CRA finds that costs of consultations with an aboriginal community respecting an exploration program qualified as CEE

Para. (f) of the definition of Canadian exploration expense refers to expenses incurred for the purpose of determining the extent or quality etc. of a Canadian mineral resource including “for environmental studies or community consultations.”

CRA indicated that this test would generally be satisfied respecting various expenses incurred by a Canadian exploration company in engaging with a First Nations community to obtain its support for an exploration program including funds initially advanced to the community to fund an information program, ongoing consultation expenses (e.g., of reports to the community), environmental studies as to the potential impact of the exploration program, e.g., as to species at risk, and of expenses for legally documenting arrangements agreed to with the leaders of the community during community consultations.

Neal Armstrong. Summary of 15 November 2018 External T.I. 2018-0762201E5 under s. 66.1(6) – Canadian exploration expense – para. (f).