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Executive flow-through program

Put in a dollar.
Get it all back,
plus 12¢.

The company lends the money. The executive buys flow-through shares and sells them the same day to a buyer lined up in advance. We handle CRA, so the tax savings arrive on every paycheque. No holding period. No share-price risk.

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01 · The instrument

A share that hands its tax deductions to the buyer.

Canadian exploration companies spend investor money on drilling and surveying, then renounce those deductions to the shareholder. The usual catch is that you're left holding a volatile junior mining stock. This structure removes that catch.

100%

Deductible

Canadian Exploration Expense flows through dollar for dollar against salary income.

+15%

Federal credit

Mineral Exploration Tax Credit on top. Critical minerals (lithium, nickel, copper) qualify for 30%.

Day 1

Sold at a set price

An institutional buyer agrees in advance to take the shares at a fixed price, so the market can't move the result.

02 · The play

Lend it, sell it, file it, collect it.

  1. 1

    Company lends

    The employer advances a loan to each C-suite participant.

  2. 2

    Executive subscribes

    They buy flow-through shares in a vetted exploration offering.

  3. 3

    Buyer takes the shares

    A pre-arranged institution buys them immediately at the agreed price.

  4. 4

    Most of the loan repaid

    The sale proceeds go straight back to the company.

  5. 5

    We go to CRA

    We file a T1213 so payroll can withhold less tax at source.

  6. 6

    Payroll clears the rest

    Bigger paycheques pay off the balance. Everything after that is gain.

Two things make it work. The pre-arranged buyer takes the share price out of the equation, and the CRA filing turns a spring refund into money on every paycheque.

03 · Run the numbers

Drag the amount. Watch it come back.

From CRA$0
From buyer, after tax$0
Net gain$0
$100,000
$10K$250K$500K
70%
Province (top rate)
Federal credit
Tax saved on the deduction
Exploration credit, after tax
Sold to the buyer on day one
Tax on the sale ($0 cost base)
Loan left after the sale
Cleared by payroll in
Net gain, no share-price risk
04 · The pattern
+12%

on every dollar, at every size.

The return is set by the tax rate, the credit and the buyer's price. The amount invested only changes the scale. Double the subscription and you double the gain, in a straight line.

05 · Why this structure

Same tax benefits. None of the waiting or the risk.

Pre-arranged saleFlow-through fund (LP)Buy and hold directly
Holding periodNone18–24 months4 months minimum
Share-price riskNoneHighHigh
Can lose money after taxNot from the share priceYesYes
Repays the company loanMostly on day oneAfter the fund winds upAfter you sell
06 · Why everyone signs

The company

A high-value executive benefit funded by a loan that mostly comes back the day it goes out. No salary increase, no option pool, no dilution.

The executive

A locked-in gain with nothing to hold and nothing to watch. The loan clears through payroll within months.

Us

We run the whole loop: vetting the offering, lining up the buyer, the CRA source-deduction request, payroll setup and loan tracking.

How the numbers are built
  • The buyer's price is an assumption. Set it to the actual quoted terms for each offering, since that number drives the result more than anything else.
  • Assumes the full subscription is renounced as CEE and the participant is in the top combined bracket (ON 53.53%, BC 53.50%, QC 53.31%, AB 48.00%). Quebec's extra provincial deductions are not modelled.
  • The credit is shown net of tax, because a claimed METC/CMETC reduces the CEE pool and is taxed the following year. Both credits currently run to March 31, 2027.
  • The sale is a capital gain at a $0 cost base, 50% inclusion. The loan balance after the sale is repaid from the after-tax payroll savings over 26 biweekly pay periods. The interest-free loan benefit (CRA's 3% rate for Q4 2026) on that short-lived balance is small and not shown.
  • The main remaining risk is the issuer failing to spend the money on eligible exploration by December 31 of the following year, which can reduce the deductions. Offerings should include an issuer indemnity, and structured transactions need proper legal and tax structuring.
  • Generally for accredited investors. Illustrative only, not tax or investment advice. Each participant needs advice on AMT and their own situation.