Of course, Budget 2013 is not exclusively about integrity and tightening and does include a few "goodies."
Extension of the Mineral Exploration Tax Credit for Flow-Through Share Investors
Budget 2013 proposes to extend the flow-through mining tax credit that has been in place for a number of years. Annual extensions of this 15 per cent federal tax credit have been a feature of federal budgets since 2007.
The credit is available to purchasers of flow-through shares under flow-through share agreements entered into on or before March 31, 2014. It is available only in respect of a certain subset of Canadian exploration expenses relating to specified kinds of surface or "grassroots" exploration.
Flow-through funds raised in 2014 by mining exploration companies on or before March 31, 2014 can be expended on eligible expenditures prior to the end of 2015, and under the look-back rule, can be renounced to purchasers for deduction and credit in 2014.
The measure is intended as an additional stimulus to surface exploration in Canada. Similar tax measures are in place in Ontario, British Columbia, Manitoba and Saskatchewan.
Accelerated Capital Cost Allowance
Budget 2013 continues its focus on goods manufactured or processed in Canada and encourages investments in low-emission or no-emission energy generation equipment by providing favorable CCA treatment for certain assets.
Manufacturing and Processing Machinery and Equipment
Subject to the half year rule, the accelerated 50 per cent straight-line CCA rate has been extended for two years for machinery and equipment that is used primarily in Canada for the manufacturing or processing of goods for sale or lease. This measure will apply to eligible machinery or equipment acquired after March 18, 2007 and before 2016.
Clean Energy Generation Equipment
Budget 2013 broadens the scope of clean energy generation and conservation equipment, which currently enjoys an accelerated 50 per cent declining-balance CCA rate. Eligibility requirements will be expanded for biogas production equipment to include a larger pool of organic waste, such as pulp and paper waste and waste water, beverage industry waste and wastewater and separated organics from municipal waste. Additionally, restrictions will be removed such that all types of cleaning and upgrading equipment used to treat eligible gases from waste will qualify for the favorable CCA treatment. These measures will apply to eligible equipment acquired on or after March 21, 2013.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
