On April 7, 2022, Finance Minister Chrystia Freeland tabled the federal government’s new budget for 2022. This budget includes several tax measures relevant to the mining industry in Canada. The Canadian federal government intends to provide $3.8 billion over eight years to implement Canada’s first critical minerals strategy. One of the methods used to implement this new strategy and stimulate exploration is an investment vehicle well known to the mining industry: flow-through shares. The 2022 budget proposes to create a new 30% Critical Mineral Exploration Tax Credit (CMETC) for certain specified minerals. Specified minerals that would be eligible for the new CMETC are: copper, nickel, lithium, cobalt, graphite, rare earth elements, scandium, titanium, gallium, vanadium, tellurium, magnesium, zinc, platinum group metals and uranium. As for the regular mineral exploration tax credit, the exploration expenses must have been incurred in Canada. The renunciation of expenses must also have been made under flow-through share agreements entered into after budget day and before March 31, 2027. It is important to note that there will be no cumulation of tax credits. Eligible expenditures will not be eligible for both the proposed new CMETC and the 15% regular mineral exploration tax credit (METC). In order for exploration expenses to qualify for the CMETC, a qualified person (as defined in National Instrument 43–101 issued by the Canadian Securities Administrators) will further have to certify that the expenses renounced will be incurred in the course of an exploration project for specified minerals. On this point, the measure seems to insert a new legal test of “reasonable expectation” that the minerals targeted by the exploration are “primarily specified minerals”. No details have yet been issued on the mechanics of applying this test. However, if the qualified person is unable to demonstrate that there is a reasonable expectation that the minerals targeted by the exploration project are predominantly specified minerals, the related exploration expenses would not be eligible for the CMETC and consequently, any credit granted for ineligible expenses would be recouped from the flow-through share holder who received the credit. Pending the tabling of a more detailed legislative version, careful attention and planning will therefore be required for new flow-through share financings to ensure that they meet the legal criteria for this new tax credit. Our team of professionals in securities, mining law and taxation is available to answer all your questions regarding this new measure and to assist you in the implementation of a successful flow-through financing: Josianne Beaudry René Branchaud Ali El Haskouri Charles-Hugo Gagné Éric Gélinas Sébastien Vézina
- Québec, 2020
Charles-Hugo is a lawyer in the Business Law group and a member of the firm’s tax law team.
In the course of his practice, Charles-Hugo participates in planning, analyzing and implementing tax structures and strategies as part of major commercial transactions, both in Canada and abroad.
He is involved in mergers and acquisitions, financing efforts, purchase and sale transactions and corporate reorganizations, among others. He also participates in estate planning and trust creation and is called upon to assist and represent clients in the resolution of disputes with tax authorities.
Prior to joining Lavery, Charles-Hugo was a legal advisor in the capital markets and wealth management team of a major Canadian financial institution, where he worked with various business units, both for institutional clients in the capital markets and in securities brokerage and custody activities.
He also advised private pension funds on the regulatory and legal implications of their investments in various Canadian and international private equity and venture capital funds.
- Participated in the guidance and representation of Agile MV, a Quebec company specializing in medical device design, development and manufacture, in the purchase of all its shares by Resonetics, an American company backed by major American private equity firms Carlyle and GTCR.
- Participated in the tax structuring of Premier Park LLC for the purchase of Groupe Calypso-Valcartier’s shares.
- Co-author, “Transfert de votre entreprise au sein de la famille : fini les désavantages,” Audrey Gibeault and Charles-Hugo Gagné, AQMAT, Spring 2022
- Author, “Federal Budget 2022: Good News for Mining Exploration Companies!”, April 2022
- Canadian Finalist – Philip C. Jessup International Moot Court Competition 2018:
- Francophone Oralist, 1st place, Applicant Memorandum, 1st place, and Combined Memorandum in Canada, 2nd place
- Dean’s Honour List, University of Ottawa
- Scholarship for Academic Excellence, University of Ottawa
- LL. M. Taxation, HEC Montréal, 2022
- LL.L., Cum Laude, University of Ottawa, 2018
- Certificate in Chinese Law, China University of Political Science and Law, 2016
Boards and Professional Affiliations
- Young member (student affiliate), Ordre des Administrateurs Agréés du Québec (Adm.A.)
- Member, Association de planification fiscale et financière (APFF)
- Member, Canadian Tax Foundation (CTF)
- Member, Young Canadians in Finance (YCIF)
On June 13, 2022, Resonetics announced the purchase of the entirety of the shares of Agile MV, a Montréal-based medical device design and development contract manufacturing company. The transaction was motivated by the quality of expertise that Agile MV's team of engineers, scientists, and technicians possess throughout the entire production cycle, from initial concept consolidation to mass production. Our partner, Audrey Gibeault, had the privilege of representing the company in this major transaction that involved complex tax planning, among other things. In business law, this transaction was led by our partner Étienne Brassard. Ms. Gibeault and Mr. Étienne Brassard were mainly assisted in this transaction by Gabrielle Ahélo. They were assisted by Luc Pariseau, Sonia Guérin, France Camille De Mers, Brittany Carson, Éric Gélinas, André Vautour, Michael Pageau, Maxime Chabot and Charles-Hugo Gagné. —Agile MV is a Quebec-based medical device design and development contract manufacturing company. It specializes in the development of minimally invasive diagnostic and therapeutic medical devices in the following areas: cardiac electrophysiology, interventional cardiology, interventional radiology, interventional pulmonology, interventional gastroenterology, interventional pain management and interventional neurology.Resonetics specializes in advanced engineering and manufacturing solutions for the life sciences industry, laser cutting, centerless grinding, nitinol processing, thin-wall stainless steel and precious metal tubing, photochemical machining, microfluidics, sensor solutions and medical energy.
Lavery is pleased to announce that two lawyers are joining the firm, in the Montreal office. Charles-Hugo Gagné Charles-Hugo is a lawyer in the Business Law group and a member of the firm’s tax law team. In the course of his practice, Charles-Hugo participates in planning, analyzing and implementing tax structures and strategies as part of major commercial transactions, both in Canada and abroad. “Both local businesses and international companies turn to Lavery when they need solutions to their most complex issues. For a young lawyer, this translates into a remarkable diversity of mandates and makes it possible to work on major cases while staying grounded in the business reality of entrepreneurs. It is this plurality of exposure combined with the partners’ commitment to the advancement of their junior peers that convinced me to join Lavery. Such proximity to exceptional mentors fosters better transmission of knowledge, forges more competent lawyers and ultimately makes the firm stronger.” When I joined this team, which places great emphasis on competence and excellence but values collegiality and collaboration just as much, I immediately knew that I was in the right place and that I aspired to grow within Lavery. When starting a career, it’s important to surround yourself with accomplished professionals, but also with people who inspire you. That’s what I found at Lavery. Stephanie-Ann Morgan Stephanie-Ann is a member of the firm’s Business Law Group, and her practice focuses primarily on real estate, transactional and financing law. She represents owners, financial institutions, government entities, landlords and tenants in purchasing and selling, real estate financing and leasing transactions. “I was looking for a stimulating professional environment that values collaborative work and individual initiative. Working at Lavery Lawyers will be an opportunity to contribute to a large firm with a long-standing reputation in the legal industry and to be able to serve a diverse and prominent client base.”