Mine closing costs

CIM Bulletin, Vol. 75, No. 842, 1982
ROBERT B. PARSONS, Partner Price Waterhouse, Toronto
Abstract Several recent cases indicate that the Courts may be leaning toward a more favourable treatment of mine closing and related costs. In this article, we look at two recent cases, Burnco Industries Ltd. and Nomad Sand & Gravel Ltd. The former was heard before the Federal Court - Trial Division and the latter before the Tax Review Board.It appears that in certain situations mining companies may now be able to sustain current deductibility of estimated mine closing costs during the productive years of the mine, rather than waiting until either the date on which mining ceases or the reclamation and similar activities commence. This would be of great benefit to the mining industry, as waiting until the bitter end often means that there are no revenues available against which the expenses may be offset and, hence, no tax relief.
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