Definitions
 1. (1) In this Regulation,  “depreciable assets” means buildings, plant, machinery and equipment; “diamond royalty valuer” means a person acting on the Minister’s behalf for the purpose of ascertaining the value of diamonds produced as part of the output of a diamond mine; “exploration cost” means an expense incurred for the purposes of determining the existence, location, extent, quality or economic potential of a diamond or diamond-bearing deposit in Ontario, but does not include an expense incurred for the purposes of bringing a diamond mine into production; “impact benefit agreement” means an agreement under which an operator of a diamond mine located on royalty land has agreed to provide a benefit to an aboriginal community or municipality located in Ontario for the purpose of ensuring that the aboriginal community or municipality benefits from the diamond mine; “mining property” means, in respect of a diamond mine, (a)  a mining claim or a parcel of land subject to a lease or patent, within the boundaries of which the diamond mine or part of the diamond mine is situated, or (b)  a group of contiguous mining claims, whether or not subject to a lease or patent, within the boundaries of which the diamond mine or part of the diamond mine is situated, (i)  that are the property of the same owner, or (ii)  if the diamond mine is operated as a joint venture, that are owned exclusively by the members of the joint venture or parties related to the members of the joint venture, regardless of the degree of ownership of each mining claim, lease or patent; “municipality” has the meaning assigned by subsection 1 (1) of the Municipal Act, 2001 and includes any board, commission or other local authority that is a municipality for the purposes of the Municipal Affairs Act; “processing” means, (a)  crushing, grinding, floatation, beneficiation, concentrating, milling, leaching, recrystallization or refining performed to recover diamonds from ore or from a diamond-bearing substance, and (b)  cleaning and sorting that output; “processing assets” means tailings disposal facilities and depreciable assets located in Ontario that are used directly and exclusively in processing; “qualifying expenditure” means an expenditure incurred by an operator of a diamond mine to provide a benefit, pursuant to an impact benefit agreement, to an aboriginal community or municipality located in Ontario, to the extent the expenditure is not otherwise deductible in determining the operator’s net value of the output of the mine; “qualifying donation” means a donation made to a recipient resident in Ontario by an operator of a diamond mine, (a)  that is not a qualifying expenditure, (b)  that is made for charitable, educational or benevolent purposes, and (c)  that is reasonably related to the mine; “qualifying environmental trust” means a qualifying environmental trust as defined in subsection 248 (1) of the Income Tax Act (Canada) that is established in respect of the mining property of a diamond mine; “related” means, with respect to two or more persons, that the persons are, (a)  related persons within the meaning of section 251 of the Income Tax Act (Canada), read without reference to paragraph 251 (5) (b), (b)  associated corporations within the meaning of section 256 of that Act, read without reference to subsection 256 (1.4), (c)  affiliated persons within the meaning of section 251.1 of that Act, or (d)  operators of the same diamond mine; “royalty land” means land in Ontario in respect of which a royalty may be payable under section 154.1 of the Act; “satisfactory evidence” means, with respect to a sale of diamonds, satisfactory evidence with respect to the diamonds sold and the circumstances of the sale, including, (a)  the number and quality of diamonds sold, (b)  the amount of the proceeds from the sale, (c)  the date of the sale, and (d)  whether the operator and the person to whom the diamonds are sold are related or not; “undeducted balance” means, (a)  with respect to depreciable assets, the amount of the original cost of the depreciable assets, (i)  minus the sum of all depreciation allowances claimed in respect of those assets for previous fiscal years and the amount of all reductions, if any, required to be made for previous fiscal years under clause 7 (5) (a) or (8) (d), paragraph 5 of subsection (9) or subsection 7 (10), and (ii)  plus all amounts, if any, required to be added under subsection 7 (10) for previous fiscal years, (b)  with respect to a development allowance, the amount of the costs eligible for a development allowance under paragraph 8 of subsection 7 (1), (i)  minus the sum of all development allowances claimed for previous fiscal years and all reductions, if any, required to be made for previous fiscal years under paragraph 3 or 4 of subsection 7 (9) or subsection 7 (10), and (ii)  plus all amounts, if any, required to be added under subsection 7 (10) for previous fiscal years, (c)  with respect to a qualifying environmental trust contribution allowance, the amount, if any, by which the total of all contributions made to the qualifying environmental trust exceeds the total of all qualifying environmental trust contribution allowances claimed for previous fiscal years, (d)  with respect to qualifying donations and qualifying expenditures of an operator, the amount, if any, by which the sum of all qualifying donations made by the operator and all qualifying expenditures incurred by the operator exceeds the total of, (i)  the sum of all amounts, each of which is the portion determined under paragraph 1 of subsection 7 (2) of an amount claimed by the operator in respect of its Ontario community and economic development incentive under subsection 7 (2) for a previous fiscal year, and (ii)  the total of all amounts each of which is the value, at the time a qualifying donation is made or a qualifying expenditure is incurred, of any property, service, compensation, use or other benefit that the operator, or a person or partnership who does not deal at arm’s length with the operator, has received, obtained or enjoyed, or is entitled, either immediately or in the future or contingently, to receive, obtain, or enjoy, (A)  that is in consideration for the qualifying donation or qualifying expenditure, (B)  that is in gratitude for the qualifying donation or qualifying expenditure, or (C)  that is in any other way related to the qualifying donation or qualifying expenditure.  O. Reg. 323/07, s. 1 (1). (2) For the purposes of this Regulation, the market value of diamonds produced as part of the output of a diamond mine shall be determined in accordance with the following rules: 1.  If the Minister and the operator agree on a value for the diamonds, the market value is that agreed value. 2.  If the Minister and the operator do not agree on a value for the diamonds, the market value is the maximum amount that could be realized from the sale of the diamonds on the open market after they are sorted into market assortments. 3.  The market value shall be based on the value of the diamonds before they are cut and polished. 4.  The market value shall be determined as follows for the following purposes: i.  If the market value is determined for the purposes of the definition of “B” in subsection 6 (1), the market value shall be determined as of the end of the fiscal year. ii.  If the market value is determined for the purposes of the definition of “C” in subsection 6 (1), the market value shall be determined as of the beginning of the fiscal year. iii.  If the market value is calculated for the purposes of sub-subparagraph 8 ii A of subsection 7 (1), the market value shall be determined as of the date of the sale, transfer or removal of the diamonds, as applicable. iv.  If the market value is calculated for the purposes of sub-subparagraph 8 ii B of subsection 7 (1), the market value shall be determined as of the date of commencement of production. v.  If the market value is calculated for any other purpose, the market value shall be determined as of the date of the last valuation by a diamond royalty valuer.  O. Reg. 323/07, s. 1 (2).