Quebec investors in flow through get new break

Beginning this year, investors will not have to include flow-through tax benefits in the calculation of cumulative net investment losses, Finance Minister Gerard Levesque announced.

Quebec Mines Minister Raymond Savoie said this latest development will have a positive effect on all mining regions of the province.

Mining exploration across Canada has benefitted immensely from flow-through financing, particularly in 1987 and 1988 when total exploration expenses topped $1 billion in each of the years. Most of that funding was raised via flow through.

Starting this year, the federal government changed the rules, introducing a new grant scheme, the Canadian Exploration Incentive Program, and eliminating tax writeoffs (at the 133.3% level at the end of 1988) above 100% of the flow- through investment. Investors have been allowed to continue claiming a $1 deduction for each $1 invested in flow through.

In Quebec, in an effort to spur mining exploration activity, the government moved this year to allow additional tax benefits to investors, allowing a 133.3% writeoff for money spent on underground work and 166.6% for money spent on surface exploration work.

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