• costs to operate or maintain
community facilities; and
• the cost of environmental cleanup
for land not included in the mine
property.
To qualify for the CEDEA, an expense
must be approved by Natural
Resources Canada.
Gold Royalty
Under the Placer Gold Act, a 2.5%
royalty applies to all gold dust as mined
and gold bars shipped from Yukon. The
gold is valued at a fixed price of $15 per
ounce for the purposes of computing
the gold royalty.
Coal Royalty
The Coal Regulation levies a royalty
on each holder of a lease equal to
$0.10 per tonne of merchantable coal
mined on lands acquired by lease and a
royalty on each holder of a coal mining
permit equal to $0.25 per short ton of
merchantable output of the mine.
Northwest Territories
and Nunavut
In the Northwest Territories and
Nunavut, the government of Canada
is responsible for the management of
natural resources and the administration
of Crown land. The Northwest Territories
and Nunavut Mining Regulations
(Canada) impose a mining royalty on an
operator or owner of a mine located in
the Northwest Territories or Nunavut
(“the Crown royalty”).
The Crown royalty is levied on a mine-
by-mine basis and is equal to the lesser
of 13% of the value of the output of the
mine and the amount determined using
the escalating rates shown in Table 12.
The value of the output of a mine for
a fiscal year is the amount by which
the fair market value of minerals
produced and certain other amounts
exceed the permitted deductions and
allowances. The other amounts to be
included in the value of the output of a
mine include:
• payments received for the
reimbursement of costs previously
deducted,
• proceeds of disposition received
from the disposition of mining assets
in excess of the undeducted balance
of depreciable assets,
• proceeds received from insurance of
minerals produced from the mine,
• amounts withdrawn from a mining
reclamation trust, and
• any grants received from the federal
government.
Hedging gains are specifically excluded
in computing the value of the output of a
mine for the year.
An operator may claim a deduction in
computing the value of the output of a
mine for a fiscal year for the following:
• operating costs of mining and
processing minerals from the mine,
including general and indirect costs
incurred at the mine;
• the cost of marketing, selling,
storing, and transporting minerals
produced from the mine;
• the cost of reclamation at the mine;
• certain exploration costs incurred on
Crown land other than the mine site;
• a depreciation allowance equal to
100% of the cost of the depreciable
assets of the mine, not exceeding
the undeducted balance of
depreciable assets;
• a development allowance equal
to 100% of the exploration and
development costs incurred at the
mine, not exceeding the undeducted
balance at the end of the fiscal year;
• an allowance for contributions to a
mining reclamation trust; and
• an annual processing allowance equal
to the lesser of 8% of the cost of
processing assets and 65% of the
value of the output of the mine after
deduction for the preceding amounts.
The mining regulations specifically
prohibit the deduction of:
• financing costs,
• royalties,
• hedging losses,
• costs for an office not located at the
mine, and
• the cost of goods or services not
directly related to the mine.
Table 12: Mining Royalty Rates,
Northwest Territories and Nunavut,
as at June 30, 2013
Annual Profits
Royalty
Rate
*
$0 to $10,000
0%
Over $10,000 to $5 million
5%
Over $5 million to $10 million
6%
Over $10 million to $15 million
7%
Over $15 million to $20 million
8%
Over $20 million to $25 million
9%
Over $25 million to $30 million
10%
Over $30 million to $35 million
11%
Over $35 million to $40 million
12%
Over $40 million to $45 million
13%
Over $45 million
14%
* The rate is applied to profits within each
specified increment, not to the total profits.
© 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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