Flow-through shares

Quebec taxpayers are among the highest in the OECD. Here's a table summarizing the marginal tax rate at both levels (federal and provincial) for different salary levels (year 2023).  Source : Planiguide

Annual Income 2023

Marginal tax rate

100 000$ to 105 000$


105 000$ to 139 000$


140 000$ to 199 000$


200 000$ to plus


Several tax shelters are available to reduce the tax burden imposed by tax law. Among these, flow-through shares are a way of optimizing a taxpayer's tax efficiency. 

 A few comments

Investing in flow-through shares involves risks

This type of investment is part of a tax optimization strategy

Our role is to ensure that we present our clients with as many options as possible to optimize their financial and tax situation. Flow-through shares are one of the tools available.

You are invited to consult your accountant or tax advisor to assess whether this type of investment corresponds to your tax situation.

How to invest in flow-through shares:

·         Investors can access the flow-through share market by purchasing shares directly from companies, or by investing in a flow-through limited partnership.

Flow-through limited partnerships are investment vehicles that offer three important advantages, in addition to the tax benefits of flow-through investing:

  1. Professional management
  2. Access to a wide range of flow-through shares
  3. Diversification

The risk associated with investing in small resource companies can be reduced when experienced, professional investment managers build a well-diversified portfolio of companies.

The life cycle of flow-through share investments is as follows:

Source: Flow through guide Ninepoint and Mapple Leaf

Investors invest in the units of the Limited Partnership, thus become limited partners.

Limited partnership enters into investment agreements with resource companies in exchange for flow-through shares.

Within approximately 12 months the Limited partnership implements a mutual fund rollover transaction.

Limited partners will receive an approximate 140% tax deduction in the year in which they invest (or 147% or more if a Québec resident investor).

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