Notional resource allowance, s. 36 (3) of the Act
 7. (1) In this section, “Canadian exploration and development overhead expense” means an amount that is a Canadian exploration and development overhead expense for the purposes of Part XII of the Federal regulations; “Crown entity” means, (a) Her Majesty in right of Canada or of a province, (b) an agent of Her Majesty in right of Canada or of a province, or (c) a corporation, commission or association that is controlled by Her Majesty in right of Canada or of a province or by an agent of Her Majesty in right of Canada or of a province; “exempt rental or royalty” means, (a) an amount paid or payable to or received or receivable by the Crown in right of Canada for the use and benefit of a band or bands as defined in the Indian Act (Canada), (b) an amount paid or payable to or received or receivable by a Crown entity if the amount, (i) may reasonably be regarded to be in respect of a rental for property, (A) that is described in subparagraph (b) (ii) of the definition of “Canadian resource property” in subsection 66 (15) of the Federal Act, or (B) that is in Canada and is not depreciable property if the principal value of the property depends on its mineral resource content, and (ii) is paid or payable or received or receivable before the commencement of production of minerals in reasonable commercial quantities from the mineral resource referred to in subclause (i), (c) an amount paid or payable to or received or receivable by a Crown entity if the amount may reasonably be regarded to be in respect of a right, licence or privilege to store fossil fuel underground in Canada, (d) an amount equal to the lesser of, (i) an amount, (A) that was paid or payable to or received or receivable by a Crown entity as a rental for property or a portion of a property that is a right, licence or privilege to explore for, drill for or take fossil fuel in Canada, (B) that was payable or receivable in a taxation year in which there was no taking of fossil fuel from the property or portion of the property to which the rental relates, and (ii) an amount equal to $2.50 multiplied by the number of hectares of the property or portion of the property to which the amount referred to in subclause (i) relates; “fossil fuel” means petroleum, natural gas or a related hydrocarbon; “production royalty” means an amount in respect of a particular Canadian resource property that is included in computing a corporation’s income as a rental or royalty determined by reference to the amount or value of fossil fuel produced from a Canadian fossil fuel source but only if, (a) the corporation has a Crown royalty in respect of, (i) the production of the fossil fuel from the Canadian fossil fuel source, or (ii) the ownership of property to which the production relates and the Crown royalty is computed by reference to an amount of production from the Canadian fossil fuel source, and it is reasonable to consider that the corporation would have had the Crown royalty if the corporation’s only source of income had been the rental or royalty in respect of the particular property, or (b) the corporation would have a Crown royalty described in clause (a) but for an exemption or allowance, other than a rate of nil, that is provided under a statute by a Crown entity; “specified royalty” means a royalty, (a) the cost of which is a Canadian development expense, (b) that was created after December 5, 1996 as part of a transaction or event or series of transactions or events as a consequence of which depreciable property was acquired at a capital cost that was less than the amount that would have been the fair market value of the depreciable property determined without regard to the royalty, and (c) that was not created pursuant to an agreement in writing made on or before December 5, 1996.  O. Reg. 37/09, s. 7 (1). (2) For the purposes of the definition of “production royalty” in subsection (1), each of the following amounts is a Crown royalty of a corporation for a taxation year in respect of the production of fossil fuel from a Canadian fossil fuel source or in respect of the ownership of property to which such production relates: 1. An amount that, if the Corporations Tax Act were to apply for the year, would be added in computing the corporation’s income for the year in respect of the production or ownership for the purposes of that Act by reason of subsection 11.0.1 (3) of that Act less all reimbursements, contributions and allowances referred to in subsection 26 (6) of that Act that are received or receivable by the corporation in respect of that amount. 2. An amount in respect of the production or ownership that is an exempt rental or royalty for the year less all reimbursements, contributions and allowances referred to in subsection 26 (6) of the Corporations Tax Act that are received or receivable by the corporation in respect of that amount. 3. An amount that, if the Corporations Tax Act were to apply for the year, would not be deductible in computing the corporation’s income for the year in respect of the production or ownership for the purposes of that Act by reason of subsection 11.0.1 (5) of that Act less all reimbursements, contributions and allowances referred to in subsection 26 (6) of that Act that are received or receivable by the corporation in respect of that amount. 4. An amount by which the corporation’s proceeds of disposition of fossil fuel would be increased under subsection 108.4 (1) of Regulation 183 of the Revised Regulations of Ontario, 1990 (General), made under the Corporations Tax Act, if that regulation and subsection 26 (4.1) of that Act were to apply for the year. 5. An amount by which the corporation’s cost of acquisition of the fossil fuel would be reduced under subsection 108.4 (4) of Regulation 183 of the Revised Regulations of Ontario, 1990 (General), made under the Corporations Tax Act, if that regulation and subsection 26 (4.1) of that Act were to apply for the year.  O. Reg. 37/09, s. 7 (2). (3) For the purposes of subsection 36 (3) of the Act, a corporation’s notional resource allowance for a taxation year is the amount, if any, calculated using the formula, [0.25 × (A – B)] – C in which, “A” is the amount of the corporation’s adjusted resource profits for the year, as determined under subsection (4), “B” is the sum of all amounts each of which is a Canadian exploration and development overhead expense made or incurred by the corporation in the year, other than an amount that is a Canadian exploration and development overhead expense because it is deemed to be a Canadian exploration expense or a Canadian development expense under subsection 21 (2) or (4) of the Federal Act, and “C” is the amount, if any, by which “D” exceeds “E” where, “D” is the sum of all amounts determined under paragraphs 1205 (1) (e) to (k) of the Federal regulations in computing the corporation’s earned depletion base at the end of the year, as determined under section 1205 of the Federal regulations, other than any portion of that sum determined under paragraph 1205 (1) (i) of the Federal regulations as a consequence of a disposition in the year of property in circumstances in which subsection 1202 (2) of the Federal regulations applies, and “E” is the amount equal to 33 1/3 per cent of the sum of all amounts determined under paragraphs 1205 (1) (a) to (d.2) of the Federal regulations in computing the corporation’s earned depletion base at the end of the year, as determined under section 1205 of the Federal regulations. O. Reg. 37/09, s. 7 (3). (4) A corporation’s adjusted resource profits for a taxation year for the purposes of subsection (3) is the amount, which may be a positive or negative amount, calculated using the formula, F + G – H in which, “F” is the amount of the corporation’s resource profits for the year, as determined under subsection (5), “G” is the sum of all amounts each of which is the corporation’s share for the year of the adjusted resource profits of a partnership, as determined under subsections (6) and (7), for a fiscal period of the partnership ending in the year, and “H” is the amount, if any, by which the sum of “I” and “J” exceeds the amount of “K” where, “I” is the sum of all amounts each of which is an amount, other than a production royalty or specified royalty included in the corporation’s gross resource profits for the year under subsection 1204 (1) of the Federal regulations as a rental or royalty computed by reference to the amount or value of fossil fuel produced from a Canadian fossil fuel source, “J” is 50 per cent of all amounts in respect of specified royalties that are included in the corporation’s gross resource profits for the year under subsection 1204 (1) of the Federal regulations, and “K” is the sum of all outlays and expenses that were made or incurred in respect of the amounts included in the calculation of “I”, to the extent the outlays and expenses were deducted in computing the corporation’s gross resource profits for the year under subsection 1204 (1) of the Federal regulations. O. Reg. 37/09, s. 7 (4). (5) The amount of a corporation’s resource profits for a taxation year for the purposes of this section is the amount that would be determined in respect of the corporation for the year under subsection 1204 (1.1) of the Federal regulations, (a) if, in determining the corporation’s gross resource profits for the year under subsection 1204 (1) of the Federal regulations, (i) no amount were included under paragraph 1204 (1) (a) of the Federal regulations, and (ii) no amount were included in the corporation’s income for the year from the processing in Canada of ore described in clause 1204 (1) (b) (iv) (A), (B) or (C) of the Federal regulations; (b) if references to a resource activity in subparagraph 1204 (1.1) (a) (iv), subclause 1204 (1.1) (a) (v) (A) (I) and clause 1204 (1.1) (a) (v) (B) of the Federal regulations were read as references to a resource activity other than an activity described in paragraph (d) of the definition of “resource activity” in subsection 1206 (1) of the Federal regulations; (c) if the corporation’s gross resource profits for the year under subsection 1204 (1) of the Federal regulations and its resource profits for the year under subsection 1204 (1.1) of the Federal regulations were determined on the basis that, (i) no amount would be deductible in computing the corporation’s income for the year in respect of a rental or royalty paid or payable by the corporation and computed by reference to the amount or value of fossil fuel produced from a Canadian fossil fuel source, other than, (A) an amount in respect of an exempt rental or royalty, (B) an amount that is a production royalty, or (C) an amount paid or payable in respect of a specified royalty, (ii) no amount would be deductible in computing the corporation’s income for the year under paragraph 20 (1) (e), (e.1), (e.2) or (f) of the Federal Act or as, on account of or in lieu of, interest in respect of a debt owed by the corporation, (iii) no amount would be deductible in computing the corporation’s income under any of sections 65 to 66.7 of the Federal Act, subsection 17 (2) or (6) of the Income Tax Application Rules or section 29 of those Rules, and (iv) section 11.0.1, other than subsection 11.0.1 (4), and subsections 26 (4.1), (6) and (7) and 31 (1.2) of the Corporations Tax Act would apply in computing the corporation’s income for the year even though those provisions would not otherwise apply for the year; (d) if the corporation’s share of the income or loss of a partnership from any source were deemed to be nil; and (e) if each of subsections 1204 (1) and (1.1) of the Federal regulations were deemed to allow the computation of a negative amount if the sum of the amounts deducted under the subsection exceeded the sum of the amounts added under that subsection.  O. Reg. 37/09, s. 7 (5). (6) For the purposes of the definition of “G” in subsection (4), a corporation’s share for a taxation year of a particular partnership’s adjusted resource profits for a fiscal period ending in the year is determined as follows: 1. If the corporation does not hold a direct interest in the particular partnership at the end of the fiscal period, the corporation’s share of the partnership’s adjusted resource profits is deemed to be nil. 2. If the corporation holds a direct interest in the particular partnership at the end of the fiscal period, the corporation’s share of the partnership’s adjusted resource profits is the amount that may reasonably be considered to represent the corporation’s share of the partnership’s adjusted resource profits for the fiscal period, determined under subsection (4) as if, i. the particular partnership and every other partnership in which the corporation has an indirect interest through the particular partnership were corporations, each having a taxation year that is the same as its fiscal period, ii. subclause (5) (c) (iv) applied to the particular partnership, but only if the corporation is a majority interest partner in that partnership at the end of the fiscal period, iii. subclause (5) (c) (iv) applied to another partnership in which the corporation held an indirect interest through the particular partnership, but only if the corporation is a majority interest partner in the particular partnership at the end of the fiscal period and is a majority interest partner in the other partnership at any time in the fiscal period, and iv. this section were read without reference to subsection (7).  O. Reg. 37/09, s. 7 (6). (7) Despite subsection (6), a corporation’s share for a taxation year of the adjusted resource profits of a partnership for a fiscal period of the partnership ending in the year is deemed to be nil unless the corporation holds a direct interest in and is a majority interest partner of the partnership at the end of the fiscal period and does not have, through that partnership, an indirect interest in another partnership other than, (a) a partnership of which the corporation is a majority interest partner at any time in the fiscal period; or (b) a partnership that carries on no resource activity as defined in subsection 1204 (6) of the Federal regulations.  O. Reg. 37/09, s. 7 (7). (8) For greater certainty, nothing in subparagraph 2 i of subsection (6) affects the nature or extent of any partner’s interest in any partnership for the purposes of the definition of “G” in subsection (4) or for the purposes of clause (5) (d).  O. Reg. 37/09, s. 7 (8). Part III   corporate Minimum Tax