Flow-through • Issues & Advocacy

Flow-Through Share Investment Tax Credit

The Department of Finance has received submissions from the public relating to the category of expenses eligible for the 15 per cent flow-through share investment tax credit announced in the October 2000 Economic Statement and Budget Update.

In response to submissions received, the Government intends to broaden the category of expenses falling within the definition "flow-through mining expenditure" in the following two ways:

allow, in addition to expenses incurred in determining the "existence" or "location" of a mineral resource, expenses incurred in determining the "extent" or "quality" of the mineral resource; and include, in addition to expenses that are described in subparagraph 16(d) of the Notice of Ways and Means Motion in the October Economic Statement and Budget Update, expenses that are described in paragraph (f) of the definition "Canadian exploration expense" in subsection 66.1(6) of the Income Tax Act and that are in respect of specified sampling (or in respect of digging test pits for the purpose of carrying out specified sampling).

For this purpose, it is proposed that "specified sampling" be the collecting and testing of samples in respect of a mineral resource to the extent that the weight of each sample collected does not exceed 15 tonnes; and the total weight of all samples (other than samples that are less than one tonne in weight) collected in respect of any one mineral resource in a calendar year by any person or partnership or any combination of persons and partnerships does not exceed 1,000 tonnes.

The Government intends to include these changes in the Bill that is to be introduced in the House of Commons in early 2001.

December 21, 2000

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