I-3 - Taxation Act

Section 408 Disposition versions

2020-09-24

408. For the purposes of this chapter, “Canadian development expense of a taxpayer” means any cost or expense incurred after 6 May 1974 in the case of an oil business, or after 31 March 1975 in the case of a mining business, to the extent that such cost or expense constitutes

(a)  an expense incurred by him in:

i.  drilling or converting a well in Canada for the disposal of waste liquids from an oil or gas well;

ii.  drilling or completing an oil or gas well in Canada, building a temporary access road to the well or preparing a site in respect of the well, to the extent that the expense was not a Canadian exploration expense of the taxpayer in the taxation year during which it was incurred;

iii.  drilling or converting a well in Canada for the injection of water, gas or any other substance to assist in the recovery of petroleum or natural gas from another well;

iv.  drilling for water or gas in Canada for injection into a petroleum or natural gas formation; or

v.  drilling or converting a well in Canada for the purposes of monitoring fluid levels, pressure changes or other phenomena in an accumulation of petroleum or natural gas;

(a.1)  an expense incurred by him after 16 November 1978, in respect of an oil or gas well in Canada after the commencement of production from the well, to drill the well, to maintain or increase its production or to put it back into operation;

(b)  an expense incurred by him before 17 November 1978 to bring a mineral resource in Canada into production, including clearing, removing overburden and stripping, sinking a mine shaft and constructing an adit or other underground entry, to the extent that the expense was incurred prior to the commencement of production from the mine in reasonable commercial quantities;

(b.0.1)  any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer for the purpose of bringing a new mine in a mineral resource in Canada that is a bituminous sands deposit or an oil shale deposit into production and incurred before the new mine comes into production in reasonable commercial quantities, including an expense for clearing the land, removing overburden and stripping, or building an entry ramp;

(b.0.2)  any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer after 20 March 2013 for the purpose of bringing a new mine in a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, into production in reasonable commercial quantities, including an expense for clearing, removing overburden and stripping, sinking a mine shaft and constructing an adit or other underground entry, to the extent that the expense was incurred prior to the commencement of production from the new mine in reasonable commercial quantities;

(b.1)  any expense incurred by him after 31 December 1987, other than an amount included in the capital cost of a depreciable property,

i.  in sinking or excavating a mine shaft, main haulage way or similar underground work designed for continuing use, for a mine in a mineral resource in Canada built or excavated after the mine came into production, or

ii.  in extending any such shaft, haulage way or work;

(c)  despite section 144, the cost to the taxpayer of a property described in any of paragraphs b, d.1 and e of section 370 or of a right in or to such a property, other than a right that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, including any payment for the preservation of a taxpayer’s rights in respect of such a property or such a right, but excluding, except for the application of this paragraph to a taxation year that begins after 31 December 2007,

i.  any payment made to a person referred to in section 90 for the preservation of a taxpayer’s rights in respect of a Canadian resource property, and

ii.  any payment to which subsection 1 of section 144 applies by reason of paragraph b of that subsection 1;

(d)  subject to section 418.37, his share of any expense described in paragraphs a to c incurred by a partnership in a fiscal period thereof, if at the end of that fiscal period he was a member thereof, unless the taxpayer elects in respect of the share in prescribed form and manner on or before the day that is six months after the taxpayer’s taxation year in which that period ends; or

(e)  any cost or expense described in paragraphs a to c incurred by him pursuant to an agreement in writing with a corporation entered into before 1 January 1987, under which agreement he so incurs such cost or expense solely as consideration for a share, except a prescribed share, of the capital stock of that corporation issued to him or any right in or to such a share.

1975, c. 22, s. 90; 1977, c. 26, s. 41; 1978, c. 26, s. 71; 1980, c. 13, s. 40; 1982, c. 5, s. 96; 1984, c. 15, s. 89; 1985, c. 25, s. 76; 1986, c. 19, s. 83; 1988, c. 18, s. 35; 1990, c. 59, s. 164; 1994, c. 22, s. 153; 1997, c. 3, s. 71; 2005, c. 1, s. 97; 2012, c. 8, s. 54; 2015, c. 24, s. 69; 2020, c. 16, s. 65.

2015-10-26

408. For the purposes of this chapter, “Canadian development expense of a taxpayer” means any cost or expense incurred after 6 May 1974 in the case of an oil business, or after 31 March 1975 in the case of a mining business, to the extent that such cost or expense constitutes

(a)  an expense incurred by him in:

i.  drilling or converting a well in Canada for the disposal of waste liquids from an oil or gas well;

ii.  drilling or completing an oil or gas well in Canada, building a temporary access road to the well or preparing a site in respect of the well, to the extent that the expense was not a Canadian exploration expense of the taxpayer in the taxation year during which it was incurred;

iii.  drilling or converting a well in Canada for the injection of water, gas or any other substance to assist in the recovery of petroleum or natural gas from another well;

iv.  drilling for water or gas in Canada for injection into a petroleum or natural gas formation; or

v.  drilling or converting a well in Canada for the purposes of monitoring fluid levels, pressure changes or other phenomena in an accumulation of petroleum or natural gas;

(a.1)  an expense incurred by him after 16 November 1978, in respect of an oil or gas well in Canada after the commencement of production from the well, to drill the well, to maintain or increase its production or to put it back into operation;

(b)  an expense incurred by him before 17 November 1978 to bring a mineral resource in Canada into production, including clearing, removing overburden and stripping, sinking a mine shaft and constructing an adit or other underground entry, to the extent that the expense was incurred prior to the commencement of production from the mine in reasonable commercial quantities;

(b.0.1)  any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer for the purpose of bringing a new mine in a mineral resource in Canada that is a bituminous sands deposit or an oil shale deposit into production and incurred before the new mine comes into production in reasonable commercial quantities, including an expense for clearing the land, removing overburden and stripping, or building an entry ramp;

(b.0.2)  any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer after 20 March 2013 for the purpose of bringing a new mine in a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, into production in reasonable commercial quantities, including an expense for clearing, removing overburden and stripping, sinking a mine shaft and constructing an adit or other underground entry, to the extent that the expense was incurred prior to the commencement of production from the new mine in reasonable commercial quantities;

(b.1)  any expense incurred by him after 31 December 1987, other than an amount included in the capital cost of a depreciable property,

i.  in sinking or excavating a mine shaft, main haulage way or similar underground work designed for continuing use, for a mine in a mineral resource in Canada built or excavated after the mine came into production, or

ii.  in extending any such shaft, haulage way or work;

(c)  despite section 144, the cost to the taxpayer of property described in any of paragraphs b, d.1 and e of section 370 or of a right or an interest relating to such property, other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, including any payment for the preservation of a taxpayer’s rights in respect of such a property, right or interest, but excluding, except for the application of this paragraph to a taxation year that begins after 31 December 2007,

i.  any payment made to a person referred to in section 90 for the preservation of a taxpayer’s rights in respect of a Canadian resource property, and

ii.  any payment to which subsection 1 of section 144 applies by reason of paragraph b of that subsection 1;

(d)  subject to section 418.37, his share of any expense described in paragraphs a to c incurred by a partnership in a fiscal period thereof, if at the end of that fiscal period he was a member thereof, unless the taxpayer elects in respect of the share in prescribed form and manner on or before the day that is six months after the taxpayer’s taxation year in which that period ends; or

(e)  any cost or expense described in paragraphs a to c incurred by him pursuant to an agreement in writing with a corporation entered into before 1 January 1987, under which agreement he so incurs such cost or expense solely as consideration for a share, except a prescribed share, of the capital stock of that corporation issued to him or any interest in or right to such a share.

1975, c. 22, s. 90; 1977, c. 26, s. 41; 1978, c. 26, s. 71; 1980, c. 13, s. 40; 1982, c. 5, s. 96; 1984, c. 15, s. 89; 1985, c. 25, s. 76; 1986, c. 19, s. 83; 1988, c. 18, s. 35; 1990, c. 59, s. 164; 1994, c. 22, s. 153; 1997, c. 3, s. 71; 2005, c. 1, s. 97; 2012, c. 8, s. 54; 2015, c. 24, s. 69.

2012-05-09

408. For the purposes of this chapter, “Canadian development expense of a taxpayer” means any cost or expense incurred after 6 May 1974 in the case of an oil business, or after 31 March 1975 in the case of a mining business, to the extent that such cost or expense constitutes

(a)  an expense incurred by him in:

i.  drilling or converting a well in Canada for the disposal of waste liquids from an oil or gas well;

ii.  drilling or completing an oil or gas well in Canada, building a temporary access road to the well or preparing a site in respect of the well, to the extent that the expense was not a Canadian exploration expense of the taxpayer in the taxation year during which it was incurred;

iii.  drilling or converting a well in Canada for the injection of water, gas or any other substance to assist in the recovery of petroleum or natural gas from another well;

iv.  drilling for water or gas in Canada for injection into a petroleum or natural gas formation; or

v.  drilling or converting a well in Canada for the purposes of monitoring fluid levels, pressure changes or other phenomena in an accumulation of petroleum or natural gas;

(a.1)  an expense incurred by him after 16 November 1978, in respect of an oil or gas well in Canada after the commencement of production from the well, to drill the well, to maintain or increase its production or to put it back into operation;

(b)  an expense incurred by him before 17 November 1978 to bring a mineral resource in Canada into production, including clearing, removing overburden and stripping, sinking a mine shaft and constructing an adit or other underground entry, to the extent that the expense was incurred prior to the commencement of production from the mine in reasonable commercial quantities;

(b.0.1)  any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer for the purpose of bringing a new mine in a mineral resource in Canada that is a bituminous sands deposit or an oil shale deposit into production and incurred before the new mine comes into production in reasonable commercial quantities, including an expense for clearing the land, removing overburden and stripping, or building an entry ramp;

(b.1)  any expense incurred by him after 31 December 1987, other than an amount included in the capital cost of a depreciable property,

i.  in sinking or excavating a mine shaft, main haulage way or similar underground work designed for continuing use, for a mine in a mineral resource in Canada built or excavated after the mine came into production, or

ii.  in extending any such shaft, haulage way or work;

(c)  despite section 144, the cost to the taxpayer of property described in any of paragraphs b, d.1 and e of section 370 or of a right or an interest relating to such property, other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, including any payment for the preservation of a taxpayer’s rights in respect of such a property, right or interest, but excluding, except for the application of this paragraph to a taxation year that begins after 31 December 2006,

i.  any payment made to a person referred to in section 90 for the preservation of a taxpayer’s rights in respect of a Canadian resource property, and

ii.  any payment to which subsection 1 of section 144 applies by reason of paragraph b of that subsection 1;

(d)  subject to section 418.37, his share of any expense described in paragraphs a to c incurred by a partnership in a fiscal period thereof, if at the end of that fiscal period he was a member thereof, unless the taxpayer elects in respect of the share in prescribed form and manner on or before the day that is six months after the taxpayer’s taxation year in which that period ends; or

(e)  any cost or expense described in paragraphs a to c incurred by him pursuant to an agreement in writing with a corporation entered into before 1 January 1987, under which agreement he so incurs such cost or expense solely as consideration for a share, except a prescribed share, of the capital stock of that corporation issued to him or any interest in or right to such a share.

1975, c. 22, s. 90; 1977, c. 26, s. 41; 1978, c. 26, s. 71; 1980, c. 13, s. 40; 1982, c. 5, s. 96; 1984, c. 15, s. 89; 1985, c. 25, s. 76; 1986, c. 19, s. 83; 1988, c. 18, s. 35; 1990, c. 59, s. 164; 1994, c. 22, s. 153; 1997, c. 3, s. 71; 2005, c. 1, s. 97; 2012, c. 8, s. 54.

2006-03-01

408. For the purposes of this chapter, “Canadian development expense of a taxpayer” means any cost or expense incurred after 6 May 1974 in the case of an oil business, or after 31 March 1975 in the case of a mining business, to the extent that such cost or expense constitutes

(a)  an expense incurred by him in:

i.  drilling or converting a well in Canada for the disposal of waste liquids from an oil or gas well;

ii.  drilling or completing an oil or gas well in Canada, building a temporary access road to the well or preparing a site in respect of the well, to the extent that the expense was not a Canadian exploration expense of the taxpayer in the taxation year during which it was incurred;

iii.  drilling or converting a well in Canada for the injection of water, gas or any other substance to assist in the recovery of petroleum or natural gas from another well;

iv.  drilling for water or gas in Canada for injection into a petroleum or natural gas formation; or

v.  drilling or converting a well in Canada for the purposes of monitoring fluid levels, pressure changes or other phenomena in an accumulation of petroleum or natural gas;

(a.1)  an expense incurred by him after 16 November 1978, in respect of an oil or gas well in Canada after the commencement of production from the well, to drill the well, to maintain or increase its production or to put it back into operation;

(b)  an expense incurred by him before 17 November 1978 to bring a mineral resource in Canada into production, including clearing, removing overburden and stripping, sinking a mine shaft and constructing an adit or other underground entry, to the extent that the expense was incurred prior to the commencement of production from the mine in reasonable commercial quantities;

(b.1)  any expense incurred by him after 31 December 1987, other than an amount included in the capital cost of a depreciable property,

i.  in sinking or excavating a mine shaft, main haulage way or similar underground work designed for continuing use, for a mine in a mineral resource in Canada built or excavated after the mine came into production, or

ii.  in extending any such shaft, haulage way or work;

(c)  notwithstanding section 144, the cost to the taxpayer of property described in any of paragraphs b, d.1 and e of section 370 or in paragraph f of that section in respect of property described in any of paragraphs b, d.1 and e of that section, including any payment for the preservation of a taxpayer’s rights in respect of such a property, but excluding, except for the application of this paragraph to a taxation year that begins after 31 December 2006,

i.  any payment made to a person referred to in section 90 for the preservation of a taxpayer’s rights in respect of a Canadian resource property, and

ii.  any payment to which subsection 1 of section 144 applies by reason of paragraph b of that subsection 1;

(d)  subject to section 418.37, his share of any expense described in paragraphs a to c incurred by a partnership in a fiscal period thereof, if at the end of that fiscal period he was a member thereof, unless the taxpayer elects in respect of the share in prescribed form and manner on or before the day that is six months after the taxpayer’s taxation year in which that period ends; or

(e)  any cost or expense described in paragraphs a to c incurred by him pursuant to an agreement in writing with a corporation entered into before 1 January 1987, under which agreement he so incurs such cost or expense solely as consideration for a share, except a prescribed share, of the capital stock of that corporation issued to him or any interest in or right to such a share.

1975, c. 22, s. 90; 1977, c. 26, s. 41; 1978, c. 26, s. 71; 1980, c. 13, s. 40; 1982, c. 5, s. 96; 1984, c. 15, s. 89; 1985, c. 25, s. 76; 1986, c. 19, s. 83; 1988, c. 18, s. 35; 1990, c. 59, s. 164; 1994, c. 22, s. 153; 1997, c. 3, s. 71; 2005, c. 1, s. 97.