I-3, r. 1 - Regulation respecting the Taxation Act

Section 130r3 Disposition versions

2023-12-13

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“accelerated investment incentive property” means property of a taxpayer, other than property included in any of Classes 54 to 56 in Schedule B, that

(a)  is acquired by the taxpayer after 20 November 2018 and is considered to be available for use before 1 January 2028; and

(b)  meets either of the following conditions:

i.  the property is not property in respect of which an amount has been deducted under paragraph a of section 130 or the second paragraph of section 130.1 of the Act by a person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or

ii.  the property was not

(1)  acquired in circumstances where the taxpayer is deemed to have been allowed to deduct or deducted an amount under paragraph a of section 130 of the Act in respect of the property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or

(2)  previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“designated immediate expensing property”, for a taxation year, means property of an eligible person or partnership, in respect of which the following conditions are met:

(a)  the property is immediate expensing property of the eligible person or partnership;

(b)  the property became available for use by the eligible person or partnership in the taxation year; and

(c)  the eligible person or partnership designates, in the prescribed form, the property as designated immediate expensing property and the prescribed form is filed with the Minister for the taxation year within the following time limit:

i.  if the eligible person or partnership is a partnership, on or before the day that is 12 months after the day on which any member of the partnership is required to file an information return under section 1086R78 for the fiscal period to which the designation relates, or

ii.  in any other case, on or before the day that is 12 months after the eligible person or partnership’s filing-due date for the taxation year to which the designation relates;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible liquefaction building” of a taxpayer, in respect of an eligible liquefaction facility of the taxpayer, means property, other than property that has been used or acquired for use for any purpose before it was acquired by the taxpayer or a residential building, acquired by the taxpayer after 19 February 2015 and before 1 January 2025 that is included in Class 1 in Schedule B because of paragraph q of that class and that is used as part of the eligible liquefaction facility;

“eligible liquefaction equipment” in respect of an eligible liquefaction facility of a taxpayer, means property of the taxpayer that is used in connection with the liquefaction of natural gas and that

(a)  is acquired by the taxpayer after 19 February 2015 and before 1 January 2025;

(b)  is included in Class 47 in Schedule B because of paragraph b of that class;

(c)  has not been used or acquired for use for any purpose before it was acquired by the taxpayer;

(d)  is not excluded equipment; and

(e)  is used as part of the eligible liquefaction facility;

“eligible liquefaction facility” of a taxpayer means a self-contained system located in Canada, including buildings, structures and equipment, that is used or intended to be used by the taxpayer for the purpose of liquefying natural gas;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“eligible person or partnership”, for a taxation year, means

(a)  a corporation that is a Canadian-controlled private corporation throughout the year;

(b)  an individual, other than a trust, who is resident in Canada throughout the year; or

(c)  a Canadian partnership all of the members of which are, throughout the period, persons described in paragraph a or b;

“excluded equipment” means

(a)  pipelines, other than pipelines used to move natural gas, or its components that are extracted, within an eligible liquefaction facility during the liquefaction process or used to move liquefied natural gas;

(b)  equipment used exclusively to regasify liquefied natural gas; and

(c)  electrical generation equipment;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“immediate expensing property”, for a taxation year, means a particular property of a class in Schedule B of an eligible person or partnership, other than accelerated investment incentive property that is qualified intellectual property and that became available for use before 1 January 2024, accelerated investment incentive property included in Class 50 in Schedule B that is used primarily in Québec in the course of a business and that became available for use before 1 January 2024, or property included in any of Classes 1 to 6, 14.1, 17, 47, 49 and 51 in that schedule, where the particular property

(a)  is acquired by the eligible person or partnership

i.  after 18 April 2021, where the eligible person or partnership is a Canadian-controlled private corporation, or

ii.  after 31 December 2021, where the eligible person or partnership is an individual or a Canadian partnership;

(b)  becomes available for use

i.  before 1 January 2025, where the eligible person or partnership is an individual or a Canadian partnership all the members of which are individuals throughout the taxation year, or

ii.  before 1 January 2024, in any other case; and

(c)  meets any of the following conditions:

i.  the particular property

(1)  has not been used for any purpose before it was acquired by the eligible person or partnership, and

(2)  is not a property in respect of which an amount has been deducted by a person or partnership under paragraph a of section 130 or the second paragraph of section 130.1 of the Act for a taxation year that ends before the time the property was acquired by the eligible person or partnership, or

ii.  the particular property

(1)  was not acquired in circumstances where the eligible person or partnership was deemed to have been allowed to deduct or deducted an amount under paragraph a of section 130 of the Act in respect of the particular property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a class in Schedule B of the eligible person or partnership was reduced by an amount determined by reference to the amount by which the capital cost of the particular property to the eligible person or partnership exceeds its cost amount, and

(2)  was not previously owned or acquired by the eligible person or partnership or by a person or partnership with which the eligible person or partnership did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“qualified intellectual property” of a taxpayer means incorporeal property, within the meaning that would be assigned to that expression by the first paragraph of section 130R10 if the expression were read with “or a right to use patented information” inserted after “patent”, that is acquired by the taxpayer after 3 December 2018 and that

(a)  is included in any of Classes 14, 14.1 and 44 in Schedule B;

(b)  is acquired by the taxpayer in the course of a technology transfer, within the meaning of the first paragraph of section 130R10, or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer’s business;

(c)  begins to be used within a reasonable time after being acquired or after its development is completed;

(d)  is used, for the period covering the process of implementing the innovation or invention, referred to in this definition as the “implementation period”, only in Québec and primarily in the course of carrying on a business by the taxpayer or, where applicable, by another person who acquired the property in circumstances described in paragraph a or b of section 130R149; in that respect, the incorporeal property is considered to be used only in Québec during the implementation period when it is used as part of the process of implementing the innovation or invention and the efforts to implement the innovation or invention are made only in Québec;

(e)  is not, for the implementation period, property used for the purposes of earning or producing gross revenue consisting of rent or a royalty; and

(f)  is not property acquired from a person or partnership with which the taxpayer does not deal at arm’s length;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“taxpayer” includes an eligible person or partnership;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9; O.C. 321-2017, s. 6; O.C. 164-2021, s. 3; S.Q. 2021, c. 18, s. 235; O.C. 90-2023, s. 5; S.Q. 2023, c. 2, s. 97; O.C. 1726-2023, s. 4.

2023-03-15

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“accelerated investment incentive property” means property of a taxpayer, other than property included in any of Classes 54 to 56 in Schedule B, that

(a)  is acquired by the taxpayer after 20 November 2018 and is considered to be available for use before 1 January 2028; and

(b)  meets either of the following conditions:

i.  the property is not property in respect of which an amount has been deducted under paragraph a of section 130 or the second paragraph of section 130.1 of the Act by a person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or

ii.  the property was not

(1)  acquired in circumstances where the taxpayer is deemed to have been allowed to deduct or deducted an amount under paragraph a of section 130 of the Act in respect of the property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or

(2)  previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“designated immediate expensing property”, for a taxation year, means property of an eligible person or partnership, in respect of which the following conditions are met:

(a)  the property is immediate expensing property of the eligible person or partnership;

(b)  the property became available for use by the eligible person or partnership in the taxation year; and

(c)  the eligible person or partnership designates, in the prescribed form, the property as designated immediate expensing property and the prescribed form is filed with the Minister for the taxation year within the following time limit:

i.  if the eligible person or partnership is a partnership, on or before the day that is 12 months after the day on which any member of the partnership is required to file an information return under section 1086R78 for the fiscal period to which the designation relates, or

ii.  in any other case, on or before the day that is 12 months after the eligible person or partnership’s filing-due date for the taxation year to which the designation relates;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible liquefaction building” of a taxpayer, in respect of an eligible liquefaction facility of the taxpayer, means property, other than property that has been used or acquired for use for any purpose before it was acquired by the taxpayer or a residential building, acquired by the taxpayer after 19 February 2015 and before 1 January 2025 that is included in Class 1 in Schedule B because of paragraph q of that class and that is used as part of the eligible liquefaction facility;

“eligible liquefaction equipment” in respect of an eligible liquefaction facility of a taxpayer, means property of the taxpayer that is used in connection with the liquefaction of natural gas and that

(a)  is acquired by the taxpayer after 19 February 2015 and before 1 January 2025;

(b)  is included in Class 47 in Schedule B because of paragraph b of that class;

(c)  has not been used or acquired for use for any purpose before it was acquired by the taxpayer;

(d)  is not excluded equipment; and

(e)  is used as part of the eligible liquefaction facility;

“eligible liquefaction facility” of a taxpayer means a self-contained system located in Canada, including buildings, structures and equipment, that is used or intended to be used by the taxpayer for the purpose of liquefying natural gas;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“eligible person or partnership”, for a taxation year, means

(a)  a corporation that is a Canadian-controlled private corporation throughout the year;

(b)  an individual, other than a trust, who is resident in Canada throughout the year; or

(c)  a Canadian partnership all of the members of which are, throughout the period, persons described in paragraph a or b;

“excluded equipment” means

(a)  pipelines, other than pipelines used to move natural gas, or its components that are extracted, within an eligible liquefaction facility during the liquefaction process or used to move liquefied natural gas;

(b)  equipment used exclusively to regasify liquefied natural gas; and

(c)  electrical generation equipment;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“immediate expensing property”, for a taxation year, means a particular property of a class in Schedule B of an eligible person or partnership (other than accelerated investment incentive property that is qualified intellectual property, accelerated investment incentive property included in Class 50 in Schedule B that is used primarily in Québec in the course of a business and that became available for use before 1 January 2024, or property included in any of Classes 1 to 6, 14.1, 17, 47, 49 and 51 in that schedule), where the particular property

(a)  is acquired by the eligible person or partnership

i.  after 18 April 2021, where the eligible person or partnership is a Canadian-controlled private corporation, or

ii.  after 31 December 2021, where the eligible person or partnership is an individual or a Canadian partnership;

(b)  becomes available for use

i.  before 1 January 2025, where the eligible person or partnership is an individual or a Canadian partnership all the members of which are individuals throughout the taxation year, or

ii.  before 1 January 2024, in any other case; and

(c)  meets any of the following conditions:

i.  the particular property

(1)  has not been used for any purpose before it was acquired by the eligible person or partnership, and

(2)  is not a property in respect of which an amount has been deducted by a person or partnership under paragraph a of section 130 or the second paragraph of section 130.1 of the Act for a taxation year that ends before the time the property was acquired by the eligible person or partnership, or

ii.  the particular property

(1)  was not acquired in circumstances where the eligible person or partnership was deemed to have been allowed to deduct or deducted an amount under paragraph a of section 130 of the Act in respect of the particular property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a class in Schedule B of the eligible person or partnership was reduced by an amount determined by reference to the amount by which the capital cost of the particular property to the eligible person or partnership exceeds its cost amount, and

(2)  was not previously owned or acquired by the eligible person or partnership or by a person or partnership with which the eligible person or partnership did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“qualified intellectual property” of a taxpayer means incorporeal property, within the meaning that would be assigned to that expression by the first paragraph of section 130R10 if the expression were read with “or a right to use patented information” inserted after “patent”, that is acquired by the taxpayer after 3 December 2018 and that

(a)  is included in any of Classes 14, 14.1 and 44 in Schedule B;

(b)  is acquired by the taxpayer in the course of a technology transfer, within the meaning of the first paragraph of section 130R10, or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer’s business;

(c)  begins to be used within a reasonable time after being acquired or after its development is completed;

(d)  is used, for the period covering the process of implementing the innovation or invention, referred to in this definition as the “implementation period”, only in Québec and primarily in the course of carrying on a business by the taxpayer or, where applicable, by another person who acquired the property in circumstances described in paragraph a or b of section 130R149; in that respect, the incorporeal property is considered to be used only in Québec during the implementation period when it is used as part of the process of implementing the innovation or invention and the efforts to implement the innovation or invention are made only in Québec;

(e)  is not, for the implementation period, property used for the purposes of earning or producing gross revenue consisting of rent or a royalty; and

(f)  is not property acquired from a person or partnership with which the taxpayer does not deal at arm’s length;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“taxpayer” includes an eligible person or partnership;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9; O.C. 321-2017, s. 6; O.C. 164-2021, s. 3; S.Q. 2021, c. 18, s. 235; O.C. 90-2023, s. 5; S.Q. 2023, c. 2, s. 97.

2023-02-08

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“accelerated investment incentive property” means property of a taxpayer, other than property included in any of Classes 54 to 56 in Schedule B, that

(a)  is acquired by the taxpayer after 20 November 2018 and is considered to be available for use before 1 January 2028; and

(b)  meets either of the following conditions:

i.  the property is not property in respect of which an amount has been deducted under paragraph a of section 130 or the second paragraph of section 130.1 of the Act by a person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or

ii.  the property was not

(1)  acquired in circumstances where the taxpayer is deemed to have been allowed or deducted an amount under paragraph a of section 130 of the Act in respect of the property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or

(2)  previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible liquefaction building” of a taxpayer, in respect of an eligible liquefaction facility of the taxpayer, means property, other than property that has been used or acquired for use for any purpose before it was acquired by the taxpayer or a residential building, acquired by the taxpayer after 19 February 2015 and before 1 January 2025 that is included in Class 1 in Schedule B because of paragraph q of that class and that is used as part of the eligible liquefaction facility;

“eligible liquefaction equipment” in respect of an eligible liquefaction facility of a taxpayer, means property of the taxpayer that is used in connection with the liquefaction of natural gas and that

(a)  is acquired by the taxpayer after 19 February 2015 and before 1 January 2025;

(b)  is included in Class 47 in Schedule B because of paragraph b of that class;

(c)  has not been used or acquired for use for any purpose before it was acquired by the taxpayer;

(d)  is not excluded equipment; and

(e)  is used as part of the eligible liquefaction facility;

“eligible liquefaction facility” of a taxpayer means a self-contained system located in Canada, including buildings, structures and equipment, that is used or intended to be used by the taxpayer for the purpose of liquefying natural gas;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“excluded equipment” means

(a)  pipelines, other than pipelines used to move natural gas, or its components that are extracted, within an eligible liquefaction facility during the liquefaction process or used to move liquefied natural gas;

(b)  equipment used exclusively to regasify liquefied natural gas; and

(c)  electrical generation equipment;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“qualified intellectual property” of a taxpayer means incorporeal property, within the meaning that would be assigned to that expression by the first paragraph of section 130R10 if the expression were read with “or a right to use patented information” inserted after “patent”, that is acquired by the taxpayer after 3 December 2018 and that

(a)  is included in any of Classes 14, 14.1 and 44 in Schedule B;

(b)  is acquired by the taxpayer in the course of a technology transfer, within the meaning of the first paragraph of section 130R10, or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer’s business;

(c)  begins to be used within a reasonable time after being acquired or after its development is completed;

(d)  is used, for the period covering the process of implementing the innovation or invention, referred to in this definition as the “implementation period”, only in Québec and primarily in the course of carrying on a business by the taxpayer or, where applicable, by another person who acquired the property in circumstances described in paragraph a or b of section 130R149; in that respect, the incorporeal property is considered to be used only in Québec during the implementation period when it is used as part of the process of implementing the innovation or invention and the efforts to implement the innovation or invention are made only in Québec;

(e)  is not, for the implementation period, property used for the purposes of earning or producing gross revenue consisting of rent or a royalty; and

(f)  is not property acquired from a person or partnership with which the taxpayer does not deal at arm’s length;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9; O.C. 321-2017, s. 6; O.C. 164-2021, s. 3; S.Q. 2021, c. 18, s. 235; O.C. 90-2023, s. 5.

2021-06-04

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“accelerated investment incentive property” means property of a taxpayer (other than property included in Class 54 or 55 in Schedule B) that

(a)  is acquired by the taxpayer after 20 November 2018 and is considered to be available for use before 1 January 2028; and

(b)  meets either of the following conditions:

i.  the property

(1)  has not been used for any purpose before it was acquired by the taxpayer, and

(2)  is not property in respect of which an amount has been deducted under paragraph a of section 130 or the second paragraph of section 130.1 of the Act by another person or partnership, or

ii.  the property was not

(1)  acquired in circumstances where the taxpayer is deemed to have been allowed or deducted an amount under paragraph a of section 130 of the Act in respect of the property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or

(2)  previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible liquefaction building” of a taxpayer, in respect of an eligible liquefaction facility of the taxpayer, means property, other than property that has been used or acquired for use for any purpose before it was acquired by the taxpayer or a residential building, acquired by the taxpayer after 19 February 2015 and before 1 January 2025 that is included in Class 1 in Schedule B because of paragraph q of that class and that is used as part of the eligible liquefaction facility;

“eligible liquefaction equipment” in respect of an eligible liquefaction facility of a taxpayer, means property of the taxpayer that is used in connection with the liquefaction of natural gas and that

(a)  is acquired by the taxpayer after 19 February 2015 and before 1 January 2025;

(b)  is included in Class 47 in Schedule B because of paragraph b of that class;

(c)  has not been used or acquired for use for any purpose before it was acquired by the taxpayer;

(d)  is not excluded equipment; and

(e)  is used as part of the eligible liquefaction facility;

“eligible liquefaction facility” of a taxpayer means a self-contained system located in Canada, including buildings, structures and equipment, that is used or intended to be used by the taxpayer for the purpose of liquefying natural gas;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“excluded equipment” means

(a)  pipelines, other than pipelines used to move natural gas, or its components that are extracted, within an eligible liquefaction facility during the liquefaction process or used to move liquefied natural gas;

(b)  equipment used exclusively to regasify liquefied natural gas; and

(c)  electrical generation equipment;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“qualified intellectual property” of a taxpayer means incorporeal property, within the meaning that would be assigned to that expression by the first paragraph of section 130R10 if the expression were read with “or a right to use patented information” inserted after “patent”, that is acquired by the taxpayer after 3 December 2018 and that

(a)  is included in any of Classes 14, 14.1 and 44 in Schedule B;

(b)  is acquired by the taxpayer in the course of a technology transfer, within the meaning of the first paragraph of section 130R10, or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer’s business;

(c)  begins to be used within a reasonable time after being acquired or after its development is completed;

(d)  is used, for the period covering the process of implementing the innovation or invention, referred to in this definition as the “implementation period”, only in Québec and primarily in the course of carrying on a business by the taxpayer or, where applicable, by another person who acquired the property in circumstances described in paragraph a or b of section 130R149; in that respect, the incorporeal property is considered to be used only in Québec during the implementation period when it is used as part of the process of implementing the innovation or invention and the efforts to implement the innovation or invention are made only in Québec;

(e)  is not, for the implementation period, property used for the purposes of earning or producing gross revenue consisting of rent or a royalty; and

(f)  is not property acquired from a person or partnership with which the taxpayer does not deal at arm’s length;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9; O.C. 321-2017, s. 6; O.C. 164-2021, s. 3; S.Q. 2021, c. 18, s. 235.

2021-03-10

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“accelerated investment incentive property” means property of a taxpayer that

(a)  is acquired by the taxpayer after 20 November 2018 and is considered to be available for use before 1 January 2028; and

(b)  meets either of the following conditions:

i.  the property

(1)  has not been used for any purpose before it was acquired by the taxpayer, and

(2)  is not property in respect of which an amount has been deducted under paragraph a of section 130 or the second paragraph of section 130.1 of the Act by another person or partnership, or

ii.  the property was not

(1)  acquired in circumstances where the taxpayer is deemed to have been allowed or deducted an amount under paragraph a of section 130 of the Act in respect of the property in computing income for previous taxation years, or where the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or

(2)  previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership;

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible liquefaction building” of a taxpayer, in respect of an eligible liquefaction facility of the taxpayer, means property, other than property that has been used or acquired for use for any purpose before it was acquired by the taxpayer or a residential building, acquired by the taxpayer after 19 February 2015 and before 1 January 2025 that is included in Class 1 in Schedule B because of paragraph q of that class and that is used as part of the eligible liquefaction facility;

“eligible liquefaction equipment” in respect of an eligible liquefaction facility of a taxpayer, means property of the taxpayer that is used in connection with the liquefaction of natural gas and that

(a)  is acquired by the taxpayer after 19 February 2015 and before 1 January 2025;

(b)  is included in Class 47 in Schedule B because of paragraph b of that class;

(c)  has not been used or acquired for use for any purpose before it was acquired by the taxpayer;

(d)  is not excluded equipment; and

(e)  is used as part of the eligible liquefaction facility;

“eligible liquefaction facility” of a taxpayer means a self-contained system located in Canada, including buildings, structures and equipment, that is used or intended to be used by the taxpayer for the purpose of liquefying natural gas;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“excluded equipment” means

(a)  pipelines, other than pipelines used to move natural gas, or its components that are extracted, within an eligible liquefaction facility during the liquefaction process or used to move liquefied natural gas;

(b)  equipment used exclusively to regasify liquefied natural gas; and

(c)  electrical generation equipment;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“qualified intellectual property” of a taxpayer means incorporeal property, within the meaning that would be assigned to that expression by the first paragraph of section 130R10 if the expression were read with “or a right to use patented information” inserted after “patent”, that is acquired by the taxpayer after 3 December 2018 and that

(a)  is included in any of Classes 14, 14.1 and 44 in Schedule B;

(b)  is acquired by the taxpayer in the course of a technology transfer, within the meaning of the first paragraph of section 130R10, or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer’s business;

(c)  begins to be used within a reasonable time after being acquired or after its development is completed;

(d)  is used, for the period covering the process of implementing the innovation or invention, referred to in this definition as the “implementation period”, only in Québec and primarily in the course of carrying on a business by the taxpayer or, where applicable, by another person who acquired the property in circumstances described in paragraph a or b of section 130R149; in that respect, the incorporeal property is considered to be used only in Québec during the implementation period when it is used as part of the process of implementing the innovation or invention and the efforts to implement the innovation or invention are made only in Québec;

(e)  is not, for the implementation period, property used for the purposes of earning or producing gross revenue consisting of rent or a royalty; and

(f)  is not property acquired from a person or partnership with which the taxpayer does not deal at arm’s length;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9; O.C. 321-2017, s. 6; O.C. 164-2021, s. 3.

2017-04-12

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible liquefaction building” of a taxpayer, in respect of an eligible liquefaction facility of the taxpayer, means property, other than property that has been used or acquired for use for any purpose before it was acquired by the taxpayer or a residential building, acquired by the taxpayer after 19 February 2015 and before 1 January 2025 that is included in Class 1 in Schedule B because of paragraph q of that class and that is used as part of the eligible liquefaction facility;

“eligible liquefaction equipment” in respect of an eligible liquefaction facility of a taxpayer, means property of the taxpayer that is used in connection with the liquefaction of natural gas and that

(a)  is acquired by the taxpayer after 19 February 2015 and before 1 January 2025;

(b)  is included in Class 47 in Schedule B because of paragraph b of that class;

(c)  has not been used or acquired for use for any purpose before it was acquired by the taxpayer;

(d)  is not excluded equipment; and

(e)  is used as part of the eligible liquefaction facility;

“eligible liquefaction facility” of a taxpayer means a self-contained system located in Canada, including buildings, structures and equipment, that is used or intended to be used by the taxpayer for the purpose of liquefying natural gas;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“excluded equipment” means

(a)  pipelines, other than pipelines used to move natural gas, or its components that are extracted, within an eligible liquefaction facility during the liquefaction process or used to move liquefied natural gas;

(b)  equipment used exclusively to regasify liquefied natural gas; and

(c)  electrical generation equipment;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9; O.C. 321-2017, s. 6.

2012-09-01

130R3. In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“bitumen development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

(a)  the processing in Canada of raw natural gas at a field separation and dehydration facility;

(b)  the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

(c)  the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

(d)  the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

(e)  the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

(a)  the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

(b)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer’s oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

(a)  network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

(b)  radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

(c)  network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

(d)  network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

(e)  equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

(f)  wires or cables, or similar property; and

(g)  structures;

“designated asset” in respect of a development phase of a taxpayer’s oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a)  in the case of a bitumen development phase,

i.  a crusher,

ii.  a froth treatment plant,

iii.  a primary separation unit,

iv.  a steam generation plant,

v.  a cogeneration plant, or

vi.  a water treatment plant; or

(b)  in the case of an upgrading development phase,

i.  a gasifier unit,

ii.  a vacuum distillation unit,

iii.  a hydrocracker unit,

iv.  a hydrotreater unit,

v.  a hydroprocessor unit, or

vi.  a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“development phase” of a taxpayer’s oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible non-residential building” means a taxpayer’s building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

(a)  equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

(b)  a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

(a)  is executed by the equipment;

(b)  can be altered by the user of the equipment;

(c)  instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

(d)  depends upon the characteristics of the data being processed to determine the sequence of its execution;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

(a)  is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

(b)  has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

(c)  is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer’s oil sands project including, without limiting the generality of the foregoing, the following activities:

(a)  obtaining permits or regulatory approvals;

(b)  performing design or engineering work;

(c)  conducting feasibility studies;

(d)  conducting environmental assessments;

(e)  clearing or excavating land;

(f)  building roads; and

(g)  entering into contracts;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer’s oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

(a)  not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

(b)  the planned level of average daily output is the lesser of,

i.  the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

ii.  the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer’s use of which is reasonably required

(a)  for a specified development phase of an oil sands project of the taxpayer to reach completion; or

(b)  as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

(a)  a temporary access road to an oil or gas well in Canada; or

(b)  a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

(a)  performs compilation, assembly, mapping, management or processing of other programs;

(b)  facilitates the functioning of a computer system by other programs;

(c)  provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

(d)  provides general support functions such as data management, report generation or security control; or

(e)  provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer’s oil sands project means a development phase that expands the oil sands project’s capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

(a)  after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

(b)  from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

(c)  from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

(d)  from a person not resident in Canada; or

(e)  unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

(a)  for which the principal taping or filming work began before 19 December 1990;

(b)  for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

(c)  that is referred to in paragraph b of section 726.4.7.2 of the Act; or

(d)  that is acquired

i.  after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

ii.  from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

iii.  from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

iv.  from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

(a)  gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

(b)  where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9.