Canada proposes resource-expense treatment for helium projects

Three expense pools

The proposal would treat helium expenditure consistently with comparable petroleum and natural-gas expenditure. Helium exploration expenses would qualify as Canadian exploration expense (CEE), development expenses as Canadian development expense (CDE), and the cost of acquiring a helium resource property as Canadian oil and gas property expense (COGPE). The budget describes the existing deduction rates as 100% for CEE, 30% on a declining-balance basis for CDE and 10% for COGPE.^[1]

The proposal applies from Budget Day

The measure is proposed for expenses incurred on or after 5 November 2026. It is not enacted law. The tax-measures annex contains proposed measures and Notices of Ways and Means Motions, while the reviewed helium section establishes the intended classification and application date rather than a completed legislative amendment. Project models should therefore keep the proposal separate from current enacted deductions until the relevant bill receives royal assent.^[1][2]

Timing depends on the expense category

The classification matters because exploration, development and property-acquisition costs enter different pools. The annex describes seismic and other geophysical exploration and abandoned or non-producing exploratory wells as examples of CEE, development drilling and specified injection, monitoring or waste-disposal wells as examples of CDE, and acquisition of qualifying Canadian resource properties as COGPE. It does not set out a helium-specific boundary rule for mixed, preliminary or shared project costs.^[1]

Separate the linked mega-deduction proposal

Budget 2026 also refers to the separately proposed Productivity Mega Deduction, which would raise the CDE deduction rate from 30% to 100%. That related proposal is not part of the helium classification alone and should not be treated as enacted through this announcement. Groups funding Canadian helium projects should inventory expenditure by activity and date, identify resource-property acquisitions separately and model both the current-law and proposed outcomes.^[1]

The sources reviewed do not create a helium-specific return, election or payment deadline. Detailed legislation and Canada Revenue Agency guidance remain necessary for difficult classification questions and implementation, but those gaps do not prevent focused reporting of the verified Budget Day proposal.^[1]