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• 1206 (1) In this Part,

  bituminous sands equipment

  bituminous sands equipment  means property of a taxpayer that

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  • (b) was acquired by the taxpayer after April 10, 1978 principally for the purpose of gaining or producing income from one or more mines, each of which is a location in a bituminous sands deposit, oil sands deposit or oil shale deposit from which material is extracted; (matériel d’exploitation de sables bitumineux)

  Canadian oil and gas exploration expense

  Canadian oil and gas exploration expense , of a taxpayer, means an outlay or expense that is made or incurred after 1980 and that would be a Canadian exploration expense, as defined in subsection 66.1(6) of the Act, of the taxpayer (other than an outlay or expense in respect of a qualified tertiary oil recovery project that is a Canadian exploration expense of the taxpayer because of subparagraph (c)(ii) or (d)(ii) of that definition) if

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  enhanced recovery equipment

  enhanced recovery equipment  means property of a taxpayer that

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  • (b) was acquired by the taxpayer after April 10, 1978 and before 1981 for use in the production of oil, from a reservoir or a deposit of bituminous sand, oil sand or oil shale in Canada operated by the taxpayer, that is incremental to oil that would be recovered using primary recovery techniques alone,

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  • (e) that has been used by any person before April 11, 1978 in the production of oil, from a reservoir in Canada, that is incremental to oil that would be recovered using primary recovery techniques alone; (matériel amélioré de récupération)

  mine

  mine  means any location where material is extracted from a resource but does not include a well for the extraction of material from a deposit of bituminous sand, oil sand or oil shale; (mine)

  primary recovery

  primary recovery  means the recovery of oil from a reservoir as a result of utilizing the natural energy of the reservoir to move the oil toward a producing well; (récupération primaire)

  qualified tertiary oil recovery project

  qualified tertiary oil recovery project  in respect of an expense incurred in a taxation year means a project that uses a method (including a method that uses carbon dioxide miscible, hydrocarbon miscible, thermal or chemical processes but not including a secondary recovery method) that is designed to recover oil from an oil well in Canada that is incremental to oil that would be recovered therefrom by primary recovery and a secondary recovery method, if

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  resource activity

  resource activity  of a taxpayer means

  • (a) the production by the taxpayer of petroleum, natural gas or related hydrocarbons or sulphur from

    • (i) an oil or gas well in Canada, or

  • (b) the production and processing in Canada by the taxpayer or the processing in Canada by the taxpayer of

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    • (iii) 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,

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  • (d) the processing in Canada by the taxpayer of

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    • (iii) tar sands ore from a mineral resource outside Canada to any stage that is not beyond the crude oil stage or its equivalent, or

  • (e) 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,

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  secondary recovery method

  secondary recovery method  means a method to recover from a reservoir oil that is incremental to oil that would be recovered therefrom by primary recovery, by supplying energy to supplement or replace the natural energy of the reservoir through the use of technically proven methods, including waterflooding; (méthode de récupération secondaire)

  specified percentage

  specified percentage  for a calendar year

  • (a) in respect of a Canadian oil and gas exploration expense of a taxpayer for that year incurred in respect of conventional lands means,

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  • (b) in respect of a Canadian oil and gas exploration expense of a taxpayer for that year incurred in respect of non-conventional lands means,

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  tar sands ore

  tar sands ore  means ore extracted, other than through a well, from a mineral resource that is a deposit of bituminous sand, oil sand or oil shale; (minerai de sables asphaltiques)

  tertiary recovery equipment

  tertiary recovery equipment  means property of a taxpayer that

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  • (b) was acquired by the taxpayer after 1980 for use in a qualified tertiary oil recovery project,

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• (8) For the purposes of the definition qualified tertiary oil recovery project in subsection (1), a specified royalty provision means:

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  • (b) The Experimental Oil Sands Royalty Regulations of Alberta (Alta. Reg. 287/77);

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  • (e) section 204 of The Freehold Oil And Gas Production Tax Regulations, 1983 of Saskatchewan (Saskatchewan Regulation 11/83);

• (8.1) For the purpose of paragraph (a) of the definition qualified tertiary oil recovery project in subsection (1), a specified royalty provision is deemed to apply as of a particular time if, at the particular time, unconditional approval for the specified royalty provision to apply at a time after the particular time is given by

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• (2) In this Part and in Schedule II,

  bitumen development phase

  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; (phase de mise en valeur du bitume)

  completion

  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 sixty day period, equal to at least 60% of the planned level of average daily output (as determined in paragraph (b) of the definition specified development phase) in respect of that phase; (achèvement)

  designated asset

  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,

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  development phase

  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, for greater certainty, the initiation of a new oil sands project); (phase de mise en valeur)

  gas or oil well equipment

  gas or oil well equipment  includes

  • (a) equipment, structures and pipelines, other than a well casing, acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, and

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  • (c) 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

  • (d) 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 referred to in paragraph (b); (matériel de puits de gaz ou de pétrole)

  oil sands project

  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; (projet de sables bitumineux)

  oil sands property

  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; (bien de sables bitumineux)

  preliminary work activity

  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:

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  specified development phase

  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,

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  specified oil sands property

  specified oil sands property  of a taxpayer means oil sands property, acquired by the taxpayer before 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,

    • (i) 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

  specified temporary access road

  specified temporary access road  means

  • (a) a temporary access road to an oil or gas well in Canada, and

  tar sands ore

  tar sands ore  means ore extracted from a deposit of bituminous sands or oil shales; (minerai de sables asphaltiques)

  upgrading development phase

  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. (phase de valorisation)

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• (5) For the purposes of paragraphs 1100(1)(w) to (ya.2), subsections 1101(4a) to (4h) and Classes 10, 28 and 41 to 41.2 of Schedule II, a taxpayer’s income from a mine , or any expression referring to a taxpayer’s income from a mine, includes income reasonably attributable to

  • (a) the processing by the taxpayer of

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    • (iii) tar sands ore all or substantially all of which is from a mineral resource owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, or

    • (iv) material extracted by a well, all or substantially all of which is from a deposit of bituminous sands or oil shales owned by the taxpayer, to any stage that is not beyond the crude oil stage or its equivalent;

  • (b) the production by the taxpayer of material from a deposit of bituminous sands or oil shales; and

  • (c) the transportation by the taxpayer of

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    • (iii) tar sands ore from a mineral resource owned by the taxpayer that has been processed by him to any stage that is not beyond the crude oil stage or its equivalent,

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• (5.1) For the purposes of Classes 41 to 41.2 of Schedule II, a taxpayer’s gross revenue from a mine includes

  • (a) revenue reasonably attributable to the processing by the taxpayer of

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    • (iii) tar sands ore from a mineral resource owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, and

    • (iv) material extracted by a well from a mineral resource owned by the taxpayer that is a deposit of bituminous sands or oil shales to any stage that is not beyond the crude oil stage or its equivalent;

  • (b) the amount, if any, by which any revenue reasonably attributable to the processing by the taxpayer of

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    • (iii) tar sands ore from a mineral resource not owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, and

    • (iv) material extracted by a well from a mineral resource not owned by the taxpayer that is a deposit of bituminous sands or oil shales to any stage that is not beyond the crude oil stage or its equivalent

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  • (c) revenue reasonably attributable to the production by the taxpayer of material from a deposit of bituminous sands or oil shales.

• (5.2) For the purpose of subsection (5.1), gross revenue from a mine does not include revenue reasonably attributable to the addition of diluent, for the purpose of transportation, to material extracted from a deposit of bituminous sands or oil shales.

• (6) For the purposes of Class 10 in Schedule II,

  • (a)  income from a mine  includes income reasonably attributable to the processing of

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    • (iii) tar sands ore from a mineral resource not owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, or

    • (iv) material extracted by a well from a mineral resource not owned by the taxpayer that is a deposit of bituminous sands or oil shales to any stage that is not beyond the crude oil stage or its equivalent; and

  • (b)  mine  includes a well for the extraction of material from a deposit of bituminous sands or oil shales or from a deposit of calcium chloride, halite or sylvite.

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• (7) For the purposes of paragraphs 1100(1)(w) to (ya.2), subsections 1101(4a) to (4h) and 1102(8) and (9), section 1107 and Classes 12, 28 and 41 to 41.2 of Schedule II,

  • (a)  mine  includes

    • (i) a well for the extraction of material from a deposit of bituminous sands or oil shales or from a deposit of calcium chloride, halite or sylvite, and

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    • (iii) an oil or gas well, or

    • (iv) a sand pit, gravel pit, clay pit, shale pit, peat bog, deposit of peat or a stone quarry (other than a kaolin pit or a deposit of bituminous sands or oil shales);

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  • (c) all wells of a taxpayer for the extraction of material from a deposit of bituminous sands or oil shales that the Minister, in consultation with the Minister of Natural Resources, determines constitute one project, are deemed to be one mine of the taxpayer.

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• (9) For the purposes of paragraph 1100(1)(a.1), subsection 1100(26) and Class 29 in Schedule II, manufacturing or processing does not include

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  • (d) operating an oil or gas well or extracting petroleum or natural gas from a natural accumulation thereof;

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  • (f) processing of

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    • (iii) tar sands ore from a mineral resource to any stage that is not beyond the crude oil stage or its equivalent;

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  • (j) processing heavy crude oil recovered from a natural reservoir in Canada to a stage that is not beyond the crude oil stage or its equivalent; or

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• (13) The definitions in this subsection apply for the purposes of this subsection, subsections (14) to (17) and Classes 43.1 and 43.2 in Schedule II.

  pulp and paper by-product

  pulp and paper by-product  means tall oil soaps and crude tall oil that are produced as by-products of the processing of wood into pulp or paper and the by-product of a pulp or paper plant’s effluent treatment or its de-inking processes. (sous-produit d’usine de pâtes ou papiers)

  pulp and paper waste

  pulp and paper waste  means

  • (a) tall oil soaps, crude tall oil and turpentine that are produced as by-products of the processing of wood into pulp or paper; and

  solution gas

  solution gas  means a fossil fuel that is gas that would otherwise be flared and has been extracted from a solution of gas and produced oil. (gaz dissous)

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• 1205 (1) For the purposes of this Part earned depletion base of a taxpayer as of a particular time means the amount by which 33 1/3 per cent of the aggregate of

  • (a) all amounts, in respect of expenditures (other than expenditures to acquire property under circumstances that entitled the taxpayer to a deduction under section 1202 or would so entitle the taxpayer if the amounts referred to in paragraphs 1202(2)(a) and (b) were sufficient for the purpose) incurred by the taxpayer after November 7, 1969 and before the particular time, each of which was

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    • (ii) the stated percentage of a Canadian exploration expense other than

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      • (G) an amount that was a Canadian oil and gas exploration expense of the taxpayer, or

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    • (iv) the stated percentage of the capital cost to the taxpayer of any processing property acquired by the taxpayer principally for the purpose of

      • (A) processing in Canada

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        • (III) tar sands ore from a qualified resource to any stage that is not beyond the crude oil stage or its equivalent, or

      • (B) processing in Canada

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        • (III) tar sands ore from an exporting resource beyond the furthest stage to which such ore or similar ore from that resource was ordinarily processed in Canada before such acquisition but not beyond the crude oil stage or its equivalent,

    • (v) where the taxpayer is a corporation that incurred a Canadian oil and gas exploration expense in respect of conventional lands in a calendar year after 1980 and before 1984, the specified percentage for that year of such expense to the extent that it is not an amount or expense referred to in clause (ii)(A), (B) or (F) or an expense that would be referred to in clause (ii)(C) or (D) if the references in those clauses to “clause (A), (B), (E), (F), (G) or (H)” were read as “clause (A), (B) or (F)”, or

    • (vi) where the taxpayer is a corporation,

      • (A) the specified percentage in respect of a Canadian oil and gas exploration expense in respect of non-conventional lands incurred in a calendar year after 1980 and before 1985 to the extent that it is not an amount or expense referred to in clause (ii)(A), (B) or (F) or an expense that would be referred to in clause (ii)(C) or (D) if the references in those clauses to “clause (A), (B), (E), (F), (G) or (H)” were read as “clause (A), (B) or (F)”,

      • (B) the stated percentage of a Canadian development expense incurred after 1980 in respect of a qualified tertiary oil recovery project of the taxpayer to the extent that such expense is not

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      • (B.1) the stated percentage of a Canadian exploration expense incurred after 1981 in respect of a qualified tertiary oil recovery project of the taxpayer that

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  • (b) all amounts, in respect of expenditures (other than expenditures referred to in paragraph (a) or expenditures to acquire property under circumstances that entitled the taxpayer to a deduction under section 1202 or would so entitle the taxpayer if the amounts referred to in paragraphs 1202(2)(a) and (b) were sufficient for the purpose) incurred by the taxpayer after May 8, 1972 and before the particular time, each of which was the stated percentage of the capital cost to the taxpayer of property that is or, but for Class 41, would be included in Class 10 in Schedule II because of paragraph (k) of the description of that Class and that was acquired for the purpose of processing in Canada

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    • (iii) tar sands ore, after its extraction from a mineral resource, to any stage that is not beyond the crude oil stage or its equivalent,

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  • (d) all expenditures (other than expenditures referred to in paragraph (a), (b) or (c)) each of which was incurred by him before November 8, 1969 relating to a mine that came into production in reasonable commercial quantities before that date and that were incurred for the purpose of

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    a bituminous sands deposit, an oil sands deposit or an oil shale deposit,

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  • (j) 33 1/3 per cent of the aggregate of all amounts, each of which is in respect of an amount of assistance or benefit in respect of Canadian exploration expenses or Canadian development expenses or that may reasonably be related to Canadian exploration activities or Canadian development activities, whether such amount is by way of a grant, subsidy, rebate, forgivable loan, deduction from royalty or tax, rebate of royalty or tax, investment allowance or any other form of assistance or benefit that

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    • (iv) where the assistance or benefit was in respect of an amount of Canadian oil and gas exploration expense added by reason of subparagraph (a)(v) or clause (a)(vi)(A) in computing

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