Calculations by the author. All values are in $CAD
“Premium flow-through shares” denotes a flow-through transaction with a pre-arranged back-end buyer; these transactions sell at a considerable premium.
The METC (Mineral Exploration Tax Credit) is calculated at 30% beginning 2022, and 15% prior to 2022; consistent with federal policy changes. Calculations do not include income tax, if any, paid following on the amount of the METC claimed by the investor (it is not possible to estimate the amount that would be eligible for taxation). Due to insufficient information, calculations do not include any provincial flow-through share tax credits.
All tax estimates assume an Ontario buyer taxed at the highest tax rate (consistent with department of finance estimates) and are calculated using the combined federal-provincial tax rate for Ontario (53.53% income tax and 27.67% capital gains tax)
Estimates of investor profit assume the investor uses the entire value of the METC deduction to reduce federal taxes owing, and that the investor sells the shares soon after for the discounted common share price at the time of purchase (consistent with department of finance estimates)
Chart: Broadbent Institute