I-3 - Taxation Act

Section 396 Disposition versions

2020-09-24

396. A taxpayer’s Canadian exploration expenses do not however include

(a)  any consideration given by the taxpayer for any share or any right in or to a share, except as provided by paragraph e of section 395;

(b)  any expense described in paragraph e of section 395 and incurred by any other taxpayer to the extent that the expense is a Canadian exploration expense of that other taxpayer by virtue of that paragraph, a Canadian development expense of that other taxpayer by virtue of paragraph e of section 408 or a Canadian oil and gas property expense of that other taxpayer by virtue of paragraph c of section 418.2;

(c)  any amount, other than a Canadian renewable and conservation expense, included at any time in the capital cost to the taxpayer of any depreciable property of a prescribed class;

(c.1)  an expense that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after 31 December 1987;

(c.2)  any expense, incurred in respect of a mineral resource before a new mine in the mineral resource comes into production in reasonable commercial quantity, that results in income earned, or that may reasonably be expected to result in income earned, before the new mine comes into production in reasonable commercial quantity, except to the extent that the aggregate of all such expenses exceeds the aggregate of those incomes if

i.  the expense is otherwise described in paragraph c of section 395 and incurred, in respect of the resource, in prospecting, drilling, trenching, digging test pits or preliminary sampling, or

ii.  the expense is otherwise described in paragraph c.1 of section 395;

(d)  an expenditure incurred at any time after the commencement of production from a Canadian resource property of the taxpayer in order to evaluate the feasibility of a method of recovery of, or to assist in the recovery of, petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the Canadian resource property relates;

(e)  an expenditure incurred at any time relating to the injection of any substance to assist in the recovery of petroleum, natural gas or related hydrocarbons from a natural reservoir; or

(f)  the taxpayer’s share of any consideration, expense, cost or expenditure referred to in any of paragraphs a to e given or incurred, as the case may be, by a partnership.

1975, c. 22, s. 90; 1982, c. 5, s. 90; 1998, c. 16, s. 146; 2004, c. 8, s. 73; 2005, c. 1, s. 95; 2012, c. 8, s. 53; 2020, c. 16, s. 189.

2012-05-09

396. A taxpayer’s Canadian exploration expenses do not however include

(a)  any consideration given by the taxpayer for any share, or for any interest therein or right thereto, except as provided by paragraph e of section 395;

(b)  any expense described in paragraph e of section 395 and incurred by any other taxpayer to the extent that the expense is a Canadian exploration expense of that other taxpayer by virtue of that paragraph, a Canadian development expense of that other taxpayer by virtue of paragraph e of section 408 or a Canadian oil and gas property expense of that other taxpayer by virtue of paragraph c of section 418.2;

(c)  any amount, other than a Canadian renewable and conservation expense, included at any time in the capital cost to the taxpayer of any depreciable property of a prescribed class;

(c.1)  an expense that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after 31 December 1987;

(c.2)  any expense, incurred in respect of a mineral resource before a new mine in the mineral resource comes into production in reasonable commercial quantity, that results in income earned, or that may reasonably be expected to result in income earned, before the new mine comes into production in reasonable commercial quantity, except to the extent that the aggregate of all such expenses exceeds the aggregate of those incomes if

i.  the expense is otherwise described in paragraph c of section 395 and incurred, in respect of the resource, in prospecting, drilling, trenching, digging test pits or preliminary sampling, or

ii.  the expense is otherwise described in paragraph c.1 of section 395;

(d)  an expenditure incurred at any time after the commencement of production from a Canadian resource property of the taxpayer in order to evaluate the feasibility of a method of recovery of, or to assist in the recovery of, petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the Canadian resource property relates;

(e)  an expenditure incurred at any time relating to the injection of any substance to assist in the recovery of petroleum, natural gas or related hydrocarbons from a natural reservoir; or

(f)  the taxpayer’s share of any consideration, expense, cost or expenditure referred to in any of paragraphs a to e given or incurred, as the case may be, by a partnership.

1975, c. 22, s. 90; 1982, c. 5, s. 90; 1998, c. 16, s. 146; 2004, c. 8, s. 73; 2005, c. 1, s. 95; 2012, c. 8, s. 53.

2006-03-01

396. A taxpayer’s Canadian exploration expenses do not however include

(a)  any consideration given by the taxpayer for any share, or for any interest therein or right thereto, except as provided by paragraph e of section 395;

(b)  any expense described in paragraph e of section 395 and incurred by any other taxpayer to the extent that the expense is a Canadian exploration expense of that other taxpayer by virtue of that paragraph, a Canadian development expense of that other taxpayer by virtue of paragraph e of section 408 or a Canadian oil and gas property expense of that other taxpayer by virtue of paragraph c of section 418.2;

(c)  any amount, other than a Canadian renewable and conservation expense, included at any time in the capital cost to the taxpayer of any depreciable property of a prescribed class;

(c.1)  an expense that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after 31 December 1987;

(c.2)  the portion of any expense that may reasonably be considered to have resulted in income earned by the taxpayer if

i.  the expense is an expense otherwise described in paragraph c of section 395 and incurred in prospecting, drilling, trenching, digging test pits or preliminary sampling, and the income is earned before a new mine of the taxpayer in the mineral resource referred to in that paragraph c comes into production in reasonable commercial quantity, or

ii.  the expense is otherwise described in paragraph c.1 of section 395, and the income is earned before the new mine referred to in that paragraph c.1 comes into production in reasonable commercial quantity;

(d)  an expenditure incurred at any time after the commencement of production from a Canadian resource property of the taxpayer in order to evaluate the feasibility of a method of recovery of, or to assist in the recovery of, petroleum, natural gas or related hydrocarbons from the portion of a natural reservoir to which the Canadian resource property relates;

(e)  an expenditure incurred at any time relating to the injection of any substance to assist in the recovery of petroleum, natural gas or related hydrocarbons from a natural reservoir; or

(f)  the taxpayer’s share of any consideration, expense, cost or expenditure referred to in any of paragraphs a to e given or incurred, as the case may be, by a partnership.

1975, c. 22, s. 90; 1982, c. 5, s. 90; 1998, c. 16, s. 146; 2004, c. 8, s. 73; 2005, c. 1, s. 95.