Response to: Budget 2022 Tax Measures and Amendments to Support a Growing Economy, Draft Legislation Consultation

Five recommendations: 

1. Qualified Person (QP) prescribed manner and form of certificate (the “QP Certificate”) – transitional provision for 2022 CMETC financings completed prior to the publication of the prescribed form as set out in ITA s.66(12.61) (e); 
2. Absent fraud or gross negligence proven by the CRA, the QP Certificate certifying that the “expense will be incurred pursuant to an exploration plan that primarily targets critical minerals” as set out in ITA s.66(12.61) (e) is uncontestable by the CRA; 
3. If recommendation 2 above is not accepted, then reformatting the CMETC as a subset of the broader METC; 
4. Increasing resource issuer tax compliance by amending the ITA Regulation s.6201.1(5)(c) definition of ‘excluded obligations’ so that issuers’ obligations under the standard flow-through share tax indemnity contained in subscription agreements include (1) interest charged by the CRA to flow-through share subscribers and (2) that the indemnity obligation is a first charge against the assets of the issuer in priority to banks but always subordinate to government claims. This provision would apply to all flow-through offerings, not just those that otherwise quality for the CMETC. 
5. Allow for the 3 Year Carryback of the CMETC