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ARTICLE · 23 DECEMBER 2020

Finance Releases Draft Legislation To Enact Flow-Through Share Amendments

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On December 16, 2020, the Department of Finance released draft legislative proposals to extend by 12 months the deadline for corporations to expend capital raised through certain flow-through share issuances.

CanadaCorporate/Commercial Law
Michael Friedman
Michael Friedman
Michael Hassar
Michael Hassar
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On December 16, 2020, the Department of Finance released draft legislative proposals to extend by 12 months the deadline for corporations to expend capital raised through certain flow-through share issuances.

The Federal Government had previously announced its intention to extend the deadlines on July 10, 2020.1

The intention behind the new legislative amendments is to allow flow-through share issuers additional time to incur eligible expenses without incurring additional tax costs.

Overview

Flow-through shares are frequently issued by mining companies that have ongoing exploration expenditures that exceed their current revenues. The flow-through share regime generally allows mining companies to renounce (i.e., flow-through) certain expenses to shareholders who can personally deduct such amounts when calculating their personal income tax liabilities.

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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