- Table 1 – Summary of Federal Tax Rates
- Table 2 – Canadian Corporate Income Tax Rates Applicable to Mining
- Table 3 – Features of Provincial/Territorial Mining Tax Regimes
Tax | Tax Rate |
---|---|
Federal Corporate Income Tax
|
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
|
10 cents per litre 11 cents per litre 4 cents per litre |
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 |
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 |
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%.
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. |
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.
- Date Modified: