Canada: CRA relief for “junior” mining exploration companies, other flow-through share issuers

Canada: Relief for junior mining exploration companies

The Canada Revenue Agency (CRA) in a technical interpretation (TI 2020-0874621E5) confirmed that “junior” mining exploration companies and other flow-through share issuers can file their tax returns based on recent draft legislation for a proposed 12-month extension to spend the capital they raise via flow-through shares.


The proposed changes for tax relief—and reporting and payment deadline changes—were included in draft legislation released in December 2020. Read TaxNewsFlash

The technical interpretation addressed whether taxpayers can file their returns based on the proposed amendments that have not yet been enacted. The CRA concluded that eligible taxpayers may file their tax returns, including Form T101C, in accordance with the draft legislation, even though it has not yet been enacted. Thus, junior mining exploration companies and other flow-through share issuers can file their tax returns based on the proposed 12-month extension.


Finance in December 2020 proposed temporarily giving eligible mining companies and other flow-through issuers 36 months (instead of 24 months) to incur eligible flow-through share expenses. This extension would apply to flow-through share agreements that an eligible company entered into after February 2018 and before 2021.

The measures would also provide flow-through share issuers an additional 12 months to incur eligible renounced expenses under the look-back rule, for agreements entered into in 2019 or 2020.

The proposed tax relief would apply with regard to eligible Canadian exploration expenses that are renounced before they are incurred under the look-back rule, by deeming expenses to be incurred up to 12 months earlier than the date when they are actually incurred for agreements entered into in 2019 or 2020. There would also be consequential changes to reporting and payment deadlines to reflect the temporary extensions and tax relief.

Read a January 2021 report prepared by the KPMG member firm in Canada

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