A flow-through share donation agreement can provide the lowest after tax cost of giving. Flow-through shares are a financing tool available to Canadian resource companies for exploration and development.

Initial buyers are permitted to deduct the cost of purchasing flow-through shares from their income.

Flow-through shares have a net cost of zero so capital gains need to be paid when the shares are sold (usually on the same day as the purchase).

Gifting the shares to Charity (usually on the same day as the purchase) allows for capital gains exclusion and a charitable tax credit. We strongly recommended that a donor review with a tax advisor.


Cash Donation Donation of publicly traded shares with a zero cost basis Donation of Flow through shares
Funds received by TCS $100,000 $100,000 $100,000
Cash donation
Value of shares donated $-100,000 $-100,000 $-251,789
Net investment in Flow-Through Shares
Tax Savings
  • CEE Deduction
  • Investment Tax Credit (net of inclusions)
  • Donation Tax Credit
$50,410 $50,410 $60,730
  • Capital Gains Exemption
Tax Cost
  • Capital Gains Exemption
After-tax cost of donation to TCS $-49,590 $-22,825 $-9,957
Cost as % of donation to TCS 49.59% 22.83% -9.96%