By Peter Nicholson
As a Canadian, when was the last time you thought about mining?
In the year 2021, amid the cell phones, computers, solar panels and electric cars, you may not consider the critical minerals that make technology possible.
Now I’ll take it a step further — what if I told you that mining is not only essential to our future economy, but also a way to give more to charity?
The truth is, mining and charitable giving are closely linked through a uniquely Canadian tax structure.
They are Canadian as hockey.
In May 2006, WCPD Inc (Wealth, Creation, Preservation & Donation) made financial services history when Dr. Earl Wynands, an eminent anesthesiologist and Order of Canada recipient, participated in the first flow-through share donation without paying a capital gain.
Since then, my firm has facilitated more than $175 million in charitable giving for our clients all across Canada.
This trusted method of giving is simple and combines two tax policies that are older than your RRSP: one to assist Canada’s resource sector to create jobs and produce critical minerals, and another to give Canadians a tax break for donations to charity, or your conventional tax receipt.
Together, combining these tax policies allow our clients, on average, to give up to three times more to charity, at no additional cost due to the tax efficiency,
In my conversations with major donors, I find the tax incentives behind charitable giving are easily understood. We can all grasp that charities need our help.
But mining? Why is that important?
There are very good reasons why, since 1954, our government has offered a 100% tax deduction for buying flow-through shares, so junior mining companies can find that next deposit of cobalt for electric cars, gallium for LED lights, or indium for solar panels.
Canada has been a world leader in mining for decades, accounting for more than $100 billion to our annual GDP, and producing over 700,000 direct and indirect jobs. The fact it is also the number one employer of Indigenous Peoples makes it all the more important.
Put simply, the more mining that occurs, the better it is for Canada, on many levels. However, from 2011 to 2019, the mining industry was in one of the worst bear markets in history. India and China stopped growing to the same extent. And as a result, there was less drilling everywhere, including Canada.
But the tables have turned.
Earlier this month, three of the top mineral producing countries — Australia, the United States and ourselves — formally launched a landmark initiative aimed at researching and discovering critical resources needed for the world of tomorrow. The Critical Minerals Mapping Initiative was founded due to one basic principle: to fuel technology and renewable energy, we need raw materials.
Meanwhile, as we emerge from this pandemic, investors are once again flocking to gold in their portfolios as a safe haven and a trusted hedge against market uncertainty.
What it adds up to is not only the rise of the mining industry globally, and in Canada, but also an opportunity for major donors.
In 2018, due to less mining in Canada, our firm had a $60 million wait list of high-net-worth clients, all searching for the flow-through shares needed to facilitate our structure. Today, we now have plenty of availability for new donors.
Amid the worst public health crisis in a generation, there is no doubt that charities need help now more than ever.
So my message is clear: if you are a high earner, recently sold a business, or experienced a large capital gain, you can help Canada’s mining industry, while also giving more to charities of your choice.
And the next time you pick up that cell phone, login to your computer, or purchase an electric car, consider this: the minerals inside may have done more than created jobs and made our planet cleaner.
They may have helped a Canadian registered charity.
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 countless donors, foundations and institutions and boards, he has helped generate in excess of $175 million for client donations. WCPD is Canada’s leader with over 500 closed charity flow-through offerings. To learn more about how we can assist your philanthropic goals, write firstname.lastname@example.org