Quebec Mines Minister Raymond Savoie has been openly critical of the Canadian Exploration Incentive Program, the federal government program that changes flow-through share investment benefits from a tax deduction system to a system of grants.
Savoie, a strong supporter of the flow-through vehicle in general because of the boost it has been to mineral exploration, objects to the CEIP because it gives government civil servants the responsibility of administration. That makes it politically vulnerable. Previously, the viability of flow-through financings was judged solely by the marketplace.
The CEIP doesn’t come into effect until 1989, so Savoie may be premature in his criticism. The potential for trouble has certainly been added, but that potential may never be realized.
What are more likely to put a damper on flow-through funding and therefore exploration in general are the intricacies of the new system. If the previous system was overly generous as the federal government seems to believe, its elegant simplicity was also a drawing card. Adding layers of government bureaucracy won’t increase exploration work one iota, but it could well scare off potential investors.
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