Quebec Tax Legislation & Regulation Amendment

The Quebec Government has confirmed in an Information Bulletin released on December 16th that Québec tax legislation and regulations will be amended so that Quebec residents will be entitled to the same tax treatment provincially for the new federal 30% Critical Minerals Exploration Tax Credit (CMETC) as they receive for the METC (the 15% federal tax credit added to the flow-through share deduction for grass roots exploration expenses).

Until now the full impact of the CMETC for Quebec individuals was unclear. The federal tax legislation considers the amount of both the METC and the CMETC to be income in the hands of a flow-through share purchaser in the calendar year following the year in which the purchaser subscribed for the flow-through shares. However, for the METC there is no corresponding income inclusion for Quebec provincial tax purposes. The Quebec Tax Act requires amendment to expand this treatment to the CMETC. The Information Bulletin confirms that these amendments will apply in respect of an amount of CMETC that an individual receives or will be entitled to receive from and after federal Budget date of April 7, 2022.