ARTICLE · 14 FEBRUARY 2018

Could Flow-Through Shares Be Right For Me?

Crowe Soberman LLP

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Every mining, oil and gas, and renewable energy company in Canada has been faced with the same dilemma during the early stages of their existence: How can they raise enough money from investors and entice them to purchase their stock without an established revenue stream?

CanadaTax

John MacFarlane

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Every mining, oil and gas, and renewable energy company in Canada has been faced with the same dilemma during the early stages of their existence: How can they raise enough money from investors and entice them to purchase their stock without an established revenue stream?

The Canadian Government offers certain tax incentives and benefits for investors of these resource companies, specifically to encourage people to invest. These incentives and benefits are derived from what are commonly referred to as flow-through shares (FTSs).

What is a flow-through share?

A FTS is a share which permits a resource company to pass along its development and exploration expenses to an investor. Investors are then able to deduct these expenses from their personal income tax returns.

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