44Capital costs incurred before the production year—project sales gas produced first

44  Capital costs incurred before the production year—project sales gas produced first  (1) For the purposes of step 9 of the residual pricing method, this section applies to an included capital cost for the taxpayer if:  (a) the included capital cost is incurred before the production year; and  (b) the MPC production year for the operation, if any, is not before the production year; and  (c) the capital cost is not included under subsection 35(10).  (2) The included capital cost:  (a) is augmented for the number of calendar years between the start date for the included capital cost and the production date; and  (b) is taken to be incurred in the production year. Note 1: The start date for the included capital cost may have been affected: (a) by subsection 43(2), if that subsection applied to the cost; or (b) by subsection 41(2), if subsection 43(2) did not apply to the cost and an election was made under section 54.  The amount of the cost may also have been affected by subsection 43(2), if that subsection applied to the cost. Note 2: The steps of the method work sequentially. So, (assuming this subsection applies to the cost) the next applicable step or provision that refers to the cost will be referring to: (a) the cost as augmented under this subsection; and (b) a start date for the cost of 1 January in the production year.