Subsection 66.3(1) - Exploration and development shares
Administrative Policy
89 C.P.T.J. - Q. 14
Where an amalgamated corporation on the amalgamation acquires pre-November 13, 1981 flow-through shares owned by a predecessor, those shares will not be deemed to be inventory because the amalgamated corporation did not acquire them in the circumstances described in s. 66.3(1)(a).
Subsection 66.3(3) - Cost of flow-through shares
See Also
Jes Investments Ltd. v. The Queen, 2006 DTC 3608, 2006 TCC 508
A corporation with which the taxpayer had entered into a flow-through share agreement did not in fact incur CEE or renounce to the taxpayer. In response to an argument of the Crown that once issued as a flow-through share, a share retains its flow-through status even if there is a failure to renounce, Sheridan J. found that given that the agreement was never in fact performed as intended, the shares retained their character as ordinary shares, so that s. 66.3(3) did not apply to deny a capital loss.