What is the opportunity?

For over 50 years, the Canadian government has allowed a resource companyʼs exploration expenses, known as Canadian Exploration Expenses (‘CEE’), to be transferred (or ʻflowed-throughʼ) to holders of Flow-Through shares in the company. For a resource company, certain exploration and development drilling activities qualify for Flow-Through shares. For example, activities such as the cost of seismic surveys are a qualified Flow-Through expense.

A Flow-Through Limited Partnership (‘FTLP’) is a professionally managed portfolio of Flow-Through shares in Canadian resource companies which combines unique tax advantages with the prospect of capital appreciation. The LP structure is used as an efficient way to pool the portfolio investments and ʻflow-throughʼ the tax benefits to the investors.

Flow-Through LPs can be used to:
1) Wealth preservation
2) Shelter lump-sums
3) Efficiently withdrawing cash from companies
4) Manage registered accounts
5) Prevent or reduce Old Age Security clawbacks
6) Enhance corporate dividend accounts
7) Reduce your effective personal tax rate

Additional tax planning benefits related to FTLPs include at-source deductions and the ability to defer deductions to a future year.