

Northwest Territories

NT1: Pursuant to the Territorial Lands Act, the current Northwest Territories and Nunavut Mining Regulations will be repealed and replaced by two distinct regulations: the "Northwest Territories Mining Regulations" and the "Nunavut Mining Regulations". This will not create additional regulations, but rather create an administrative separation between the two mining districts.

Nunavut

NT1: Pursuant to the Territorial Lands Act, the current Northwest Territories and Nunavut Mining Regulations will be repealed and replaced by two distinct regulations: the "Northwest Territories Mining Regulations" and the "Nunavut Mining Regulations". This will not create additional regulations, but rather create an administrative separation between the two mining districts.

Yukon

YT1: As of May 7, 2010, a deduction for income taxes paid is no longer permitted.