I-3 - Taxation Act

Section 359.4 Disposition versions

2023-09-26

359.4. Where a person gave consideration under an agreement to a corporation for the issue of a flow-through share of the corporation and, in the period that begins on the day the agreement was entered into and ends 24 months after the end of the month that includes that day, the corporation incurred Canadian development expenses, the corporation may, after it complies with section 359.10 in respect of the share and before 1 March of the first calendar year that begins after the period, renounce to the person in respect of the share an amount equal to the amount by which the part of those expenses incurred by it on or before the effective date of the renunciation, which part is in this section referred to as the “specified expenses”, exceeds the aggregate of

(a)  the assistance that the corporation has received, is entitled to receive, or may reasonably expect to receive at any time, and that can reasonably be related to the specified expenses or to Canadian development activities to which the specified expenses relate, other than assistance that can reasonably be related to expenses referred to in any of subparagraphs b to b.2;

(b)  all specified expenses that are prescribed Canadian exploration and development overhead expenses of the corporation;

(b.1)  all specified expenses that are described in paragraph c of section 408 or that are described in paragraph d of that section because of the reference in the latter paragraph to paragraph c of section 408;

(b.2)  if the agreement is entered into after 31 March 2023, all specified expenses that are not described in subparagraph b or b.1 and that would be Canadian development expenses if the definition of “mineral resource” in section 1 were read as follows:

““mineral resource” means a coal deposit, a bituminous sands deposit or an oil shale deposit;”; and

(c)  the aggregate of amounts that are renounced by the corporation on or before the date on which the renunciation is made by any other renunciation under this section or section 359.2.1 in respect of those expenses.

Notwithstanding the first paragraph, the amount that may be renounced by the corporation must not in any case exceed

(a)  the amount by which the consideration for the share exceeds the aggregate of other amounts renounced in respect of the share by the corporation under this section or section 359.2 or 359.2.1 on or before the day on which the renunciation is made; or

(b)  the amount by which the cumulative Canadian development expense of the corporation on the effective date of the renunciation computed before taking into account any amounts renounced by the corporation under this section on the date on which the renunciation is made, exceeds the aggregate of all amounts renounced by the corporation under this section in respect of any other share on the date on which the renunciation is made, and effective on or before the effective date of the renunciation.

1988, c. 18, s. 27; 1995, c. 49, s. 86; 1997, c. 3, s. 71; 1998, c. 16, s. 125; 2023, c. 19, s. 28.

2006-03-01

359.4. Where a person gave consideration under an agreement to a corporation for the issue of a flow-through share of the corporation and, in the period that begins on the day the agreement was entered into and ends 24 months after the end of the month that includes that day, the corporation incurred Canadian development expenses, the corporation may, after it complies with section 359.10 in respect of the share and before 1 March of the first calendar year that begins after the period, renounce to the person in respect of the share an amount equal to the amount by which the part of those expenses incurred by it on or before the effective date of the renunciation, which part is in this section referred to as the “specified expenses”, exceeds the aggregate of

(a)  the assistance that the corporation has received, is entitled to receive or may reasonably expect to receive at any time, and that can reasonably be related to the specified expenses or to Canadian development activities to which the specified expenses relate, other than assistance that can reasonably be related to expenses referred to in subparagraph b or b.1;

(b)  all specified expenses that are prescribed Canadian exploration and development overhead expenses of the corporation;

(b.1)  all specified expenses that are described in paragraph c of section 408 or that are described in paragraph d of that section because of the reference in the latter paragraph to paragraph c of section 408; and

(c)  the aggregate of amounts that are renounced by the corporation on or before the date on which the renunciation is made by any other renunciation under this section or section 359.2.1 in respect of those expenses.

Notwithstanding the first paragraph, the amount that may be renounced by the corporation must not in any case exceed

(a)  the amount by which the consideration for the share exceeds the aggregate of other amounts renounced in respect of the share by the corporation under this section or section 359.2 or 359.2.1 on or before the day on which the renunciation is made; or

(b)  the amount by which the cumulative Canadian development expense of the corporation on the effective date of the renunciation computed before taking into account any amounts renounced by the corporation under this section on the date on which the renunciation is made, exceeds the aggregate of all amounts renounced by the corporation under this section in respect of any other share on the date on which the renunciation is made, and effective on or before the effective date of the renunciation.

1988, c. 18, s. 27; 1995, c. 49, s. 86; 1997, c. 3, s. 71; 1998, c. 16, s. 125.