Calculation assumptions

• Calculation intended for a Quebec resident only.
• 2026 tax year parameters (federal and Quebec brackets, AMT rates and exemptions, dividend gross-up and tax credit) — to be revised at each annual tax update.
• The chart plots total taxable income before and after the flow-through (CEE deduction and taxable capital gain, excluding the following year’s ITC income inclusion) against the 2026 combined Quebec marginal rate schedule.
• The adjusted cost base (ACB) of the flow-through shares is assumed to be nil; service fees reduce the capital gain on disposition.
• The after-tax return is calculated on the amount invested (purchase of shares), not on the net cash out-of-pocket.
• CEE tax savings, capital gains tax and the ITC income inclusion are calculated from the actual 2026 federal and Quebec progressive tax brackets (see the RRSP tax refund calculator), by comparing tax on base taxable income before and after each item — rather than from a manually entered flat marginal rate. The combined marginal and average rates shown are for information only.
• Since the Quebec 2025-2026 budget (tabled March 25, 2025), the 20% Quebec enhancement on flow-through shares (the two additional 10% deductions) is eliminated for any share issued after that date; this model no longer applies that enhancement.
• The exploration investment tax credit (ITC) is included in income the following year, then taxed at the applicable federal marginal rate; this inclusion is not built into the AMT calculation for the year of investment.
• Capital gains and losses are treated separately: gains are included at 50% for ordinary tax and 100% for the AMT (grossed up), while losses remain deductible at the same amount (50% of the gross amount) in both calculations — they are not grossed up, consistent with the rules for capital losses carried forward since 2024.
• Dividends are grossed up at the actual rate (38% for eligible dividends, 15% for non-eligible) for ordinary tax, as required by the Income Tax Act, but included at their actual (non-grossed-up) amount in adjusted taxable income for AMT purposes.
• The dividend tax credit (DTC) — fixed statutory rates, not indexed: federal 15.0198% (eligible) / 9.03% (non-eligible), Quebec 11.70% (eligible) / 3.42% (non-eligible) of the grossed-up amount — is fully deducted from ordinary tax, but does NOT apply to the AMT: since dividends are not grossed up there, no matching credit is required (consistent with CIBC’s official example, May 2026, where the DTC is reduced to $0 for the AMT). Aside from the DTC, the model does not account for other non-refundable tax credits (basic personal amount, etc.).
• The AMT calculation compares ordinary tax (actual progressive brackets, excluding non-refundable tax credits) to the federal and Quebec AMT (flat rate above the exemption). 2026 rates and exemptions: Federal AMT 20.5% / $181,440; Quebec AMT 19% / $183,680 — not editable in the interface, to be revised in the code at each annual tax update.
• Since the federal legislative proposals of August 12, 2024, Canadian exploration expenses renounced through flow-through shares are not added back to adjusted taxable income for federal AMT purposes (0% add-back by default, editable). This model applies the same assumption to the Quebec AMT by default — to be validated with a tax specialist, as rules may differ or change.
• The capital gain on resale of the flow-through shares is included at 100% (rather than 50%) in adjusted taxable income for AMT purposes.
• AMT paid in excess of ordinary tax is generally recoverable over the following seven years; this carryforward is not modelled here.
• This model is educational and does not account for additional particular tax situations.