Like several Canadian law firms, Stikeman Elliott LLP holds a number of seminars on mining law throughout the PDAC convention.
Stikeman’s collection of rapid-fire, “7-minute mining” seminars on Monday morning included a short presentation around the status of flow-through shares.
A company ordinarily writes off its very own business expenses. Junior exploration information mill risky ventures which are likely years from making enough money to incur corporate tax liabilities. Flow-through shares allow companies to “renounce” their business expenses to investors, who can then claim their share of those expenses as credits on their own personal income taxes. You are able to debate their merit from a trader prospective, but they have risen vast sums for Canadian exploration companies.
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Canada’s new Liberal authorities has pledged to lessen subsidies available to the fossil fuel sector. The phase out will probably come from the fiscal year ending 2018. As the new authorities has indicated that it will continue to allow flow-through shares in the mining industry, it’s not yet clear how the new government’s policies works used. We’ll get a start looking once the new authorities unveils its first budget on March 22.
In the interim, Stikeman lawyers recommend that any organization contemplating a flow-through share offering achieve this as quickly as possible, just in case the guidelines change.
