Fiscal Incentives: Updating Canadian Exploration Expenses

Working with Canada Revenue Agency (CRA)

Over the years, some PDAC members have alleged that there have been inconsistent rulings on what constitutes a Canadian Exploration Expense (CEE). This anecdotal feedback led PDAC to undertake a survey of its members, and to conduct a series of interviews with CFOs from member companies, to better understand what the concerns were.

This research informed PDAC advocacy to expand the scope of what is considered a CEE, to include certain expenses related to Aboriginal engagement and consultation, and certain costs related to environmental studies.

In addition, PDAC is calling for CRA to identify a clear bright-line test to establish what constitutes a CEE vs. a Canadian Development Expense (CDE). PDAC is proposing that the completion of a pre-feasibility study constitute the dividing line between CEE vs. CDE. More information on all of this work is captured in our October 2015 proposal to Finance Canada, available on this page.