Philanthropic Tax Planning

Maximize your donations using charitable flow-through shares

Lower Taxes,

Higher Giving

Philanthropic Tax Planning

First and foremost, giving back comes from the heart. Many philanthropists do not always consider tax savings when it comes to their donations.

The WCPD Foundation seeks to change that.

Our clients are among the most successful and generous people in society. Most want to know – what is the best and most efficient way to give? The answer is public flow-through shares with an immediate liquidity provider.

Using our proven and efficient flow-through share model, clients can drastically reduce the after-tax cost to give and make the maximum impact on their charities of choice. Individuals and corporations also have the option of earning an after-tax profit.

Since 2006, our firm has completed more flow-through transactions than any firm in Canada and, on behalf of our clients, facilitated more than $350 million in donations to charities across the country.

Peter Nicholson, President & Founder of WCPD Inc.
Peter Nicholson, President & Founder of WCPD Inc.

What charities are important to you?

How it Works

Since 1954, Canada Revenue Agency (CRA) has offered a 100% tax deduction on flow-through shares, which are stock issued by junior mining companies in Canada to fund exploration. The government offers this tax incentive due to the mining industry’s crucial role in the Canadian economy, while serving as a major employer of Indigenous Peoples. Governments around the world have also deemed mining essential to our green energy future, through the much-needed supply of critical minerals.

To unlock tax benefits, clients purchase these public flow-through shares and donate them to charities of their choice. The shares are then immediately sold at a discount to an institutional buyer, or liquidity provider, for cash. The liquidity provider takes on the stock market risk – this is a key benefit.

The charity receives the cash proceeds, but issues a donation tax receipt to the donor, generating a second 100% tax deduction.

By combining these two tax policies, our clients can reduce their taxes, and if they wish to, give more to charities of their choice. Alternatively, clients can keep the tax savings from the flow-through shares and sell them to the liquidity provider, earning an after-tax profit.

The WCPD Foundation takes care of the entire process for you, from beginning to end.

Download our Coins Presentation

Proud to Support

The WCPD Foundation is proud to be an Imagine Canada Caring Company. As such, we invest a minimum of 1% of pre-tax profit to strengthen Canadian communities and contribute to a vibrant, healthy society.

Step by Step

Step 1

Step 1

Every dollar invested in these shares is 100% tax deductible.

Buy flow-through shares issued by a Canadian mining company.

Step 2

Step 2

Immediately donate these shares to charity. These shares are then instantly sold to a pre-arranged buyer (liquidity provider) at a pre-arranged contractual price.

This step eliminates any stock market risk to the donor.

Step 3

Step 3

Charity receives the cash proceeds and issues donation tax receipt to the donor, generating a second 100% tax credit.

The Result

The Result

By combining two tax policies (flow-through shares & donations), the WCPD Foundation can help reduce your taxes, and if you wish to, allow you to give more.

By The Numbers

Amount of charitable giving facilitated by the WCPD Foundation:

WCPD Inc. has assisted with financings for resource issuers for:

Personal tax return filings since 2006, using a flow-through tax receipt and a charity tax receipt

Cheques issued by the WCPD Foundation to other charities, as directed by clients:

Advanced CRA tax rulings on this exact structure, with flow-through shares

The year CRA introduced flow-through shares as a 100% tax deduction – three years older than RRSPs

Five burning questions on charity flow-through shares

On their own — without immediate liquidity — absolutely. First introduced in 1954, flows are a financial policy instrument used by junior mining companies and facilitated by the government to raise capital for natural resources and critical minerals through a tax deduction equal to the amount invested.

That’s a fancy way of saying you will receive a 100-per-cent tax deduction on the amount you buy. But there is just one problem — traditionally, these investments end up being a homerun or a strike out. These junior mining companies use the money you invested to drill and hopefully find that next big discovery. But nine times out of 10, they fail. Meanwhile, investors must hold these shares for at least four months after purchase and, during that time, the stock could skyrocket or plunge.

Our structure turns that home run or strikeout into a double, every time. That’s why Ioften call it “the GIC of tax reduction.”

What makes our structure so special? The liquidity provider. Liquidity providers are institutional buyers of shares that understand the mining business. They are willing to assume this stock market risk. However, in return, the flow-through liquidity provider requests a discount on the shares, generally around 30 per cent. Their hope is the share price doesn’t dip below that discount by the end of four months.

But that’s not your problem. When you buy the shares, you immediately donate them to charity. In turn, the shares are then instantly sold to the pre-determined liquidity provider at a discount. In the process, the donor retains that 100-per-cent tax deduction. Finally, the charity receives the cash proceeds from that sale to the liquidity provider and issues a charitable tax receipt to the donor, triggering a second 100-per-cent tax deduction on the cash value of the donation.

This whole process happens almost instantly.

We all know it costs 50 cents to give a dollar when you donate cash via a cheque. Or a better method is you donate public stock; for example, stock that has doubled without paying a capital gain is a 37-cent cost to donate a dollar, or a 27-cent cost for stock that has increased tenfold. With the charity flow method, due to the two tax policy deductibility, it can cost as little as a penny to give a dollar to as high as a 25-cent cost, motivating donors to give more.

So are charity flow-through shares risky? With an immediate liquidity provider, absolutely not.

A tax loophole implies that someone is skirting the law or bending the rules. Charity flow-through shares are the exact opposite.

The entire structure is based on two long-standing government tax policies. In this case, flow-through shares are intended to raise capital for junior mining companies. To clarify, these are companies with no revenue; they only believe there is a deposit of nickel, copper or cobalt. And the government is more than willing to provide tax breaks to Canadians that help them find out.

Canada is a world leader in mining, generating hundreds of thousands of jobs and more than $100 billion towards our annual GDP. In fact, because most of this mining occurs in the North, it is the number one employer of Indigenous peoples. Meanwhile, mining produces many of the minerals and raw materials we require to create products that we use in our day-to-day lives. In the last federal budget, critical minerals took centre stage for their role in serving as the building blocks of renewable energy technology.

The charitable tax receipt speaks for itself. Since 1918, the government has offered a 100-per-cent tax deduction for Canadians that support charities. And why not? We are doing the government’s work. For every dollar you give to charity, that is one less dollar they need to spend to help society.

In the past, when you mentioned mining, it conjured images of our grandparents’ generation — destructive, archaic and faces covered in soot.

But on April 7, 2022, the government opened the eyes of many Canadians when it announced the first ever Critical Minerals Strategy, a new set of laws, regulations and tax incentives to help boost the supply of critical minerals, or the building blocks of technology and green energy solutions. Think titanium for solar panels or copper for circuit boards and electronics.

The government is spending $3.8 billion to boost critical mineral production and supply chains over the next 10 years, while introducing an additional 30-per-cent critical minerals tax credit (or 60-per-cent tax deduction) on charity flow-through deals that involve these precious resources. This tax credit is on top of the typical 100-per-cent tax deductibility you receive from a standard charity flow-through deal.

What it adds up to is not only great news for Canada’s transition to green energy, but also for our clients.

Nothing in life is perfect. Charity flow-through shares with an immediate liquidity provider are no exception. There is one remote risk in this deal — the junior mining company must use the funds raised towards exploration. They cannot use it for anything not related to the drill bit.

In all my years of business, having facilitated more than 1,000 flow-through share transactions, I’ve had to deal with it 18 times, or 1.8 per cent of the time. And even if it happens, mining companies must sign an indemnification that they will spend the money correctly. As a result, if a company is reassessed and found in violation, our clients are made whole by a payment from the mining company.

While it is indeed a niche product, anyone with a minimum income of $250,000 per year would qualify. It could also work for certain corporations. Remember, charity flow-through shares allow you to reduce your taxes and direct them to charities of your choice. If there is no tax to pay, then charity flows are not the right fit.

Coins Presentation