Favourable Tax Measures Announced For Mining Investors

On March 1, 2015, the federal government announced two new tax measures favourable to investors in junior mining exploration companies in Canada in an effort to stabilize and strengthen the Canadian mining industry.

First, the government has extended the 15% Mineral Exploration Tax Credit for investors in flow-through shares for an additional year, until March 31, 2016. Flow-through shares are an instrument to encourage investment in Canadian mining, because they permit resource companies to renounce or "flow through" unused tax expenses associated with their Canadian exploration activities to investors who can deduct the expenses in calculating their own taxable income. The Mineral Exploration Tax Credit provides an additional benefit to individual investors in mining flow-through shares, equal to 15% of the specified mineral exploration expenses incurred in Canada that were renounced by the resource companies in favour of their flow-through share investors. With