Flow through shares are in effect and simply put, from resource / mining companies with more tax write offs than they can use and thus these tax deductions and credits are “flowed through” to investors.

Flow through shares are nothing new. They have been used since the 50’s and are in fact the oldest tax assisted investment program in Canada.

Re: the accredited investor part…. many people outside of that “accredited investor” definition use them very effectively and properly. If, on a long term basis (through market ups and downs), someone who gifts generously and regularly as a life long philosophy can save themself thousands upon thousands in tax in a life time and I get paid for my work it’s a win win or a “Mutual Gain”.

What my firms financial planner’s make on such a transaction is fully disclosed to the client along with the risks. This is mandatory from a regulatory standpoint. It’s not much different than an accountant or lawyer who devises some slick tax saving tax strategy for a client of theirs and bills them for that work.

These securities should be reserved for accredited investors (individual or organizations), which, in Canada, is defined as a net worth of one million dollars not including the value of your principal residence or making at least $200,000 each year for the last two years ($300,000 if with a spouse).

These are great for financial advisors who receive a commission of 4.00% to 4.25% of the total invested in these vehicles. Incredibly lucrative.

Another comment re: the wide variability in the value of the investment. If the investment has fallen during the holding period it of course would be most advantageous to put off the charitable giving of the investment until a later time, when it has recovered it’s losses. In the interim, you may have to revert to the traditional giving of cash, particularly if you have a certain amount you like to or are committed to giving on an annual basis.

I do have one question: Is the initial tax credit (available at the time of investment) applicable against employment income? or only capital gains?

I’m asking because in situations where significant capital losses have accumulated (ie. after 2008), this would be a great strategy to use up one’s capital loss carry forward… or am I missing something?

Thanks. Well, that is very reasonable. I had visions of 7 years or so. I would imagine that this year might be a great time for SFLS to actually appreciate after purchasing them later this year.

Perhaps Carey will follow up when they become available to give us more info.

Also, are there any analysts which measure the various offerings to give one an idea which ones are most likely to succeed with perhaps the least amount of risk?