On March 28, 2024, the Department of Finance Canada announced a one-year extension to the 15% Mineral Exploration Tax Credit (“METC”) available to investors in flow-through shares. The extension means that the METC will be effective until March 31, 2025.
This announcement came at a time when uncertainty loomed over the industry and some stakeholders feared that the government would not renew the METC.
Over time, this tax credit has become a key component of flow-through share financings. It is intended to enhance the tax deductions already available to flow-through share holders and ultimately help companies raise capital for mineral exploration.
The METC was last renewed in 2019 for a five-year period, indicating the government’s long-term commitment to the sector at that time.
And while this renewal is welcome news for exploration companies, it should be noted that the shorter one-year horizon of the extension does not provide the same assurance regarding the incentive’s future.
It is possible that this one-year renewal reflects the government’s intention to promote the new 30% Critical Mineral Exploration Tax Credit (“CMETC”) instead, on which more information can be found here: Federal Budget 2022: Good News for Mining Exploration Companies!
In closing, it is important to note that the one-year extension to the 15% METC will not affect the period during which the 30% CMETC is available for critical mineral exploration, which will end on March 31, 2027, and is subject to renewal.
If you were planning on financing non-critical mineral exploration, you may want to complete this transaction in the coming year in order to benefit from the 15% METC.
Our team of professionals specializing in securities, mining law and taxation is available to answer any questions you may have concerning this new measure and to guide you in arranging a successful flow-through financing.
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Josianne Beaudry is a partner and member of the Business law group. Her practice is primarily focused on securities law, investment funds and mining law. She also advises financial sector participants on the application of regulations relating to securities and corporate governance.
Ms. Beaudry assists clients carrying out public and private financings, corporate reorganizations, as well as mergers and acquisitions. She also helps publicly traded companies maintain their reporting issuer status.
Ms. Beaudry also advises investment fund managers, dealers, and portfolio managers in matters related to their registration and activities.
She assists mining companies in every stage of their development.
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René Branchaud, partner and leader of the Business Law Group, practises in the fields of securities, mergers and acquisitions, as well as corporate law. With more than thirty years’ experience, he advises companies on matters such as incorporation and organization, the drafting of shareholder agreements, private placements, public issues, going public, dispositions, and takeovers.
His services are in demand with European entrepreneurs and investors, primarily in France, wishing to set up companies in Canada. René has acquired extensive experience in this area and the specific challenges facing companies moving to Québec. He advises businesses in all sectors of economic activity on the legal and regulatory aspects of doing business in Québec and Canada, identifying the business services they will need and assembling multidisciplinary teams to facilitate their efforts. Over the years, he has built a strong business network (bankers, financial advisers, tax experts, and accountants) that he calls upon when carrying out the mandates entrusted to him.
René acts as secretary of several publicly traded companies; he also serves on corporate governance committees and special committees established to address specific issues (mergers, takeovers).
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Éric Gélinas is a member of the Business law group in Lavery’s Montréal office. He assists businesses with complex tax reorganizations and the tax aspects of national and cross-border mergers and acquisitions. He is also interested in the tax aspects of estate planning and inter-generational transfers of businesses.
Mr. Gélinas’s main areas of expertise are corporate tax planning, taxation of corporation reorganizations, and the tax aspects of mergers and acquisitions.
Mr. Gélinas is also a tenured professor in the tax department of the École de gestion de l’Université de Sherbrooke, where he teaches the taxation of corporate reorganization in the master’s (M. Fisc.) program. He is frequently called upon to speak and write articles on the subject of taxation.
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Mylène Vallières is a senior associate and member of the Business law group. Her practice is primarily focused on securities law and mining law. She also assists clients carrying out public and private financings, corporate reorganizations, as well as mergers and acquisitions. She also served as assistant to the chief negotiator for Québec in the negotiation of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union.
Over the years, Mylène has honed her expertise in fundamental concepts and issues related to environmental, social and corporate governance factors, and developed a keen interest in advancing these issues, driving her to obtain an Osgoode Certificate in ESG, Climate Risk and the Law from Osgoode Professional Development.
Ms. Vallières completed her bachelor of laws (cooperative program) at Université de Sherbrooke and graduated on the Dean's list with distinction. Before beginning her legal studies, she completed a first bachelor’s degree in business administration at Université du Québec à Trois-Rivières, after which she acquired significant professional experience in the areas of sales, marketing, and import/export.
During the course of her university studies, Ms. Vallières participated in two exchanges - one at Université Jean Moulin in Lyon, France, where she studied international law, and the other at the Universitas de las Americas in Puebla, Mexico, where she studied international marketing and negotiation.
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Charles-Hugo Grant is a lawyer in the Business Law group and a member of the firm’s tax law team.
In the course of his practice, Charles-Hugo participates in planning, analyzing and implementing tax structures and strategies as part of major commercial transactions, both in Canada and abroad.
He is involved in mergers and acquisitions, financing efforts, purchase and sale transactions and corporate reorganizations, among others. He also participates in estate planning and trust creation and is called upon to assist and represent clients in the resolution of disputes with tax authorities.
Prior to joining Lavery, Charles-Hugo was a legal advisor in the capital markets and wealth management team of a major Canadian financial institution, where he worked with various business units, both for institutional clients in the capital markets and in securities brokerage and custody activities.
He also advised private pension funds on the regulatory and legal implications of their investments in various Canadian and international private equity and venture capital funds.
Charles-Hugo also had the opportunity to work for an international law firm in Brussels, Belgium and to represent Canada during an economic and diplomatic mission in China.