Flow through shares for Natural Gas exploration (Quebec, Canada)

From Open Energy Information

Last modified on February 12, 2015.

EZFeed Policy

Place Quebec

Applies to States or Provinces Quebec;Quebec
Name Flow through shares for Natural Gas exploration (Quebec, Canada)
Policy Category Financial Incentive
Policy Type Corporate Tax Incentive
Affected Technologies Natural Gas
Active Policy Yes
Implementing Sector State/Province

Funding Source Government of Quebec

Primary Website http://www.efficaciteenergetique.gouv.qc.ca/en/programs-and-financial-aid/page-programmes/1/

Last Review 2015-01-08


A flow-through share is a security issued by an exploration company that waives its exploration deduction in favor of the investor. The Québec Taxation Act enables a private individual to benefit from a significant tax deduction when calculating his or her taxable income. In fact, the Québec system provides for a basic deduction equal to 100 percent of the cost of the flow-through shares. For shares acquired after March 30, 2004 the individual may deduct an additional 25% when exploration costs are incurred in Québec by a non-operating corporation. A further 25% deduction is offered when work begins with surface explorations, for a total deduction of 150% of investment costs. When a flow-through share is sold, the investor may benefit an exemption of the deemed capital gain in other words the portion of the sale price between the purchase price of the shares and their adjusted cost base, which is zero. He can also deduct certain issue expenses that have been foregone in his favor, and this, over a period of five years.

Policy Contact

Department Revenu Quebec, Resources Naturalles Quebec