A potential new tech tax policy could be a windfall for Canadian charities
In Mark Carney’s “Canada Strong” plan, our prime minister’s priorities are clear.
If there is one theme that unites them all, it is celebrating and uplifting Canada. From “Buy Canadian” to ambitious infrastructure projects to investing in our national security, his plan reflects both a strong sense of nationalism and our shaky relationship with the Trump White House.
But there was one point in the April 2025 plan you may have missed and that will be of particular interest to Canadian charities.
Tucked onto pg. 49 was a provision that, in my mind, could drastically change the fundraising and innovation landscape in Canada.
“A Mark Carney-led government will incentivize investment in innovation, especially Canada’s startups, to help them grow and scale by introducing flow-through shares to our Canadian startup ecosystem, supporting companies in AI, quantum computing, biotech, and advanced manufacturing to raise money faster,” the plan states.
“This builds off the successful model that has drawn investment into Canada’s world-leading mining sector and will help our startups scale up and be the best in the world.”
This small provision in Carney’s plan could mean billions for Canadian charities and billions more for our Canadian technology sector.
I should know.
Since 2006, my firm — WCPD Inc., or WEALTH for short — has been a pioneer in the charity flow-through mining structure. We did the first such deal that year and, ever since, our firm alone has created $1.5 billion in financing for Canadian junior mining projects and more than $350 million for Canadian charities.
It is a tried-and-true tax structure, much like your RRSP, that combines two Canadian tax policies: flow-through mining exploration shares and your conventional charitable tax receipt.
To incentivize capital in our resource sector, especially in critical minerals for green energy transition, the government offers a 100 per cent tax deduction for every dollar invested. After buying the shares, you can then donate them to charity, unlocking more tax savings.
Normally these flow-through shares would be risky, based on whether the mining company finds something exciting, or not. So, to de-risk the transaction for Canadians, we bring in a liquidity provider, or institutional guaranteed buyer of those shares. These investment funds, hedge funds or high-net-worth individuals understand these mining companies and are willing to instantly buy those volatile shares at a pre-arranged discount to their stock price.
As a result, the liquidity provider takes on all the stock market risk.
There are no surprises; both the donor and the charity will know the outcome beforehand. The charity receives a cashable cheque and the donor, through those two tax policies, can grind down the cost to donate to as low as a penny — not the usual 50-cent cost when you donate cash.
Our firm (or any charity flow-through provider) handles the entire process for you alongside your accountant or financial adviser.
The key factor here is having tax to pay. If you make more than $250,000 a year or sold an asset and have a large capital gain inside a corporation, charity flow-through shares with an immediate liquidity provider have become a plain-vanilla way to reduce the cost to donate to any registered charity, enjoyed and trusted by major donors and foundations across Canada.
Like I said, my company has been leading the field since 2006. And today, almost 20 years later, Prime Minister Carney has shown interest in expanding this tax structure to our technology sector.
Now, to be clear, we don’t know if this new tax law will come to fruition. Meanwhile, we also don’t know what the structure could look like. Will it mirror the charity flow-through model for junior exploration companies? Or be a bit different?
A key aspect of the charity flow-through structure for mining companies is dealing with the risk of early-stage exploration. By giving Canadians tax deductions, the government can laser capital into this crucial — yet vulnerable — stage of the mining process.
Will early-stage technology companies need the same leg-up? My bet is no. In Canada, tech startups are generally able to raise capital in the pre-seed and seed rounds from friends, family and other people in their immediate network when the need is low six figures to as high as $5 million.
The same might be true for Series A or even B rounds, when promising tech companies are seeking to raise $10 million or even $20 million.
But what about Series C and beyond? When the need is in the tens or even hundreds of millions? This is when American and international venture capital swoop in and take our tech companies away from Canada.
If we want to keep the next Shopify or Fullscript or BlackBerry or Hopper north of the border, that’s where innovation flow-through may come into play. Let’s keep these Canadian companies Canadian. Let’s build our own Silicon Valley and prevent our brightest minds from going elsewhere.
The best part? Imagine financing Canadian technology and innovation while also supporting local charities.
Mining isn’t exactly top of mind for your average Canadian. Mines tend to be in remote areas, out of sight and out of mind. Technology? We live and breathe it, don’t we? It’s a need everyone can relate to.
Charity flow-through shares could be a major spark to Canadian innovation and our Canadian charities. Will it happen? Only time will tell.
What I do know is that the flow-through share policy is quintessentially and uniquely Canadian. It fits perfectly with our new prime minister’s vision for the future, where we’re all on Team Canada.
For decades, Peter Nicholson has been a recognized leader in Canadian tax-assisted investments with a specialized focus on philanthropic tax planning and tax reduction. Through his work with donors, foundations, institutions and boards, he has helped generate in excess of $350 million in client donations. To learn more about how WEALTH (WCPD Inc.) can assist your tax and philanthropic goals, write Peter.Nicholson@wcpd.com
This article first appeared in the 2025 Giving Guide produced by the Ottawa Business Journal.