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An Act to amend the Income Tax Act (natural
resources)
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[Assented to 7th November, 2003]
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| R.S., c. 1
(5th Supp.)
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Her Majesty, by and with the advice and
consent of the Senate and House of Commons
of Canada, enacts as follows:
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1. (1) Paragraph 12(1)(o) of the Income
Tax Act is replaced by the following:
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| Royalties, etc.
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(o) any amount (other than a prescribed
amount and an amount referred to in
paragraph 18(1)(m))
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(i) that became receivable in the year by
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(A) Her Majesty in right of Canada or
of a province,
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(B) an agent of Her Majesty in right of
Canada or of a province, or
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(C) a corporation, a commission or an
association that is controlled by Her
Majesty in right of Canada or of a
province or by an agent of Her Majesty
in right of Canada or of a province, and
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(ii) that can reasonably be considered to
be a royalty, tax (other than a tax or
portion of a tax that can reasonably be
considered to be a municipal or school
tax), lease rental or bonus, however
described, or to be in respect of the late
receipt or non-receipt of any of those
amounts, in relation to
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(A) the acquisition, development or
ownership of a Canadian resource
property of the taxpayer, or
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(B) the production in Canada
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(I) of petroleum, natural gas or
related hydrocarbons from a natural
accumulation of petroleum or
natural gas (other than a mineral
resource) located in Canada, or from
an oil or gas well located in Canada,
in respect of which the taxpayer had
an interest,
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(II) of sulphur from a natural
accumulation of petroleum or
natural gas located in Canada, from
an oil or gas well located in Canada
or from a mineral resource located
in Canada, in respect of which the
taxpayer had an interest,
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(III) to any stage that is not beyond
the prime metal stage or its
equivalent, of metal, minerals
(other than iron or petroleum or
related hydrocarbons) or coal from
a mineral resource located in
Canada in respect of which the
taxpayer had an interest,
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(IV) to any stage that is not beyond
the pellet stage or its equivalent, of
iron from a mineral resource located
in Canada in respect of which the
taxpayer had an interest, or
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(V) to any stage that is not beyond
the crude oil stage or its equivalent,
of petroleum or related
hydrocarbons from a deposit located
in Canada of bituminous sands or oil
shales in respect of which the
taxpayer had an interest;
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(2) Paragraph 12(1)(o) of the Act is
repealed.
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(3) Subsection 12(1) of the Act is amended
by adding the following after paragraph
(x.1):
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| Crown charge
rebates
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(x.2) the total of all amounts each of which
is an amount that
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(i) was received by the taxpayer,
including by way of a deduction from tax,
in the year as a refund, reimbursement,
contribution or allowance, in respect of
an amount that was at any time
receivable, directly or indirectly in any
manner whatever, by Her Majesty in
right of Canada or of a province in respect
of
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(A) the acquisition, development or
ownership of a Canadian resource
property, or
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(B) the production in Canada from a
mineral resource, a natural
accumulation of petroleum or natural
gas, or an oil or a gas well, and
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(ii) was not otherwise included in
computing the taxpayer's income for the
year or a preceding taxation year;
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(4) Paragraph 12(1)(z.5) of the Act is
repealed.
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(5) Subsection (1) applies to amounts that
become receivable after December 20,
2002.
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(6) For each taxation year that ends after
2002 and begins before 2007, paragraph
12(1)(o) of the Act applies only to the
percentage of each amount described by
that paragraph that is the total of
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(a) that proportion of 100% that the
number of days in the taxation year that
are before 2003 is of the number of days
in the taxation year,
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(b) that proportion of 90% that the
number of days in the taxation year that
are in 2003 is of the number of days in the
taxation year,
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(c) that proportion of 75% that the
number of days in the taxation year that
are in 2004 is of the number of days in the
taxation year,
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(d) that proportion of 65% that the
number of days in the taxation year that
are in 2005 is of the number of days in the
taxation year, and
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(e) that proportion of 35% that the
number of days in the taxation year that
are in 2006 is of the number of days in the
taxation year.
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(7) Subsection (6) does not apply for the
purpose of applying any provision of Part
XII of the Income Tax Regulations that
makes reference to the income of a
taxpayer.
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(8) Subsection (2) applies to taxation
years that begin after 2006.
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(9) Subsection (3) applies to taxation
years that end after 2002, except that for
each taxation year that begins before 2012
paragraph 12(1)(x.2) of the Act, as enacted
by that subsection, applies to the amount
determined in respect of that taxation year
by the formula
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[A - (B x C x D)] x E
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where
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A is the amount to which that paragraph
would apply but for this subsection;
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B is the total of all amounts each of which
was received by the taxpayer in the
taxation year under Division 1 of Part 6
or Part 11 of the Alberta Corporate Tax
Act, chapter A-15 of the Revised
Statutes of Alberta 2000;
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C is
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(a) in the case of an individual, 1,
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(b) in the case of a taxable Canadian
corporation, the greater of 0 and the
fraction determined by the formula
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1 - (F/$3 million)
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F is the amount by which the Alberta
crown royalty, within the meaning
assigned by Division 1 of Part 6 of the
Alberta Corporate Tax Act, chapter
A-15 of the Revised Statutes of
Alberta, 2000, of the corporation for
the taxation year exceeds $2 million,
and
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(c) in any other case, 0;
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D is the percentage that is the total of
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(a) that proportion of 50% that the
number of days in the taxation year
that are before 2008 is of the number of
days in the taxation year,
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(b) that proportion of 40% that the
number of days in the taxation year
that are in 2008 is of the number of days
in the taxation year,
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(c) that proportion of 30% that the
number of days in the taxation year
that are in 2009 is of the number of days
in the taxation year,
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(d) that proportion of 20% that the
number of days in the taxation year
that are in 2010 is of the number of days
in the taxation year, and
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(e) that proportion of 10% that the
number of days in the taxation year
that are in 2011 is of the number of days
in the taxation year; and
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E is
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(a) for the purpose of applying any
provision of Part XII of the Income Tax
Regulations, nil, and
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(b) for any other purpose, the
percentage that is the total of
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(i) that proportion of 10% that the
number of days in the taxation year
that are in 2003 is of the number of
days in the taxation year,
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(ii) that proportion of 25% that the
number of days in the taxation year
that are in 2004 is of the number of
days in the taxation year,
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(iii) that proportion of 35% that the
number of days in the taxation year
that are in 2005 is of the number of
days in the taxation year,
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(iv) that proportion of 65% that the
number of days in the taxation year
that are in 2006 is of the number of
days in the taxation year, and
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(v) that proportion of 100% that the
number of days in the taxation year
that are after 2006 is of the number
of days in the taxation year.
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(10) For each taxation year that ends
after 2002 and begins before 2007, the
reference to ``25%'' in paragraph 12(1)(z.5)
of the Act is to be read as a reference to the
percentage that is the total of
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(a) that proportion of 25% that the
number of days in the taxation year that
are before 2003 is of the number of days
in the taxation year,
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(b) that proportion of 22.5% that the
number of days in the taxation year that
are in 2003 is of the number of days in the
taxation year,
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(c) that proportion of 18.75% that the
number of days in the taxation year that
are in 2004 is of the number of days in the
taxation year,
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(d) that proportion of 16.25% that the
number of days in the taxation year that
are in 2005 is of the number of days in the
taxation year, and
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(e) that proportion of 8.75% that the
number of days in the taxation year that
are in 2006 is of the number of days in the
taxation year.
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(11) Subsection (4) applies to taxation
years that begin after 2006.
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2. (1) Paragraph 18(1)(l.1) of the Act is
repealed.
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(2) Paragraph 18(1)(m) of the Act is
replaced by the following:
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| Royalties, etc.
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(m) any amount (other than a prescribed
amount)
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(i) that is paid or payable in the year to
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(A) Her Majesty in right of Canada or
of a province,
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(B) an agent of Her Majesty in right of
Canada or of a province, or
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(C) a corporation, a commission or an
association that is controlled by Her
Majesty in right of Canada or of a
province or by an agent of Her Majesty
in right of Canada or of a province, and
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(ii) that can reasonably be considered to
be a royalty, tax (other than a tax or
portion of a tax that can reasonably be
considered to be a municipal or school
tax), lease rental or bonus, however
described, or to be in respect of the late
payment or non-payment of any of those
amounts, in relation to
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(A) the acquisition, development or
ownership of a Canadian resource
property, or
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(B) the production in Canada
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(I) of petroleum, natural gas or
related hydrocarbons from a natural
accumulation of petroleum or
natural gas (other than a mineral
resource) located in Canada, or from
an oil or gas well located in Canada,
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(II) of sulphur from a natural
accumulation of petroleum or
natural gas located in Canada, from
an oil or gas well located in Canada
or from a mineral resource located
in Canada,
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(III) to any stage that is not beyond
the prime metal stage or its
equivalent, of metal, minerals
(other than iron or petroleum or
related hydrocarbons) or coal from
a mineral resource located in
Canada,
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(IV) to any stage that is not beyond
the pellet stage or its equivalent, of
iron from a mineral resource located
in Canada, or
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(V) to any stage that is not beyond
the crude oil stage or its equivalent,
of petroleum or related
hydrocarbons from a deposit located
in Canada of bituminous sands or oil
shales;
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(3) Paragraph 18(1)(m) of the Act is
repealed.
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(4) Subsections (1) and (2) apply to
amounts that become payable after
December 20, 2002.
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(5) For each taxation year that ends after
2002 and begins before 2007, paragraph
18(1)(m) of the Act applies, notwithstanding
paragraph 20(1)(v) of the Act, only to the
percentage of each amount described by
that paragraph 18(1)(m) that is the total of
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(a) that proportion of 100% that the
number of days in the taxation year that
are before 2003 is of the number of days
in the taxation year,
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(b) that proportion of 90% that the
number of days in the taxation year that
are in 2003 is of the number of days in the
taxation year,
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(c) that proportion of 75% that the
number of days in the taxation year that
are in 2004 is of the number of days in the
taxation year,
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(d) that proportion of 65% that the
number of days in the taxation year that
are in 2005 is of the number of days in the
taxation year, and
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(e) that proportion of 35% that the
number of days in the taxation year that
are in 2006 is of the number of days in the
taxation year.
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(6) Subsection (5) does not apply for the
purpose of applying any provision of Part
XII of the Income Tax Regulations that
makes reference to the income of a
taxpayer.
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(7) Subsection (3) applies to taxation
years that begin after 2006.
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3. (1) Paragraph 20(1)(v.1) of the Act is
repealed.
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(2) Subsection 20(15) of the Act is
repealed.
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(3) For each taxation year that ends after
2002 and begins before 2007, paragraph
20(1)(v.1) of the Act applies only to the
percentage of the amount described by that
paragraph that is the total of
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(a) that proportion of 100% that the
number of days in the taxation year that
are before 2003 is of the number of days
in the taxation year,
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