Whiff of flow-through death emanates from Finance Dept.

Statements made last week by Finance Minister Michael Wilson are the closest thing yet to a requiem for flow-through share financing.

Preaching tax reform to a congregation of corporate executives and tax accountants in Toronto, Mr Wilson made it clear that some of Canada’s favorite tax shelters could vanish as the system is overhauled. While flow-through wasn’t mentioned by name, it was certainly implied.

A Toronto daily newspaper quoted Mr Wilson as saying that “even some preferences that were put in place for sound economic and social reasons will be eliminated.” He added that special interest groups have been pleading that certain tax breaks be retained.

In October Mr Wilson confirmed that flow-through financing for mineral exploration is part of a broad review of tax policy being undertaken by the Department of Finance. But the future of the program won’t be known until the results of the current tax review are received, he said during Question Period in the House.

Many mining representatives have expressed fear that flow- through will be scrapped in the next federal budget, expected sometime in the spring.