Principal Issues: 1. Whether eligible depreciable property to be acquired for a new sylvite (potash ore) mine would qualify for inclusion in paragraph (a) of Class 41. 2.Whether for the purposes of paragraphs 1104(5)(a)(i) and 1104(5)(c)(i) of the Regulations, "the prime metal stage, or its equivalent" for potash would generally be marketable potash which meets specifications on grain size and contains a minimum of 60% K2O (potassium oxide) equivalent. 3. Whether the portion of the Sask. potash production tax calculated on profits from the sale of purchased and resold processed potash by a potash producer in Sask. would qualify as an "eligible tax" for purposes of paragraph 20(1)(v) of the Act and revised subsection 3900(2) of the Regulations.
Position: 1. Yes. 2. Yes. 3. No. Such tax will not be deductible under paragraph 20(1)(v) or any other provision of the Act.
Reasons: 1. & 2. As per position taken in previous correspondence and supported by previous comments received from officials at NRCan. 3. As per the legislation and policy intent of legislation. The position taken was agreed to by CRA's Mining Industry Specialist, ISS, Compliance Branch.