CRA is reviewing whether it will permit critical mineral status to be certified after the related flow-through share agreement is made

Regarding the draft rules for an enhanced mineral exploration credit for individuals’ investing in flow-through shares, CRA noted in relation to the stipulation in draft para. (e) of the “flow-through critical mineral mining expenditure” definition that the required certification by a “qualified engineer or geoscientist” be “completed … no more than 12 months before the time that the agreement is made”:

This wording suggests that the Certification is to be completed before the time the flow-through share agreement is made (but not more than 12 months before that time), although it doesn’t expressly mandate that the Certification be completed before the flow-through share agreement is made (rather than after). We have raised this issue with the Department of Finance.

While the prescribed form for the certification had not yet been released, CRA will accept a letter signed by the qualified engineer or geoscientist that includes inter alia “a brief explanation of why it is expected that the mineral deposit(s) being explored will contain primarily (i.e., more than 50%) critical minerals” and the certifier’s professional qualifications.

Neal Armstrong. Summaries of 29 September 2022 External T.I. 2022-0949081E5 under s. 127(9) - flow-through critical mineral mining expenditure and General Concepts - Transitional Provisions.