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Saskatchewan Mineral Exploration Tax Credit
Please submit any applications or inquiries via email to metc@gov.sk.ca. Receipt of mail-in applications may be delayed.
Saskatchewan residents can invest in mineral exploration activities within the province by purchasing eligible flow-through shares issued by approved mineral exploration companies under the Saskatchewan Mineral Exploration Tax Credit (SMETC) program. The tax credit is 45 per cent to 60 per cent (30 per cent provincial and 15 per cent to 30 per cent federal).
Flow-through shares allow mineral exploration companies to renounce or "flow through" tax expenses associated with their Saskatchewan exploration activities to investors, who can deduct the expenses in calculating their own taxable income.
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1. Benefits
The SMETC is intended to encourage long-term, sustainable development of Saskatchewan's mineral resources and to enhance Saskatchewan's competitiveness in mineral exploration.
Individual Investors
Saskatchewan residents are able to make an investment into an approved mineral exploration company, claiming a tax credit in exchange for the exploration expenses renounced by the mineral exploration company.
Partnerships
Financial partnerships purchase a portion of the eligible flow-through shares that an exploration company may issue, and in turn, sells the shares to multiple individual investors who may claim the tax credits.
Exploration Companies
Mineral exploration companies who utilize the SMETC are able to raise capital from investors via flow-through shares and flow-through warrants in order to fund their exploration activities.
This tax credit is intended to encourage long-term, sustainable development of Saskatchewan's mineral resources and to enhance Saskatchewan's competitiveness in mineral exploration.
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2. Eligibility
Individual Investors
Individuals, other than trusts, may purchase eligible flow-through shares (in accordance with section 66 of the federal Income Tax Act) from an approved mineral exploration company.
For information on how to purchase eligible flow-through shares, contact a licensed securities dealer/broker.
Partnerships
Investments in partnerships must be broken down to individual investors, and tax credits issued to individuals based on eligible flow-through exploration expenditures within Saskatchewan.
Exploration Companies
Any mineral exploration company wishing to issue flow-through shares or flow-through warrants and take advantage of the tax credit must apply to the Saskatchewan Ministry of Energy and Resources. If the application is approved, the company will receive written permission to raise up to a maximum amount of capital for exploration activities in the province.
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3. How to Apply
Initial Application
A mineral exploration company wishing to issue flow-through shares or flow-through warrants and take advantage of the tax credit must submit the following items to the ministry at metc@gov.sk.ca:
- A copy of the completed Canada Revenue Agency (CRA) Form T100A Flow-Through Share Information – Application for a Selling Instrument T100 Identification Number (SITIN) plus all other related documents required by CRA;
- A copy of the CRA approval letter containing the Selling Instrument T100 Identification Number (SITIN) or T100 Identification Number (TIN); and
- A list of the Saskatchewan Disposition Number(s) where the mineral exploration is occurring.
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4. Mandatory Reporting
A mineral exploration company that has received approval under the above-listed steps, issued flow-through shares and completed a share sale must complete and file the following items at the appropriate time at metc@gov.sk.ca.
- CRA Form T100B Flow-Through Share Information – Details of the Flow-Through Shares (FTSs) and Flow-Through Warrants (FTWs) Subscribed.
- Copies of all CRA forms T101A, T101B, T101C and T101D, as submitted to CRA.