Ontario Focused Flow-Through Share Tax Credit

Insider Tip

The Ontario credit is refundable — even investors with no Ontario tax owing receive the 5% as a cash refund. This makes the credit particularly valuable for investors in lower income brackets. The mining corporation's T101 slip is the key document — ensure you receive it before filing your T1. The Ontario credit reduces your cumulative federal Canadian Exploration Expense (CEE) pool in the following year, which slightly reduces future federal deductions; factor this into the net benefit calculation. For investment amounts above $50,000, consult a tax advisor — the interplay between the Ontario credit, federal METC, and the income deduction affects optimal holding period decisions.

Rejection Pitfalls 6

• Claimant is a corporation, trust, or partnership — only individuals qualify
• Claimant is not resident in Ontario on the last day of the taxation year
• Exploration expenses are not Ontario-based (e.g. expenses incurred in another province)

Success Profile

Individual Ontario-resident investors — typically high-net-worth individuals or mining sector professionals — who are comfortable with the risk profile of early-stage mineral exploration companies and want to support Ontario's mining sector while obtaining significant combined tax relief (20% credit + full income deduction on qualifying investments).

Evaluation Criteria

Non-competitive statutory entitlement. CRA verifies that (1) the investor is an Ontario-resident individual, (2) the T101 slip from a qualifying mining corporation is present, (3) the expenses renounced are eligible Ontario mining exploration expenses, and (4) the investment was made via a proper flow-through share agreement under ITA section 66. No merit assessment.

Application Steps

Required Documents 6

Eligible Expenses 7

• Prospecting costs (field surveys, sample collection) in Ontario
• Geological and geophysical survey costs directly related to Ontario mineral exploration
• Drilling costs (rotary, diamond, percussion) to determine existence/location/extent of Ontario mineral resources
• Environmental studies and community consultations required for Ontario exploration
• Direct labour costs for field crews and geological supervision
• Equipment rental and sample transportation costs
• Mobilization costs and overhead directly attributable to Ontario exploration

Ineligible Expenses 6

• Expenses from producing mines or advanced development projects
• Mine development costs
• Seismic data purchases
• Oil and gas well costs
• Legal and financial costs related to the financing itself
• Exploration activities outside Ontario

Intake Periods

Continuous — claimed annually on the investor's T1 personal income tax return for the tax year in which eligible expenses are renounced via the flow-through share agreement.

Deadline Notes

Credit is claimed on the individual investor's annual T1 return for the tax year in which the eligible Ontario mineral exploration expenses are renounced to them via the flow-through share agreement. No application deadline — follows the standard April 30 personal tax filing deadline (or June 15 for self-employed individuals).

Open Application Portal →

Ineligible Organizations

• Corporations (cannot claim — only individuals qualify for this credit)
• Trusts
• Partnerships
• Non-resident individuals

Compatible Programs

Clawback Risk

Low Risk

The credit is not clawed back once received. However, if the mining corporation is audited and the renounced expenses are found ineligible, the investor's T101 slip may be amended, triggering a reassessment of the individual's credit claim.