CRA indicates that the expenses of most community consultations and negotiations, and environmental studies undertaken after a decision to explore a particular property, qualify as CEE

Following some amendments to the Canadian exploration expense definition to include some community consultation and environmental study expenses incurred by mining companies at the exploration stage after February 2015, CRA has revised its applicable guidelines to indicate that the expenses of the following generally can qualify as CEE:

• Environmental assessments or community consultations undertaken to obtain a permit or to meet a requirement thereunder – but not where undertaken prior to a decision to explore.
• Environmental sampling or monitoring, or targeted environmental assessments (e.g., on vegetation or fish) respecting the exploration – but not general baseline environmental assessments undertaken prior to carrying out a specific exploration activity.
• Negotiation to secure surface access for exploration purposes or with the local community to secure certainty with respect to exploration operations.
• Planning for, and studies relating to, the conduct of the exploration, or physical and chemical assessments on a deposit re deciding whether to continue the exploration at the site or assessing the potential for a commercial deposit – but not preliminary planning prior to a decision to explore, or assessments of mine development options or profitability of developing the deposit into a mine.

Neal Armstrong. Summary of 24 January 2017 Internal T.I. 2016-0675902I7 under s. 66.1(6) – Canadian exploration expense – para. (f).