Pre-production mine development expenses that qualify under CEE – (g.4) need not qualify under (g.3)
Para. (g.3) of the Canadian exploration expense definition provides that pre-production mine development expenses could qualify if, among other conditions, they were incurred under an agreement entered into before March 21, 2013. Would this requirement be satisfied where a principal-business corporation issued flow-through shares pursuant to a December 31, 2012 flow-through share agreement but incurred the 2013 expenses under the look-back rule pursuant to an agreement which it entered into with a subcontractor in 2013 but after March 21, 2013?
CRA ducked this question by noting that, even if the relevant agreement for purposes of the March 21, 2013 cut-off was the subcontracting agreement, the expenses would qualify under para. (g.4) as having been incurred before 2015.
Neal Armstrong. Summary of 11 October 2017 Internal T.I. 2017-0719181I7 F under s. 66.1(6) – CEE – para. (g.4).