Notes
1 – Canadian Production and Processing Revenues – Oil and Gas:
Include the amounts, net of Crown charges, pursuant to Regulations 1204(1) (b)(i), (v) and (vi). In general terms, this includes revenues from the production and/or processing in Canada of petroleum, natural gas, related hydrocarbons, sulphur and heavy crude oil, as well as Canadian field processing.
2 – Canadian Production and Processing Revenues - Minerals:
Include the amounts, net of Crown charges, pursuant to Regulations 1204(1) (b)(ii) and (iii). In general terms, this includes revenues from the production and/or processing in Canada of:
- ore, other than iron ore or tar sands ore, from mineral resources in Canada to any stage that is not beyond the prime metal stage or its equivalent;
- iron ore from mineral resources in Canada to any stage that is not beyond the pellet stage or its equivalent;
- tar sands ore from mineral resources in Canada to any stage that is not beyond the crude oil state or equivalent.
3 – Production Royalties:
In general, this term means a rental or royalty included in income which is computed by reference to the amount or value of petroleum, natural gas, or related hydrocarbons in respect of which the recipient has a Crown royalty. Refer to the definition of production royalty in Regulation 1206(1).
Although Canadian mining royalties (other than those relating to mining of bituminous or oil sands) are not included in the definition of production royalty, they should be treated as production royalties for purposes of this form.
Petroleum Royalties:
For purposes of this form, resources other than those included as production royalties and specified royalties are considered to be petroleum royalties.
4 – Specified Royalties:
Where the taxpayer was in receipt of a specified royalty and that amount has been included in fields 050, 051, 700, and 701, one half of the receipt is deducted in fields 250, 251, 880 and 881 in the computation of adjusted resource profits pursuant to Regulation 1210(2). Where the taxpayer has incurred a specified royalty, the full amount shall be deducted in fields 120, 121, 770 and 771 in computing adjusted resource profits. Refer to the definition of a specified royalty in Regulation 1206(1).
5 – Hedging Gain (Loss) in Respect of a Canadian Production:
Where a taxpayer participated in a hedging transaction in respect of its own production, the hedging gain or loss from that transaction (including the related foreign exchange gain or loss) that corresponds to the production during that period shall be considered income from production for the purposes of computing resource profits.
6 – Adjusted Resource Profits of a Partnership:
Where the taxpayer was a member of a partnership, complete the Resource Allowance and Depletion Schedule (partnership) in respect of each partnership interest. Where the taxpayer was a member of a partnership other than an exempt partnership, the taxpayer’s share of adjusted resource profits may be a positive or negative amount.
Where the taxpayer was a member of an exempt partnership, as defined in Regulation 1206(1), and where the adjusted resource profits were negative, that negative amount has to be adjusted for a fiscal period that begins before 2000 pursuant to Regulation 1210(4), and entered in fields 902 and 210.
7 – Non Arm’s Length Transactions:
After March 6, 1996, a taxpayer’s resource profits are reduced pursuant to Regulation 1204(1.1)(b) by the difference between:
- the fair market value of; and
- the amounts actually charged
for the use of property, or services provided to the taxpayer by a person or partnership with whom the taxpayer was not dealing at arm’s length.
8 – Resource Loss:
A taxpayer’s prescribed resource loss shall be included in income pursuant to paragraph 12(1)(z.5) of the federal Income Tax Act.
9 – Negative Earned Depletion Base:
Refer to Regulation 1210(1), item C of the formula for computation of the negative earned depletion base.
Refer to Regulation 1205(1) for the meaning of earned depletion base.
10 – Resource Allowance:
The amount from field 322 is to be entered in field 420, and the amount from field 321, if positive, is to be entered in field 421.
The positive amount in field 421 is a notional resource allowance which is attributed to the successor properties. This amount is to be added back in field 572 in computing the resource profits in field 592.
See also