Proposals to aid flow-through share issuers and “junior” mining exploration companies would provide more time for eligible flow-through expenses to be incurred—measures that would be allowed in response to the coronavirus (COVID-19) pandemic.
Junior mining exploration companies and other flow-through share issuers will be allowed an additional 12 months to spend capital they raise via flow-through shares.
The Department of Finance announced (10 July 2020) its proposal to extend the period that junior mining exploration companies and other issuers can incur eligible flow-through share expenses, given the challenges faced by many of these companies as a result of COVID-19.
Finance is also proposing to provide some relief for the “Part XII.6 tax” that generally applies to eligible Canadian exploration expenses that are renounced before they are incurred under the "look-back rule” and temporarily provide relief by treating these expenditures as if they were incurred up to one year earlier than the date they are actually incurred (depending on the date the flow-through share agreement was entered into). The legislative amendments to implement these proposals are expected to be released in due course.
Read a July 2020 report prepared by the KPMG member firm in Canada
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.