Investment Allowance and Interest Rates

Investment Allowance

Although the Mineral Tax Act does not allow actual interest expense, it provides an allowance for return on capital invested in a mine, called an Investment Allowance.

The balance in the Cumulative Expenditures Account (CEA) at any given time is the allowable expenditures that have not been recovered, which is the same as invested capital. The Investment Allowance is a prescribed percentage of the CEA balance.

The Investment Allowance is designed to approximate the cost of the capital to the industry, regardless of the manner in which costs are funded. Equity capital is treated the same as borrowed capital.

The Investment Allowance rates in the tables are for a full year. If the fiscal year of a mine is less than a year, the rate is reduced proportionately. Please contact us for the actual rate.

Interest Rates

We charge interest (receivable rate) on amounts owing, either for monthly tax instalments or for annual tax liabilities. We credit interest (payable rate) for overpayments.

Interest rates are established quarterly under the Financial Administration Act.

Investment Allowance and Interest Rates are available for: