Canada is known for its abundant natural resources: vast oil & gas reserves, rich mineral deposits (gold, copper, silver, coal, diamonds, potash), and expansive forests. The taxation of these important resources is an area of unique complexity.
Corporations engaged in resource extraction are subject to special rules and statutes that impose additional taxes and complexity (over and above the usual tax rules that apply to all businesses).
For example, special income tax rules apply for each phase of oil & gas production and mining: exploration, development, production, and reclamation. In addition, under Canada’s constitution, each province owns the resources within its provincial borders. Each province has therefore imposed its own separate taxes (or similar levies) on resource extraction within the province. Such provincial resource taxes are accounted for in the income tax context but the interaction among all these taxes can give rise to special challenges and complexity.
Canada is also well known for its capital markets that finance resource acquisitions and exploration around the world. In addition, many Canadian-based (and foreign-based) companies expand to conduct foreign mining operations from (and through) Canada. In this respect, Canada’s comprehensive “foreign affiliate” tax system adds even further layers of tax complexity for companies engaged in these industries.
The lawyers in our Resource group are widely recognized as leading experts having specialized knowledge in this field, gained through decades of experience. We act for resource companies at all levels – from some of the world’s largest public corporations (majors) to smaller companies engaged solely in exploration (juniors). Our specialized knowledge, expertise, and experience allows us to quickly team with internal tax and finance officers, and other professionals, to efficiently solve complex problems, reach timely conclusions, and manage all tax aspects of industry transactions. The latter include IPOs, takeovers, asset acquisitions, joint ventures, partnerships, financings, metal-purchase transactions, internal restructurings, and expansions both into and out of Canada.
Our lawyers have experience in dealing with all levels of government involved in the taxation of resources; having obtained resource tax rulings, managed resource tax audits, and appealed all manner of resource tax disputes in all levels of court.