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

Section 360r3 Disposition versions

2012-09-01

360R3. In this chapter, “resource activity” of a taxpayer means

(a)  the production by the taxpayer of petroleum, natural gas or related hydrocarbons, or sulphur, from a natural accumulation, other than a mineral resource, of petroleum or natural gas in Canada, or from an oil or gas well in Canada;

(b)  the production and processing in Canada by the taxpayer or the processing in Canada by the taxpayer of ore, other than iron ore or tar sands ore, from a mineral resource in Canada to any stage that is not beyond the prime metal stage or its equivalent, iron ore from a mineral resource in Canada to any stage that is not beyond the pellet stage or its equivalent, or tar sands ore from a mineral resource in Canada to any stage that is not beyond the crude oil stage or its equivalent;

(c)  the processing in Canada by the taxpayer of heavy crude oil recovered from an oil or gas well in Canada to any stage that is not beyond the crude oil stage or its equivalent;

(d)  Canadian field processing, within the meaning assigned by section 130R3, by the taxpayer;

(e)  the processing in Canada by the taxpayer of ore, other than iron ore or tar sands ore, from a mineral resource outside Canada to any stage that is not beyond the prime metal stage or its equivalent, iron ore from a mineral resource outside Canada to any stage that is not beyond the pellet stage or its equivalent, or tar sands ore from a mineral resource outside Canada to any stage that is not beyond the crude oil stage or its equivalent; or

(f)  the ownership by the taxpayer of a right to a rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, an oil or gas well in Canada or a mineral resource in Canada.

For the purposes of this section, the following rules apply:

(a)  the production of a substance by a taxpayer includes exploration and development activities of the taxpayer with respect to the substance, whether or not extraction of the substance has begun or will ever begin;

(b)  the production or the processing, or the production and processing, of a substance by a taxpayer includes activities performed by the taxpayer that are ancillary to, or in support of, the production or the processing, or the production and processing, of that substance by the taxpayer;

(c)  the production or processing of a substance by a taxpayer includes an activity, including the ownership of property, that is undertaken before the extraction of the substance and that is undertaken for the purpose of extracting or processing the substance;

(d)  the production or the processing, or the production and processing, of a substance by a taxpayer includes activities that the taxpayer undertakes as a consequence of the production or the processing or the production and processing, of that substance, whether or not the production, the processing or the production and processing of the substance has ceased; and

(e)  despite subparagraphs a to d and subparagraphs a to f of the first paragraph, the production, the processing or the production and processing of a substance does not include any activity of a taxpayer that is part of a source described in paragraph b of section 360R21 or 360R25 where

i.  the activity is the transporting, transmitting or processing of petroleum, natural gas or related hydrocarbons, or sulphur, other than the processing of tar sands ore described in subparagraph b or e of the first paragraph and processing described in subparagraph c or d of that first paragraph, or may reasonably be attributed to a service rendered by the taxpayer, and

ii.  revenues derived from the activity are not taken into account in computing the taxpayer’s gross resource profits from a mining business or oil business.

s. 360R2.1; O.C. 1466-98, s. 43; O.C. 1470-2002, s. 37; O.C. 134-2009, s. 1.