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ARTICLE · 23 DECEMBER 2020

Finance Releases Draft Legislation For Issuers Of Flow-Through Shares

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On December 16, 2020, the Department of Finance (Canada) released draft legislative proposals to implement certain proposals announced on July 10, 2020.

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Tera Li Parizeau
Tera Li Parizeau
Christopher Norton
Christopher Norton
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On December 16, 2020, the Department of Finance (Canada) released draft legislative proposals to implement certain proposals announced on July 10, 2020 (the July 10 Proposals) to protect jobs and safe operations of junior mining exploration and other flow-through share issuers (FT Share Issuers) whose operations may have been impacted by COVID-19.

The proposals relate generally to two rules in the Income Tax Act (Canada) which apply to the time period during which a FT Share Issuer must incur and renounce eligible expenditures - the general rule and the "look-back rule." These proposals will have no application to FT Share Issuers who enter into flow-through share subscription agreements with investors after 2020. In addition, these relieving rules may have no application depending on the particular contractual terms and conditions in any flow-through share subscription agreement which is entered into between an investor and a FT Share Issuer.

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