Canada proposes tax changes for ammonite producers

The federal government of Canada has announced proposed changes to the income-tax treatment of producers of ammonite gemstones.

The changes, which were proposed by Natural Resources Minister Anne McClellan and Finance Minister Paul Martin, are designed to bolster exploration and development of ammonite gemstone deposits in the country.

As a result of the changes, ammonites (the fossils of extinct shellfish found in certain sedimentary rocks) will be treated as minerals, and producers will be afforded the same income-tax considerations as producers of other gemstones. The gemstones cut from these fossils are iridescent in red or green and are used in the manufacture of jewelry.

The changes will allow producers to claim accelerated depreciation and gain access to flow-through shares.

Ammonite was internationally recognized as a gemstone in 1981. Canada’s largest producer of the stone is Alberta, which lists ammonite as its official gemstone. Production there began in 1966.

The proposed changes would take effect after 1996.