Overview

Ontario mining tax applies to profits from the extraction of mineral substances raised and sold by operators of Ontario mines.

Who pays mining tax

All operators of Ontario mines that produce mineral substances as defined under the Mining Tax Act must pay mining tax on profits made from producing those mineral substances.

The definition of an operator includes members of partnerships and joint ventures that operate a mine.

Mining tax rates

The mining tax rate on taxable profit is:

  • 10% for non-remote mines
  • 5% for remote mines

The tax is applied to an operator's annual profit in excess of a $500,000 annual deduction.  Associated corporations must share this deduction.

The deduction may be reduced on a pro-rated basis if the:

  • operator has a short tax year
  • operator has a part interest in the mine
  • mine is out of production for 60 or more consecutive days

Remote mines

Remote mines are mines that:

  • opened after May 7, 1996
  • are certified by the Ministry of Energy and Mines as remote mines

Mining profits from remote mines are taxed at a lower preferential tax rate than non-remote mines.

Operators with a remote mine must provide a separate taxable profit calculation for each remote mine using the Calculation of Profit Eligible for the Mining Tax Exemption for New Remote Mine and Profit from a Remote Mine form.

Operators may elect not to be taxed as a remote mine under subsection 4(4.1) of the Mining Tax Act if the:

  • mine was not treated as a remote mine in a prior tax year
  • election is made in the year the mine is certified as a remote mine

Mining tax exemption

A mining tax exemption on up to $10 million of profit during an exempt period is available for each new mine.

The exempt period is:

  • 3 years for a non-remote mine
  • 10 years for a remote mine

The mining tax exemption is also available for a major expansion of an existing non-remote mine.

How to claim the exemption

To claim the mining tax exemption, complete the required forms for each mine and submit them through ONT-TAXS online.

If you are unable to submit online, you can mail a paper copy of the completed forms to the Ministry of Finance:

Ministry of Finance
PO Box 627
33 King Street West
Oshawa ON L1H 8H5

For Non-Remote Mines:

For Remote Mines:

Register for a mining tax account

As a mine operator, you are required to register for a mining tax account with the Ministry of Finance. The definition of an operator includes members of partnerships and joint ventures that operate a mine.

Before you register

You must have an Ontario corporation number before you can register for a mining tax account.  The Ontario corporation number is issued by the Ministry of Public and Business Service Delivery and Procurement when you register a business.

Register your business to receive an Ontario corporation number.

How to register

Once you have a corporation number, you can register for a mining tax account with the Ministry of Finance.

To register for a mining tax account:

  1. Download and complete the Request for Registration form.
  2. Send it to:
    Ministry of Finance
    PO Box 627
    33 King Street West
    Oshawa ON L1H 8H5

If you have any questions, please call the Ministry of Finance at 1-866-ONT-TAXS (668-8297).

File a return

Every mine operator in Ontario needs to file an annual return. Each individual taxpayer must be clearly identified by the operator’s name and business number.

You must file your completed mining tax returns and submit all supporting documents no later than the end of the sixth month after the end of your tax year.

File your return online

The fastest and most convenient way to file your return and make payments is online.

Use ONT-TAXS online to:

  • file your return
  • make secure payments
  • access your account anytime

ONT-TAXS online is available 24 hours a day, 7 days a week and provides instant confirmation of your submission.

If you cannot file online, you can:

  • visit select ServiceOntario locations (enter “File a mining tax return”)
  • mail your return and payment to:
    Ministry of Finance
    PO Box 627
    33 King Street West
    Oshawa ON L1H 8H5

The Ministry of Finance will mail you a personalized tax return during the last month of your tax year.

Payments should be in Canadian funds and be made payable to the Minister of Finance.

If you use a cheque or money order to make a payment, your Business Number should be printed on the back of the cheque or money order.

A detailed guide is available to help you complete the return.

Pay mining tax

Any outstanding balance of tax must be paid within 2 months after the end of the taxation year.

Instalments

Instalments are due on the 25th day of each month. For example, if your taxation year starts in January, then your instalment for January is due on or before January 25, your February instalment is due on or before February 25, and so on for each month.

If your taxation year does not start on the first day of a month, your instalment is not due until the 25th day of the following month. For example, if your taxation year starts on September 15, your instalment is due on October 25.

You are not required to pay instalments for your first taxation year.

The amount of each monthly instalment payable for a taxation year is the lesser of the following 2 amounts:

  • the total tax payable by the operator for the current taxation year, divided by the number of months in that taxation year
  • the total tax payable by the operator for the taxation year that ended immediately before the current taxation year, divided by the number of months in that prior taxation year

For example:

  • If your current taxation year is a 9-month year and the tax payable for that year is $90,000, divide $90,000 by 9 for a monthly amount of $10,000.
  • If your first prior taxation year was a 12-month year and the tax payable for that year was $144,000, divide $144,000 by 12 for a monthly amount of $12,000.
  • In this case, your required monthly instalment would be $10,000, not including interest because it is the lesser of the two calculations stated above.

When calculating instalments, if the previous taxation year is less than 365 days the tax payable for the year must be grossed up by the number of complete months.

Functional currency

You may file your mining tax return using the functional currency provisions in the federal Income Tax Act.

If the Canada Revenue Agency (CRA) has accepted the functional currency reporting, you may file your return with the Ministry of Finance using the same functional currency reporting.

A CRA Functional Currency Election must be sent to the ministry to confirm the CRA has accepted your corporation to report in functional currency.

Interest and penalty

The balance of tax due must be paid within 2 months after the end of the taxation year.

Interest is calculated at the rate prescribed by the Regulation under the Mining Tax Act. It is charged daily on any unpaid amount.

If you do not submit your return:

  • you are guilty of an offence
  • you may be fined at least $200 for each day the return is late

Forms and publications

Request written interpretations

The Mining Tax Return Guide includes several examples about how the ministry makes decisions on complex tax situations.

To request a written interpretation on a specific situation you do not see on this webpage or in the Mining Tax Return Guide, send your request in writing to:

Email: Advisory Services

Mail:
Ministry of Finance
Advisory, Objections, Appeals and Services Branch
Advisory Services Section,
33 King Street West, 3rd Floor
Oshawa ON L1H 8H5

Mining tax return guide

The Mining Tax Act

This guide is provided for convenience only and additional instructions are included within the Ontario Mining Tax Return. For legislative accuracy refer to the Mining Tax Act (MTA) and Regulation 769 (Reg).

Any section or regulation references to the MTA or the Reg are noted like this example: MTA, s. 3, or Reg, s. 8.

Filing the return

ONT-TAXS online is the Ministry of Finance's secure, convenient and free online tax service for businesses and their representatives. It saves time, reduces paper and is available 24 hours a day, 7 days a week.

Getting started is fast and easy!  You can:

If you use ONT-TAXS online, you can:

  • update your account information
  • change your address
  • file a return
  • make tax payments

Every operator of a mine in Ontario must file a return. Each individual taxpayer must be clearly identified by the operator's name and identification number.

If you are an operator of either non-remote or remote mines need to complete the following in the return:

  • the taxable profit calculation
  • schedules 1 to 7

You must file your return on or before the last day of the month that ends 6 months following the end of the taxation year.

If you are an operator with more than 1 remote mine, separate schedules are required for each. Consolidate the totals for all remote mines on the "Taxable Profit Calculation" form.

If you fail to file a return or fail to include information or documents required to be delivered as part of the return, you will be subject to a penalty of 5% of the tax owing as of the day the return was due.

If you file a return containing a false statement, you are liable for a penalty of 25% on any resulting additional tax.

The MTA requires that all accounts be kept current. Operators who fail to file returns or have unpaid assessments will be referred to the ministry's Collections Branch.

If you choose to file a paper return, the ministry will mail you a personalized return.

The completed paper return should be submitted to the following address:

Ministry of Finance
33 King Street West
PO Box 620
Oshawa ON L1H 8E9

Instalments

Instalments are due on the 25th day of each month.

If a taxation year does not start on the first day of a month, the instalment is not due until the 25th day of the following month.

An operator is not required to pay instalments for the first taxation year.

The instalments payable are determined by the number of complete months starting in the current or first prior taxation year.

When calculating instalments, if the previous taxation year is less than 365 days, the tax payable for the year must be grossed up by the number of complete months.

Interest at the rate prescribed by the Reg shall be calculated and charged daily on any deficiency in the instalment account.

Balance of Tax

The balance of tax due must be paid within 2 months after the end of the taxation year.

Interest at the rate prescribed by the Reg shall be calculated and charged daily on any deficiency in the tax account.

Every operator that fails to deliver a return as and when required by the MTA or the Reg is guilty of an offence and, in addition to any penalty otherwise provided, on conviction is liable to a fine of not less than $200 for each day of default.

Mining tax exemption

A mining tax exemption (MTE) on up to $10 million of profit during an exempt period is available for each new mine.

The exempt period for a non-remote mine is 3 years, and the exempt period for a remote mine is 10 years. The MTE is also available for a major expansion of an existing non-remote mine.

If you are claiming the MTE, please complete the following forms, as required for each mine, and submit a paper copy to the address above or an electronic PDF copy using ONT-TAXS online:

  • Declaration and Allocation for the MTE for Non-Remote Mines
  • Calculation of Profit Eligible for the MTE for New Non-Remote Mine or Major Expansion of Existing Non-Remote Mine
  • Declaration and Allocation for the MTE for Remote Mines
  • Calculation of Profit Eligible for the MTE for New Remote Mine

If the subject mine has started active operation or if the mine has reopened after being closed, the operator is required to give written notice to the ministry that the mine is in active operation.

If the mine is subject to closure, inactivity or close out of mining operations, the operator must give written notice to the ministry that the mine has discontinued operations.

Remote mines

Remote mines are mines opened after May 7, 1996 that are certified by the Ministry of Energy and Mines as remote mines.

Mining profits from remote mines are taxed at a lower preferential tax rate than non-remote mines.

Due to the different tax rates applicable to each category of mines, unless an election is made under MTA, s. 4(4.1) not to be taxed as a remote mine, operators with a remote mine must provide a separate taxable profit calculation for each remote mine.

An election may be made if the mine was not treated as a remote mine in a prior taxation year, and the election is made in the year the mine is certified as a remote mine.

It may be more advantageous for an operator with a remote mine to be taxed as a non-remote mine (for example, during its start-up years when it has losses).

For more information on certification requirements for a remote mine, visit the Ministry of Energy and Mines' website.

Completing the return

The check boxes on the front of the return apply to the following situations:

  • Any operator due credit for the current taxation year may apply the credit to a future reporting period.
  • The corporation has ceased business activity in Ontario, and this is the corporation's final return.
  • The corporation is subject of an amalgamation, wind-up or transfer of assets.

The next 7 pages of the return comprise Schedules 1 to 7 and the following information will assist in the completion of the respective schedules.

Schedule 1 – Determination of Proceeds

Enter the breakdown of proceeds by quantity, commodity description, etc., from all non-remote mines on this schedule and similarly provide additional separate schedules for each remote mine as required by checking the applicable box.

Include only the proceeds in respect of each category of mine for the taxation year.

Schedule 2 – Allowance for Depreciation of Mining Assets

Enter the deduction for non-remote mines and remote mines by checking the applicable box.

Include only the cost of depreciable assets reasonably related to each category of mines during the taxation year [s. 3(12.1)].

  1. Assets used for a new mine or a major expansion of an existing mine acquired at arm's length after March 7, 1978, and before the project is completed [(s. 3(12) (c)].
    • claim an allowance as calculated under s.3(12)(b), or
    • up to 100% of the Undepreciated Capital Cost (UCC) of the assets provided that it does not exceed the profit for the taxation year from the new mine or major expansion (attach calculation)
  2. Other Mining Assets [s. 3(12) (b)]. For mining assets acquired in each taxation year after April 9, 1974, in the year or a prior year, claim up to the lesser of:
    1. 30% of the original capital cost for mining assets not previously used in mining operations (15% for other mining assets)
    2. UCC subject to Allowance

Allowance Claimed must:

  • be prorated for short taxation years [s. 3(12)(d)]
  • be the maximum allowed at basic rates and prorated for the exempt period for assets applicable to an eligible mine, if claiming the MTE [s. 3.1(3) and (5)] (attach a separate calculation); and be the maximum allowed for remote mines computed without reference to depreciation for new mines and major expansions [s.3 (8)2 and 4]

Original Capital Cost:

  • refers to the cost of acquisition net of original cost of asset disposed of and reductions of capital cost for Investment Tax Credits (ITCs) and government assistance under s. 3(14)

Cost of Additions:

  • refers to cost of acquisitions net of reductions for ITCs and government assistance [s. 3(14)]

Schedule 3 – Allowance for Depreciation of Processing and Transportation Assets

Enter the deduction for non-remote mines and remote mines by checking the applicable box.

Include only the cost of depreciable assets reasonably related to each category of mines during the taxation year [s. 3(12.1)].

Applies to assets used for processing and transporting processed mineral substances to market from the point at which processing is completed.

For assets acquired in each taxation year after April 9, 1974, claim an allowance for depreciation consisting of the lesser of:

  • 15% of the original capital cost of the processing and transportation assets
  • the UCC subject to Allowance.

The Allowance claimed must:

  • not exceed the apportioned amount calculated under s. 3(12)(e)(i) and (ii) for assets situated or used outside Canada (attach calculation)
  • not exceed the apportioned amount calculated under s. 3(21)(a) and (b) for processed mineral substance mined, or processing assets located, in Canada outside Ontario (attach calculation)
  • be prorated for a short taxation year [s. 3(12)(d)]; and be the maximum allowed at basic rates for remote mines and eligible mines and, if claiming the MTE, prorated for the exempt period for assets applicable to an eligible mine [s. 3.1(3) and (5) and 3(8)4] (attach separate calculation)

Original Capital Cost:

  • refers to the cost of acquisition net of original cost of asset disposed of and reductions of capital cost for ITCs and government assistance under s. 3(14).

Cost of Additions:

  • refers to cost of acquisitions net of reductions for ITCs and government assistance [s. 3(14)].

Schedule 4 – Exploration and Development (E and D) Expenditures Incurred in Ontario

Enter the deduction for non-remote mines and remote mines by checking the applicable box. Include only E and D expenditures incurred in respect of each category of mines during the taxation year. For remote mines, include only E and D expenditures that were incurred for the purpose of bringing an Ontario mine into production or in developing a mine after the mine comes into production, including sinking or constructing a mine shaft, mine haulage way or similar underground work designed for continuing use, and any extension thereof [s. 3(8) 1)].

Claim up to 100% of E and D incurred in Ontario not previously deducted. These expenditures must be reduced by the following:

  • eligible exploration expenses under the Ontario Mineral Exploration Program Act [s. 3(13)(d)]
  • any assistance or benefit from a government, municipality, or other public authority, including a grant, subsidy, forgivable loan, etc. [s. 3(13) (e)]; and renounced expenditures in favour of another person [s.3 (13) (f)]

Schedule 5 – Determination of Processing Allowances

Enter the deduction for non-remote mines and remote mines by checking the applicable box. Include only the cost of processing assets used for each category of mines.

The processing allowance applies to processing assets as constructed only to the extent that they remain in use after construction.

The processing allowance is suspended on processing assets that are not fully completed within eight years after the date of commencement of construction.

The processing allowance claimed on assets as constructed, but not in use must be supported by a progress report showing work done and monies expended on the assets during the taxation year [s. 9(3) and (4) of Reg. 769].

Where an operator's mining operations includes a remote mine, the cost of processing assets must be classified as either remote or non-remote based on their use.

The processing allowance for the year in respect of a remote mine is to be computed separately based on processing assets used for the remote mine (including those reclassified from non-remote mines) as if the operator had no interest in any mine other than the remote mine during the taxation year [S. 3(8)].

Schedule 6 – $500,000 Annual Exempt Profit Deduction

Each associated group of operators is eligible for an annual exempt profit deduction of $500,000.

The exempt profit deduction is prorated for short taxation years and may be reduced further where an operator has a partial interest in a mine or where the operator ceases production in the taxation year for a period exceeding 60 days.

If your mining operations include a remote mine(s), calculate separately your profits from remote and non-remote mines on page 2 and prorate the annual exempt profit deduction between the two categories of mines using the formulae in E and F.

Schedule 7 – Name(s) and Location(s) of Mines

Please enter the name and location of each of the mines (non-remote and remote) in active operation within the reporting period of the return.

Attachments Required with Return

Please complete the following attachments as required and submit to the ministry, clearly identifying the operator's name and identification number.

You can submit a paper copy of your attachments by mail or an electronic copy using ONT-TAXS online.

Include the following documents in your return:

  • a copy of the unconsolidated and consolidated financial statements and auditor's report for the taxation year
  • reconciliation schedule between the unconsolidated and consolidated financial statements
  • mine operating statement(s) for each mine with allocations between joint venture partners if applicable
  • reconciliation of net earnings per financial statement with the profit subject to mining tax
  • reconciliation of fixed assets per financial statements with assets for mining tax purposes (that is, mining assets, processing and transportation assets)
  • completed exempt profit calculation(s) (refer to page 2) for new or major expansion of non-remote mine(s) and for new remote mine(s) as required
  • schedule of processing assets showing details of:
    • the assets under construction
    • the assets used where a portion of the output is shipped to third parties for further processing to the next stage
    • total cost of assets at each stage of processing (for example, concentrating, smelting and refining)
    • the assets attributable to part interest operations
  • separate schedules showing details for regular, new and expanded and remote mines of:
    • mining expenses
    • processing expenses
    • operating or maintenance expenses re social assets in Ontario
    • administrative and overhead expenses
    • scientific/product use development research in Canada
    • charitable, educational or benevolent donations
    • transportation expenses and outlays re delivery of output to purchasers
    • reserves and deductions as prescribed by Reg 769
    • recaptured depreciation
    • management fees, service charges and similar payments
  • interest expense capitalized to mining assets and processing and transportation assets

Identification number

The identification number is a unique number assigned by the ministry to your account and noted on your return.

Reference number

This is a unique number assigned by the ministry to each tax return and accompanying schedule(s) issued to a taxpayer.

When communicating with us, you must provide this unique reference number to identify a particular return/schedule(s), in addition to quoting your identification number.

Change of Information

Please notify us of any change in your name and address.

Contact information is included at the end of this guide. When contacting us, be sure to use your identification number.

Records Retention

All records, documents and receipts pertaining to the tax return must be kept for seven years.

Learn more about records retention.

Certification

If a paper tax return is filed, it must be signed and dated by an authorized signing officer. The information contained in the tax return must be true, correct and complete.

The name, title and telephone number of the person signing the tax return must also be printed in the space provided.

In order to discuss this tax return with a third party (such as your accountant or solicitor) the ministry requires proper authorization. An Authorizing or Cancelling a Representative form must be completed and returned to the ministry.

An operator shall reimburse the ministry for all costs incurred by the ministry to examine books of account at the place where they are kept outside Canada, and the ministry may forthwith take all remedies available under this Act or at law to recover such costs.

Collection of debt under Financial Administration Act

A debt due to the Crown by an operator under section 8.1 of the Financial Administration Act in respect of a payment under this Act may be collected and enforced under the provisions of this Act as if it were tax payable by the operator for the taxation year to which the payment relates, once written notice of the debt has been sent by mail to the operator.

Voluntary Disclosure

Voluntary compliance is encouraged.

Learn more about voluntary disclosure.

Freedom of Information

Questions regarding the collection of the information contained in the return should be directed to:

Account Management and Collections Branch
Ministry of Finance
33 King Street West, PO Box 627
Oshawa ON L1H 8H5

1-866-ONT-TAXS (668-8297)

General Enquiries

Address:
Ministry of Finance
33 King Street West
PO Box 627
Oshawa ON L1H 8H5

Toll-free: 1-866-ONT-TAXS (668-8297)

TTY: 1-800-263-7776

Hours of Service:
Monday to Friday
8:30 am to 5:00 pm

Please retain this guide for future reference.