Your laptop, mobile phone or your electric vehicle.
All of them are dependent on vital minerals and metals found in Canada — think of lithium, graphite, nickel, cobalt, copper and rare-earth elements.
And all of these minerals and metals are central to Canada’s carbon neutral pledge by 2050.
Peter Nicholson is the president and founder of Wealth Creation Preservation & Donation Inc (WCPD). A tax policy expert by trade, Nicholson works at the intersection of those investing in the mining sector and others involved in large-scale philanthropic efforts.
These are donors who place their money and trust in B.C. institutions such as BC Children’s Hospital, Simon Fraser University or the University of British Columbia.
Where all of these parties meet is via a tax policy called the flow-through share, a tax incentive that WCPD specializes in.
Established in Canadian tax policy in 1954 —three years before RRSPs — the flow-through share is 100 per cent tax deductible and geared towards those earning more than $225,000.
In the context of mining, picture the flow-through share in a similar vein to venture capital investment. It’s a financial policy instrument used by mining companies and facilitated by the government to raise capital for natural resources and critical minerals through a tax deduction equal to the amount investment.
“Flow-through shares exist because the government wants us to do more of this,” Nicholson says. This is about jobs. It creates jobs in the north where these minerals are: gold and silver and then the critical minerals. This is an ideal example of how we should help our Indigenous neighbours, by giving them entrepreneurship capabilities and high-paying jobs in the mining sector.”
WCPD enters into the fray when investors purchase flow-through shares and donate them to charities of their choice.
The shares can then be sold to a pre-arranged liquidity provider — an institution or a mutual fund, for example — to avoid stock market volatility.
In other cases, investors keep the cash proceeds from the liquidity provider and enjoy a rate of return between 20 and 30 per cent.
“It basically takes an investment in venture capital that would have either been a strikeout or a homerun and now we make it into a series of doubles,” Nicholson explains. “With these critical minerals we are in inning number one in a nine-inning game. People are just starting to realize how important these will be to get to net-zero carbon emissions by 2050.”
There is where Canada is quite literally a game changer on the world’s stage.
Canada currently produces 60 minerals and metals at 200 mines and 6,500 sand, gravel and stone quarries across the country.
This country is home to almost half of the world’s publicly listed mining and mineral exploration companies, with a presence in more than 100 countries. The combined market capitalization is listed at $520 billion.
With minerals such as lithium and graphite, demand could increase by as much as 4,000 per cent.
China and Russia are currently the world’s leading providers of rare-earth minerals, while Canada ranks third. The U.S. and European nations will increasingly look to Canada to fulfill this massive surge in demand.
Nicholson uses the following analogy to drive home our domestic importance and expertise: where 45 per cent of all NHL players are Canadian, 65 per cent of all publicly listed mining companies across the globe are based in our nation.
“We dominate mining more than we dominate hockey and most Canadians don’t have any clue that we’re that good at it,” Nicholson says. “People are now seeing that critical minerals are the way to zero carbon. Now education needs to be brought forward to Canadians and the world to say that mineral energy will replace carbon. This is an investment and a change that happens once in a century. “
For more information on the the flow-through shares, visit www.wcpd.com.
