Quebec Budget: Flow-Through Benefits Cut, Critical Minerals Favored

Quebec’s 2025-26 budget has sent ripples after removing key tax advantages under the province’s flow-through share regime. The new measures eliminate several provincial benefits once used to attract additional investment into Quebec’s mineral exploration projects.

“This budget significantly revamps the deductions and exemptions available under the Quebec flow-through share regime,” wrote Bennett Jones authors Julia Qian Wang, Philip Ward, and Antoine Messervier.

Previously, Quebec taxpayers investing in flow-through shares could deduct as much as 120% of qualified exploration expenses, a perk unavailable elsewhere in Canada. As of March 25, those extra deductions have been terminated for new share issuances, although certain offerings in progress may still qualify for grandfathering rules if they meet specific deadlines.

Another pivotal change involves the end of a provincial capital gains exemption that had alleviated the impact of Quebec’s deemed nil cost for flow-through shares.

“It is expected that these changes to the Quebec flow-through share regime will significantly affect the front-end subscription price for Quebec flow-through share offerings going forward,” the authors noted.

In a related development, the province’s refundable tax credit regime for mining and other resources has been expanded. Notably, the credit is no longer confined to exploration expenses but now extends to certain development expenditures incurred after March 25.

For projects mainly focused on critical and strategic minerals, Quebec is offering enhanced rates of 45% for smaller “specified qualified corporations” and 20% for larger operators, although these rates will revert to lower levels after December 31, 2029.

Companies targeting minerals outside that critical and strategic category will generally see lower rates than before, and a new $100 million cap per five-year period is being introduced to limit eligible expenses.

As the team at Bennett Jones observed, these changes will likely align Quebec’s flow-through share premiums more closely with those of other provinces, ending the province’s historical premium for exploration activities. At the same time, miners focused on development or critical minerals could see meaningful gains from the enhanced tax credit rates.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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