permitted allowances and deductions. 
Proceeds are defined to include:

• all consideration received or 

receivable from the sale of the 
output of the mines; and

• gains from hedging, future sales, 

and forward sales.

Deductible expenses and allowances 
include:

• expenses incurred by the 

operator that are attributable to the 
production of output from the mines;

• operating and maintenance expenses 

incurred with respect to social assets 
for the mines (in excess of rents, fees, 
grants, and other amounts received in 
respect of those expenses);

• administrative and overhead 

expenses incurred that are 
attributable to the production or 
sale of the output of the mines;

• scientific research conducted in 

Canada or product use development 
research conducted in Canada to the 
extent that it is related to the output 
of the mines;

• donations made for charitable, 

educational, or benevolent purposes 
related to mining operations in 
Ontario;

• exploration and development 

expenses;

• an allowance for depreciation at 

prescribed rates;

• expenses and outlays incurred for 

transportation of output from the 
mines to purchasers;

• processing expenses; and
• a processing allowance at 

prescribed rates.

No deduction or allowance is 
available for:

• an amount on account of capital, or 

an amount in respect of depreciation, 
amortization, obsolescence, or 
depletion unless expressly permitted 
under the Mining Tax Act;

• interest and other financing costs;
• dividend payments;

• income or profit taxes and capital 

taxes;

• royalties for the right to extract 

mineral substances or for the use of 
real property in connection with the 
extraction of mineral substances paid 
to anyone other than the government 
of Canada or Ontario; or

• a government-imposed fine or 

penalty.

A loss for the year cannot be carried 
forward or back.

Exploration and Development 

Expenditures

Exploration and development 
expenditures in Ontario are added to 
a pool of expenditures and available 
to be claimed at a rate of 100%. This 

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms 
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

 

Provincial Mining Tax 

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