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Legislative Assembly of New Brunswick
Status of Legislation - First Reading Bill
An Act to Amend the Metallic Minerals Tax Act
 
Legislature :
54
Session :
4
Bill No. :
54
Member :
Hon. Volpé
First Reading :
2002-5-23
Second Reading :
2002-5-24
Committee of the Whole :
2002-5-29
Amended :
Third Reading :
2002-5-30
Royal Assent :
2002-6-7
        
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Text of Bill :
                                                                  
   Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1                   Subsection 1(1) of the Metallic Minerals Tax Act, chapter M-11.01 of the Revised Statutes, 1973, is amended

   (a)       by adding the following definition in alphabetical order:

   “arm’s length” means arm’s length within the meaning of the Income Tax Act (Canada);

   (b)       in the definition “date of commencement of production” by striking out “sixty per cent” and substituting “sixty per cent or more”;

   (c)       in paragraph (d) of the definition “depreciable assets” by striking out “paragraph 2.1(6)(b)” and substituting “paragraphs 2.1(6)(b), (d) and (d.1)”;

   (d)       in paragraph (a) of the definition “eligible exploration expenditures” by striking out “incurred or”;

   (e)       by repealing paragraph (d) of the definition “gross income” and substituting the following:

   (d)       any smelter or further processing charges for mineral ore

      (i)                        processed outside the Province by persons other than the operator,
      
      (ii)                      processed outside the Province by the operator or by persons who, in the opinion of the Minister, are associates of the operator if, in the opinion of the Minister,
      the smelter or further processing charges are fair and reasonable, or
      
      (iii)                   processed within the Province by persons other than

         (A)             the operator,
         
         (B)             a subsidiary of the operator, or
         
         (C)             persons who, in the opinion of the Minister, are associated with the operator;

   (f)         in the definition “net profit” by striking out “(7) and (8)” and substituting “(7), (7.01), (7.1), (8) and (9)”;

   (g)       in the definition “net revenue” by striking out “(7) and (8)” and substituting “(7), (7.01), (7.1), (8) and (9)”;

   (h)       in the definition “new mine” by striking out “of active operation”.

2                   The Act is amended by adding after section 2 the following:

2.01          Except where provided otherwise in this Act or the regulations, the statements of account and other accounting documents prepared for the purposes of this Act shall be
prepared in accordance with generally accepted accounting principles.

3                   Section 2.1 of the Act is amended

   (a)       by repealing paragraph (1)(a) and substituting the following:

   (a)       two per cent of net revenue for each year, and

   (b)       by adding after subsection (1) the following:

2.1(1.001)                  For the purposes of calculating the tax payable under paragraph (1)(a) for a new mine, the tax commences on the expiration of twenty-four consecutive months
after the notification required under subsection 6(1).

2.1(1.002)                  Notwithstanding subsection (1.001), where a new mine is not in operation for twenty-four consecutive months after the notification required under subsection
6(1), the Minister may, on application from the operator, direct that the tax commences on the expiration of the twenty-fourth month that the new mine is in operation.

   (c)       in subsection (6)

      (i) by repealing paragraph (g) and substituting the following:

   (g)       an allowance of

      (i)                        not less than five per cent of the original cost of the undepreciated depreciable assets used

         (A)             in a new mine or processing plant, or
         
         (B)             in an expansion of an existing mine or processing plant, if the capacity of the mine or processing plant, measured in tonnes of feed, is, in the year immediately
         following the expansion, increased at least twenty-five per cent over the year immediately preceding the expansion, and

      (ii)                      not more than thirty-three and one-third per cent of the original cost of other undepreciated depreciable assets;

      (ii)                      by repealing paragraph (m) and substituting the following;

   (m)       an amount, by way of return on capital employed by an operator in processing mineral ore or mineral products derived from the mineral ore, equal to eight per cent of the
   original cost of the depreciable assets that are located within the Province and that are used by the operator in the milling or concentrating of mineral ore or mineral products
   derived from the mineral ore plus fifteen per cent of the original cost of the depreciable assets that are located within the Province and that are used by the operator in the
   smelting or refining of mineral ore or mineral products derived from the mineral ore; but the total amount to be deducted under this paragraph in respect of those depreciable
   assets for which a deduction has been claimed under this paragraph, or any predecessor thereof, for two or more previous taxation years, shall not be in excess of sixty-five per
   cent of net profits calculated before the deduction allowed under this paragraph.

   (d)       by adding after subsection (6) the following:

2.1(6.1) Where the taxation year is less than 365 days, the deductions under paragraphs 2.1(5)(d) and 2.1(6)(g), (l) and (m) shall be prorated accordingly.

   (e)       in the portion preceding paragraph (8)(a) by striking out “(6)(l)” and substituting “(6)(g), (6)(l)”.

4                   Subsection 3(5) of the Act is amended in the portion preceding paragraph (a) by striking out “as estimated by him” and substituting “as estimated by the taxpayer
and as approved by the mine assessor”.

5                   Section 4 of the Act is amended

   (a)       by repealing subsection (4);

   (b)       in subsection (5) by striking out “under subsection (4)”;

   (c)       by repealing subsection (6) and substituting the following:

4(6)            Where revenue is received by a taxpayer from a person who is a person with whom the taxpayer is deemed not to deal at arm’s length, the revenue shall, for the purposes
of determining the amount of tax payable under this Act, be deemed to equal the fair market value

   (a)       of the asset, or
   
   (b)       the output of the mine

in respect of which the revenue was received.

6                   The Act is amended by adding after section 4 the following:

4.1               Where two or more persons are jointly or individually the owners, lessees, tenants, holders or occupiers of a mine as a joint venture, each person engaged in the joint
venture shall be deemed to be an operator of the mine and not to be dealing at arm’s length with the other members of the joint venture.

7                   Subsection 6(1) of the Act is amended

   (a)       by repealing paragraph (a) and substituting the following:

   (a)       within ten days after commencement of mining operations, so notify the mine assessor in writing;

   (b)       in paragraph (c)

      (i)                        in subparagraph (iii) by striking out “active operations” and substituting “mining operations”;

      (ii)                      in subparagraph (iv) by striking out “active operations” and substituting “mining operations”.

8                   Section 8 of the Act is amended by adding after subsection (2) the following:

8(2.1)      The statement required under subsection (1) shall be accompanied by

   (a)       audited unconsolidated financial statements of the operator relating to the assets, liabilities, revenues and expenditures of the operator, and
   
   (b)       such additional information as is required by regulation.

9                   Section 9 of the Act is amended

   (a)       by repealing subsection (1) and substituting the following:

9(1)            Every person liable to pay a tax shall keep, at or near the mine in respect of the revenues derived or that may be derived from the mining operations of which the tax is or
may be payable, proper books of account of the minerals and mineral products, or both, taken from the mine showing

   (a)       the quantity, mass and other particulars of the minerals and mineral products, and the value of the minerals and mineral products,
   
   (b)       the returns from the smelter, refinery, or mill, and
   
   (c)         returns of the amounts derived from the sale of the minerals and mineral products.
   
(b)               by adding after subsection (3) the following:

9(3.1)      Where a person liable to pay a tax under this Act maintains books of account outside the Province, that person shall pay any travel expenses, accommodations and living
expenses incurred by the mine assessor in respect of reviewing the books of account to the extent that such expenses exceed those that would have been incurred had the person
maintained the books of account in the Province.

10                Paragraph 10(2)(a) of the Act is amended by striking out “operation” and substituting “mining operations”.

11                Subsection 27(2) of the Act is amended by striking out “a tax of double the amount for which it would have been liable under section 4” and substituting “a tax of
ten percent of the amount for which it would have been liable under section 2.1”.

12                Subsection 32(1) of the Act is amended

   (a)       in paragraph (a.2) by striking out “Minister” and substituting “mine assessor”;

   (b)       by adding after paragraph (a.6) the following:

   (a.7)   respecting the information to be submitted with the statement required under section 8;

Consequential Amendment
13                Section 84 of the Mining Act, chapter M-14.1 of the Acts of New Brunswick, 1985, is amended

   (a)       in subsection (1) by striking out “any provision of this Act or the regulations” and substituting “any provision of this Act or the Metallic Minerals Tax Act or
   regulations under those Acts”;

   (b)       in the portion preceding paragraph (2)(a) by striking out “any provision of this Act or the regulations” and substituting “any provision of this Act or the Metallic
   Minerals Tax Act or regulations under those Acts”;

   (c)       in subsection (3) by striking out “this Act and the regulations” and substituting “this Act or the Metallic Minerals Tax Act or regulations under those Acts”.

14                This Act or any provision of it comes into force on a day or days to be fixed by proclamation.


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Legend
* Private Bill
** Bill referred to Standing Committee on Law Amendments
+ Private Member's Public Bill
++ Motion for second reading defeated
+++ Debate at second reading adjourned
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