Guide to Slips 11 – Flow-Through Shares

About this content

This content is a simplified rewording of Revenu Québec’s official publication: RL-11.G(2025-10).pdf, produced to help citizens and entrepreneurs better understand their tax obligations. It does not constitute legal or tax advice. Refer to the official document for any decision.

Who this document is for

This guide is intended mainly for development corporations that issue flow-through shares and that must file slips 11 as well as the form Waiver of Expenses or Allocation of Assistance Amounts by a Corporation (RL-11.S). It is also intended for the people or organizations that prepare these documents for a development corporation, notably when the corporation:

• has undertaken in writing with investors to issue flow-through shares;
• incurs Canadian exploration expenses or Canadian development expenses;
• renounces those expenses in favour of the investors;
• allocates assistance amounts related to those expenses to those investors;
• corrects expenses already waived;
• renounces certain share issue expenses in favour of an individual or a partnership of which at least one member is an individual. The investors concerned are referred to in the guide as the beneficiaries of the waiver.

Context and purpose

The document explains how to prepare slip 11 in the tax context of flow-through shares. A flow-through share allows a development corporation to transfer to investors certain eligible resource-related expenses, so that those investors can use them in their own tax calculation.

The guide specifies:

• who must prepare slip 11;
• which forms must be filed with the slip;
• which expenses may be waived or allocated;
• which deadlines must be respected;
• how to complete each box on the slip;
• how to report assistance amounts;
• how to amend or cancel a slip;
• which penalties may apply;
• how to file form RL-11.S;
• how to make payments related to penalties or special taxes. The guide applies to the year 2025 and subsequent years, as long as no administrative or legislative change requires a new version. The legislative references indicated in the document refer notably:
• to the Tax Administration Act, when the references are preceded by LAF;
• to the Taxation Act, when no special mention accompanies the numbers;
• to the Taxation Regulations, when the numbers contain the letter R;
• to the Act respecting the legal framework for information technology, when the references are preceded by LCCJTI. The document also specifies that it does not constitute a legal interpretation of the Taxation Act or of any other act.

Complete and detailed information

Main change for 2025

Abolition of certain additional deductions relating to Québec resources

The 2025–2026 budget provides for the elimination of two additional deductions:

• the additional deduction relating to certain exploration expenses incurred in Québec;

• the additional deduction relating to certain surface mining exploration expenses incurred in Québec. These changes apply to flow-through shares issued after March 25, 2025, except in the following two situations:

• the flow-through shares are issued before January 1, 2026 following an application for an interim prospectus receipt made no later than March 25, 2025;

• the flow-through shares are issued following an announcement made no later than March 25, 2025, and the offering memorandum filing form was submitted to the Autorité des marchés financiers no later than May 31, 2025. Amounts still eligible for these additional deductions may be shown:

• in box D of slip 11;

• in box E of slip 11.

1. General information

1.1 Obligation to file slip 11

A development corporation must file slip 11 when it has entered into a written agreement with investors under which it:

• will issue flow-through shares;
• will incur Canadian exploration expenses or Canadian development expenses;
• will renounce those expenses in favour of the investors. Slip 11 must be given to all concerned investors, that is, to the beneficiaries of the waiver, in order to provide them with information relating to the following:
• the waiver of expenses incurred from the date of the agreement until the end of the 24th month following the month in which the agreement was entered into;
• the possibility that this waiver may be made at any time before the beginning of the month of March of the calendar year following that period;
• the allocation of assistance amounts received by the corporation or to which it was entitled as agent in relation to the expenses concerned;
• the correction of expenses previously waived, notably under the look-back rule or at the minister’s request;
• the reporting of share issue expenses that the corporation renounces in favour of an individual or of a partnership of which an individual is a member, when that person holds flow-through shares. Cited references: sections 359.1 to 359.5, 359.8, 359.10, 359.12, 359.12.0.1, 726.4.17.12, 1086R42 and 1086R43.

1.2 Related forms

Form CO-359.10

When a development corporation prepares an issuance notice for flow-through shares or enters into a written agreement to issue them, it must file the form:

• Information Return Concerning Flow-Through Shares (CO-359.10).

Form RL-11.S

Before preparing slips 11, the following form must be completed:

• Waiver of Expenses or Allocation of Assistance Amounts by a Corporation (RL-11.S). The data entered on form RL-11.S are then used to allocate the expenses and assistance amounts among the investors for whom slips 11 are prepared.

Form CO-726.4.17.15

When the corporation uses slip 11 to report share issue expenses that it has renounced in favour of:

• an individual;
• or a partnership of which an individual is a member; it must first have made that waiver using the form:
• Summary of Waiver of Certain Issue Expenses Relating to Québec Resources (CO-726.4.17.15).

2. Definitions

Flow-through share

A flow-through share is a share referred to in section 359.1 of the Taxation Act. It is a share:

• issued by a development corporation;
• acquired by an investor;
• acquired pursuant to a written agreement;
• for which the corporation undertakes to incur Canadian exploration expenses or Canadian development expenses;
• for which the corporation renounces the deduction of those expenses so that they are allocated to the investor;
• up to the amount of the consideration paid by the investor to acquire the share.

Canadian development expenses and accelerated Canadian development expenses

These expenses correspond to the expenses referred to in section 408 of the Taxation Act.

Issue expenses

Issue expenses are the expenses incurred in connection with the issuance of flow-through shares and that may be waived under section 726.4.17.12 of the Taxation Act.

Canadian exploration expenses

These expenses correspond to the expenses referred to in section 395 of the Taxation Act. They also include Canadian renewable energy and energy conservation expenses.

Exploration expenses in Québec

These are the exploration expenses referred to in subparagraph i of paragraph a of section 726.4.10 of the Taxation Act.

Exploration expenses in Northern Québec

These are the exploration expenses incurred by a corporation in Northern Québec and referred to in paragraph a of section 726.4.17.20 of the Taxation Act.

Surface mining exploration expenses or oil or gas exploration expenses in Québec

These expenses are those referred to in paragraph a of section 726.4.17.2 of the Taxation Act.

Canadian renewable energy and energy conservation expenses

These expenses are defined in section 399.7R1 of the Taxation Regulations.

Deemed Canadian exploration expenses

These are certain development expenses, notably:

• drilling expenses;
• conversion expenses;
• well completion expenses;
• temporary access road construction expenses. These expenses are referred to in section 359.2.1 of the Taxation Act and, under section 359.3, are deemed to be Canadian exploration expenses incurred by the investors.

Assistance amount

An assistance amount is an amount received or receivable from a person, a government, a municipality or another administration, unless it is a prescribed amount. It may notably take the form of:

• a premium;
• a grant;
• a rebate;
• a conditional repayment loan;
• a reduction in royalties;
• a tax reduction;
• an investment allowance;
• any other assistance or benefit. Cited reference: section 359 c.0.1.

Development corporation

A development corporation is a corporation whose principal activity includes one or more of the following activities:

• produce, refine or market oil, petroleum derivatives or natural gas;
• search for oil or natural gas by means of exploration or drilling work;
• extract minerals or search for minerals through exploration;
• process ore in order to extract metals or minerals from it;
• process or market metals or minerals extracted from ore it processes;
• manufacture metals;
• operate a pipeline used to transport oil or gas;
• produce or market calcium chloride, sodium chloride, gypsum, kaolin or potash;
• manufacture products that require the processing of calcium chloride, sodium chloride, gypsum, kaolin or potash;
• produce or distribute energy, or produce fuel, using property included in category 43.1 or 43.2 of Schedule B to the Taxation Regulations;
• develop projects for which it is reasonable to expect that at least 50% of the capital cost of depreciable property used in each project will correspond to the capital cost of property included in category 43.1 or 43.2 of Schedule B to the Taxation Regulations. A corporation may also be considered a development corporation when its assets consist, wholly or almost wholly, of shares or debts of one or more related development corporations.

Cited reference: section 363.

3. Filing slip 11

3.1 Filing deadline

Waiver of resource-related expenses

To waive resource-related expenses, the development corporation must file:

• form RL-11.S;
• slips 11. These documents must be filed before the end of the month following the month in which the waiver was made.

Late filing accepted

A late filing may be accepted and considered to have been filed within the time prescribed by law if the following two conditions are met:

• the filing takes place:
• either within 90 days after the end of the normal deadline, that is, no later than the last day of the month following the month in which the waiver was made;
• or after that period, if Revenu Québec considers that it would be fair and equitable to allow the filing in the circumstances;
• the corporation encloses payment of the applicable penalty with the documents.

Allocation of assistance amounts

To allocate to investors assistance amounts that the corporation received or was entitled to receive as agent, the corporation must file:

• form RL-11.S;
• slips 11. The deadline is as follows: the documents must be filed before the end of the month following the month in which the corporation first learned that a person holding one of its flow-through shares was entitled to a share of those assistance amounts. The same late-filing conditions as for a waiver of resource-related expenses apply. Cited references: sections 359.12, 359.12.0.1 and 359.12.1.

Reduction of expenses already waived

When a corporation must reduce expenses that have already been waived:

• under the look-back rule;
• or at the minister’s request; it must:
• file a new copy of form RL-11.S;
• properly complete Part 4 of that form;
• file amended slips 11. A penalty may apply if these documents are not submitted within the following time limits: | Situation | Deadline | |---|---| | Reduction made by the corporation concerning expenses waived under the look-back rule | No later than the last day of February of the second year following the year that includes the effective date of the waiver | | Reduction required by the minister | Within 30 days after the request is sent | Cited references: LAF 59 and section 359.15.

3.2 Method of filing

The information must be provided using the prescribed slip 11. The slip may be:

• obtained in paper form;
• prepared using a slip produced by computer;
• filed using software authorized by Revenu Québec;
• filed using software designed by the person or organization preparing the slips. When in-house software is used, certain requirements must be respected. The guide indicates that information on this subject can be found in the partners’ section of the Revenu Québec website. No financial compensation is granted to persons who provide their own slips. The guide also mentions that software used to prepare slips 11 in XML format may be certified.

3.3 Deadline for transmission

Before the filing deadline expires, you must:

• transmit slips 11 and form RL-11.S to Revenu Québec;
• transmit slips 11 to the beneficiaries of the waiver. Cited references: sections 1086, 1086R42 and 1086R43.

3.4 Transmitting slips 11 and form RL-11.S to Revenu Québec

If more than 5 slips 11 are prepared

When the corporation prepares more than 5 slips 11, transmission to Revenu Québec must be done obligatorily:

• by Internet;
• in an XML file.

If fewer than 6 slips 11 are prepared

When the corporation prepares fewer than 6 slips 11, transmission may be done:

• by Internet, in an XML file;
• or on paper. If the slips are prepared on paper, only copy 1 of each slip must be sent to Revenu Québec.

Paper slips and Internet transmission

If slips 11 are transmitted by Internet, copy 1 of the paper slips must not be transmitted. The corporation must, however, keep the slips:

• on a technological medium;
• or on paper; as applicable.

Transmission of form RL-11.S

Form RL-11.S must be transmitted:

• on paper;
• by mail. Cited references: 1086R65, LCCJTI 3, 28, 29 and 71.

3.5 Transmission of slips to the beneficiaries of the waiver

Transmission on paper

When the slips are prepared on paper, the corporation must give the beneficiaries copy 2 of the slips. This delivery may be made:

• in person;
• by mail;
• or by another means.

Electronic transmission

To transmit the slips electronically, the corporation must first obtain the beneficiary’s written consent. This consent may be transmitted:

• electronically;
• by mail;
• or by another means. The consent must clearly indicate that the beneficiary agrees to receive slip 11 electronically. The consent remains valid until the beneficiary informs the corporation that he or she wishes to revoke it. The corporation must also inform the beneficiary of the available means to withdraw consent.

Obligations related to electronic transmission

When it transmits the slips electronically, the corporation must notably:

• protect the beneficiaries’ personal information;
• be able to verify the identity of each person who gives consent;
• ensure that the format of the transmitted slip 11 prevents the modification of the information it contains. Cited reference: section 1086R70.

3.6 Amendment or cancellation of a slip

Slip transmitted by Internet

To amend or cancel a slip already transmitted by Internet, follow the instructions in the guide:

• Preparer’s Guide – Slips (ED-425). Amended or cancelled slips 11 may be transmitted by Internet.

Amending a slip transmitted on paper

To amend a slip already transmitted on paper, prepare a corrected slip using the slip 11 in screen-fillable PDF format. The corrected slip must contain:

• the word “Amended”;
• the letter A in the “Slip code” box;
• the corrected amounts in the appropriate boxes;
• the unchanged amounts copied into the other boxes of the slip already transmitted;
• in the box “Last slip no. transmitted”, the number that appeared in the upper-right corner of the slip to be amended.

Cancelling a slip transmitted on paper

To cancel a slip already transmitted on paper, you must:

• make a photocopy of the last slip transmitted;
• write the word “Cancelled” on it;
• enter the letter D in the “Slip code” box;
• ensure that the number written in the upper-right corner of the slip remains legible.

Amended RL-11.S form required

Whenever a slip 11 is amended or cancelled, an amended RL-11.S form must be filed, regardless of the method used to transmit the documents.

3.7 Penalties

A development corporation may have to pay a penalty notably in the following situations:

• it waives resource-related expenses late;
• it files slips 11 late;
• it files form RL-11.S late;
• it prepares more than 5 slips 11 and does not transmit them by Internet.

Calculation of the penalty for late filing or late waiver

The penalty to be entered on form RL-11.S in respect of:

• late filing of form RL-11.S and slips 11;
• or a late waiver; corresponds to the lesser of the following two amounts:

1. $15,000;
2. the greater of the following two amounts:

• $100;
• 0.25% of the amount concerned. The amount used to calculate 0.25% depends on the situation:
• for a penalty related to late filing of form RL-11.S and slips 11, use the amount of the expenses or the assistance amount concerned;
• for a penalty related to a late waiver, use the amount waived by the corporation. This penalty must be calculated in form RL-11.S only if:
• form RL-11.S is filed late;
• slips 11 are filed late;
• or the corporation waives expenses late.

Example of penalty calculation

A development corporation waives $1,000,000 of Canadian exploration expenses for the year concerned and files slips 11 late.

The calculation is as follows:

Step	Calculation	Result
Calculation of 0.25% of the expenses	$1,000,000 × 0.25%	$2,500
Comparison with $100	greater amount between $100 and $2,500	$2,500
Comparison with $15,000	lesser amount between $2,500 and $15,000	$2,500
The penalty to be entered on form RL-11.S is therefore $2,500.

Penalty for missing information

When a corporation prepares slip 11, it must make reasonable efforts to obtain the required information. If it omits to provide a required piece of information, it may incur a penalty of $100. Cited references: LAF 59, 59.0.0.3, 59.0.0.4, 59.0.2 and section 359.12.2.

4. How to complete slip 11

The requested information must be entered on slip 11. Boxes for which no information must be provided must be left blank.

4.1 Description of the boxes

4.1.1 Box “Year”

Enter the calendar year to which the amounts shown on the slip relate.

4.1.2 Box “Slip code”

The code depends on the type of slip:

Code	Meaning
R	Original slip
A	Amended slip
D	Cancelled slip

4.1.3 Box “Last slip no. transmitted”

This box must be completed when an amended slip is prepared. Enter the slip number that you want to amend in this box.

4.1.4 Boxes A and B – Canadian exploration expenses and Canadian development expenses

For each flow-through share, the amount of resource-related expenses to which a corporation may renounce cannot exceed the result of the following calculations:

1. the consideration received for the share, less the total of the expenses already waived in respect of that share up to the day of the waiver;
2. the total of all resource-related expenses incurred by the corporation up to the effective date of the waiver, less the total of the expenses already waived up to that same date in respect of other shares. Cited references: sections 359.2 and 359.4.

Box A – Canadian exploration expenses

Enter the amount of Canadian exploration expenses in box A. If the amount entered in box A includes expenses related to renewable energy and energy conservation incurred in Québec, indicate in a blank box:

• code A-1;
• the corresponding amount. If the amount in box A includes exploration expenses incurred in Québec that do not qualify for the additional deduction, indicate in a blank box:
• code A-2;
• the corresponding amount.

Box B – Canadian development expenses

Enter the amount of Canadian development expenses in box B. If the amount in box B includes development expenses in Québec, indicate in a blank box:

• code B-1;
• the corresponding amount. If the amount in box B includes accelerated Canadian development expenses, indicate in a blank box:
• code B-2;
• the corresponding amount.

4.1.5 Box D – Exploration expenses in Québec

Enter in box D only the amount of exploration expenses in Québec that qualifies for the 10% additional deduction relating to certain exploration expenses incurred in Québec. This additional deduction is abolished, except in the cases provided for, for flow-through shares issued after March 25, 2025. An individual may claim this additional deduction for exploration expenses incurred in Québec after March 25, 2025 only if one of the following situations applies:

• the flow-through shares were issued before March 26, 2025;
• the flow-through shares were issued after March 25, 2025, but before January 1, 2026, following an application for an interim prospectus receipt made no later than March 25, 2025;
• the flow-through shares were issued after March 25, 2025 following a public announcement made no later than that date, and the offering memorandum filing form was submitted to the Autorité des marchés financiers no later than May 31, 2025. The expenses indicated in box D are included in the amount in box A. Cited references: sections 726.4.9 to 726.4.17.

4.1.6 Box E – Surface mining exploration expenses or oil or gas exploration expenses in Québec

Enter in box E the amount of surface mining exploration expenses or oil or gas exploration expenses in Québec that qualifies for the 10% additional deduction. These expenses are included in the amount in box D. The same abolition and exception rules as those applicable to box D also apply to the 10% additional deduction relating to the expenses entered in box E. Cited references: sections 726.4.17.1 to 726.4.17.9.

4.1.7 Box F – Exploration expenses in Northern Québec

Enter the amount of exploration expenses in Northern Québec in box F. These expenses are included in the amount in box A. Cited references: sections 726.4.17.18 to 726.4.17.25.

4.1.8 Box G – Assistance amounts relating to the expenses entered in boxes A to F

Box G is used to enter the beneficiary’s share of the assistance amounts relating to the expenses indicated in boxes A to F. Enter the amounts in the appropriate sub-boxes:

• G (A);
• G (B);
• G (D);
• G (E);
• G (F).

Non-duplication rules

In the amount in box G (A), do not include:

• the assistance amount relating to the exploration expenses in Québec entered in box G (D);
• the assistance amount relating to the surface mining exploration expenses or oil or gas exploration expenses in Québec entered in box G (E);
• the assistance amount relating to the exploration expenses in Northern Québec entered in box G (F). However, in the amount in box G (D), include:
• the amount entered in box G (E);
• the amount entered in box G (F). This inclusion is necessary because the amounts in boxes G (E) and G (F) form part of the assistance amount relating to the exploration expenses in Québec indicated in box G (D).

4.1.9 Box H – Share issue expenses

Enter in box H the amount of share issue expenses that the corporation has waived in favour of a beneficiary. This waiver must have been made using form:

• CO-726.4.17.15.

Persons who may benefit from the waiver

The waiver of share issue expenses is permitted only in favour of:

• an individual;
• or a partnership of which at least one member is an individual.

Restriction concerning certain public offerings

A waiver of share issue expenses is not valid for a public share offering when:

• the application for an interim prospectus receipt or for a prospectus exemption is made after June 12, 2003;
• and it concerns a flow-through share acquired before March 31, 2004.

Calculation formula per beneficiary

Share issue expenses are calculated for each beneficiary using the following formula:

(A × B ÷ C) – D

where:

Element	Meaning
A	Total of the issue expenses waived by the corporation using form CO-726.4.17.15 and covered by slip 11
B	Total of Québec exploration expenses paid with the proceeds of the share issue and waived by the corporation in favour of the beneficiary up to the day of the waiver of issue expenses
C	Total of Québec exploration expenses paid with the proceeds of the share issue, or expenses that will likely be incurred in Québec and paid with those proceeds, waived or to be waived by the corporation in favour of the beneficiaries
D	Total of issue expenses already shown on slips 11 given to the beneficiary for the same issue

Limit applicable to the individual’s account

For the same share issue, the amount that an individual may add to his or her account relating to certain issue expenses can never exceed the following result:

Consideration paid by the individual to acquire the shares from that issue
–
total of the following expenses

The expenses to be subtracted are:

• all expenses that the corporation has waived, or will likely waive, in favour of the individual under sections 359.2 or 359.4 of the Taxation Act in relation to the shares from that issue;
• all issue expenses already shown on the individual’s slips 11 in relation to that share issue. This limit must be taken into account when determining the amount to enter in box H. Cited references: sections 726.4.17.10 and 726.4.17.11.

4.1.10 Box “Identification number assigned to form CO-359.10”

Enter the identification number assigned to the form:

• Information Return Concerning Flow-Through Shares (CO-359.10). This same number must also be entered on form RL-11.S. The number format is:

ACC – – –

4.2 Additional information

When additional information must be provided, use one of the blank boxes on the slip. Enter there:

• the appropriate code;
• then the corresponding amount or information.

Reworded example:

Code	Amount
A-1	1 400.68

Additional information codes

Code	Description	Part of the guide
A-1	Renewable energy and energy conservation expenses incurred in Québec	4.1.4
A-2	Exploration expenses incurred in Québec that do not qualify for the additional deduction	4.1.4
B-1	Development expenses in Québec	4.1.4
B-2	Accelerated Canadian development expenses	4.1.4

4.3 Identification information

4.3.1 Beneficiary of the waiver

Name and address of the beneficiary

Enter:

• the name of the beneficiary of the waiver;
• the beneficiary’s last known address;
• the postal code.

Social insurance number or identification number

If the beneficiary is an individual, enter his or her social insurance number. Otherwise, enter the identification number. The identification number consists of:

• 10 digits;
• followed by the file number. In the case of a corporation, the guide gives the example file number IC 0001.

4.3.2 Name and address of the development corporation

Enter:

• the name of the development corporation;
• its address.

4.3.3 Date on which the waiver takes effect

Enter the effective date of the waiver when the corporation:

• waives resource-related expenses;
• allocates to investors assistance amounts related to the expenses covered by the waiver;
• corrects expense amounts it waived in the past. The format shown on the slip is:

YYYY MM DD

5. Filing form RL-11.S

The development corporation must file form RL-11.S when it must inform Revenu Québec that it:

• waives resource-related expenses;
• allocates to investors assistance amounts that it received or was entitled to receive as agent. If the corporation does not file form RL-11.S for a waiver of resource-related expenses, Revenu Québec considers that no waiver occurred. If the corporation does not file this form to allocate assistance amounts to investors, it is deemed not to have incurred the part of the expenses corresponding to those assistance amounts. The corporation must also file form RL-11.S when it corrects expenses already waived. Corrections may notably concern:
• a reduction of expenses because part of them was not actually incurred;
• a reclassification between:
• exploration expenses, including deemed exploration expenses;
• development expenses. When making such corrections, the corporation must also issue amended slips 11 showing the corrected amounts.

5.1 Expenses that may be waived

General rule

As a general rule, expenses that may be waived must have been incurred no later than the effective date of the waiver. This date must be entered in Part 2 of form RL-11.S. It cannot be later than the date indicated in Part 6 of the form.

Look-back rule

An exception allows the corporation to waive expenses that will be incurred after the effective date of the waiver. In that case, those expenses are deemed to have been incurred by the investors on the effective date of the waiver. Cited references: sections 359.2, 359.2.1, 359.3, 359.4, 359.5, 359.12 and 359.12.0.1.

Early waiver for certain expenses

The corporation may waive certain expenses deemed to have been incurred on the last day of a calendar year, called the specified year, if the waiver is made in January, February or March of the following year, called the second year. The expenses concerned may be:

• certain exploration expenses under section 395 of the Taxation Act, including deemed exploration expenses;
• certain development expenses under section 408 of the Taxation Act; that the corporation expects to incur in Canada during the second year.

Conditions for using the look-back rule

All of the following conditions must be met:

• the share issuance agreement was entered into during the specified year;
• the shares to be issued were paid for in cash before the end of the specified year;
• the corporation and the investor benefiting from the waiver were not related to each other throughout the entire specified year;
• the corporation files form RL-11.S within the prescribed deadline;
• the waiver takes effect on the last day of the specified year.

Special tax if the expenses are not incurred in Québec as planned

For each month of the second year, except January, in which the corporation does not incur in Québec the expenses it is supposed to incur, it must pay a special tax. This tax is calculated using the table:

• Special tax on expenses deemed incurred in Québec; located in Part 5 of form RL-11.S.

Correction at the end of the second year

At the end of the second year, if the corporation has not yet incurred all the expenses it had waived in advance and that were to be incurred in Québec, it must correct the waiver to take into account the unincurred expenses.

Possible additional one-year period

An additional one-year period may be granted to the corporation if the Minister of Revenue considers that the delay is caused by circumstances beyond the corporation’s control. Even if this period is granted, the corporation must pay a special tax calculated under section 1129.60.1 of the Taxation Act. Cited references: sections 359.8, 359.8.1, 359.15, 1129.60 and 1129.60.1.

5.2 False statement or omission in a waiver or an assistance amount report

A penalty applies if the corporation, knowingly or in circumstances amounting to gross negligence:

• makes a false statement;
• omits information;
• consents to such an offence;
• participates in such an offence; in relation to:
• a waiver;
• or a report of assistance amounts. The penalty corresponds to 25% of the result of one of the following calculations, as applicable: | Situation | Calculation serving as the basis for the penalty | |---|---| | Excessive waiver | Amount on line 13 of form RL-11.S less the amount the corporation could actually waive at that time | | Expenses deemed incurred on the last day of the specified year | Same calculation, but only using information the corporation knew or should have known at the end of that year | | Assistance amounts | Assistance amount that had to be reported less the amount on line 21 of form RL-11.S | Cited references: LAF 59.3, sections 1049, 1049.0.1, 1049.0.1.0.1 and 1049.0.1.1.

6. Payment methods

Payments may be made:

• electronically, notably by Internet or through a financial institution;
• by mail, by cheque or money order made payable to the Minister of Revenue of Québec. When payment is made by cheque or money order, the corporation’s identification number must be written on the back if the corporation has one.

Payments of $10,000 or more

Any payment of $10,000 or more must be made electronically, unless special circumstances make this method of payment impossible. If this requirement is not respected, a penalty may apply.

Payment through a participating financial institution

When payment is made using the online services of a participating financial institution, the payment code shown on the remittance slip must be used:

• RLZ-11.P. To obtain this remittance slip, form RL-11.S must be completed:
• using software;
• or using the screen-fillable PDF. The remittance slip appears automatically at the bottom of the form if the following minimum information is completed:
• lines 01b and 09;
• and at least one of lines 20.6, 25.6 or 50.

Two separate RL-11.S forms in certain cases

Two separate forms RL-11.S must be completed if an amount payable by the corporation is entered both:

• in box 50;
• and in box 20.6 or 25.6.

Instructions for beneficiaries of the waiver

Slip 11 also contains instructions for the beneficiaries of the waiver. In these instructions, the term return means the Income Tax Return (TP-1).

Box A – Canadian exploration expenses

In calculating cumulative Canadian exploration expenses, the beneficiary must add the amount in box A after subtracting:

• the amount in box D;
• the amount in box G (A). The beneficiary may deduct on line 241 of the return up to 100% of the amount of his or her cumulative exploration expenses at the end of the taxation year. If, at the end of the taxation year, cumulative Canadian exploration expenses result in a negative amount, that amount must be reported as a resource deduction recovery on line 154 of the return. The minus sign (–) must not be entered.

Box B – Canadian development expenses

In calculating cumulative Canadian development expenses, the beneficiary must add the amount in box B after subtracting the amount in box G (B).

The beneficiary may deduct on line 241 of the return up to 30% of the amount of his or her cumulative development expenses at the end of the taxation year. If, at the end of the taxation year, cumulative Canadian development expenses result in a negative amount, that amount must be reported as a resource deduction recovery on line 154 of the return. The minus sign (–) must not be entered.

Box D – Exploration expenses in Québec

The amount in box D is part of cumulative Canadian exploration expenses and is included in the amount in box A. The beneficiary may deduct on line 250 of the return up to 100% of the amount in box D, after subtracting the amount in box G (D). The beneficiary must also add to his or her account relating to certain exploration expenses in Québec an amount corresponding to:

10% × (box D – box G (D))

He or she may deduct on line 287 of the return up to 100% of the balance of this account at the end of the taxation year.

Box E – Surface mining exploration expenses or oil or gas exploration expenses in Québec

The beneficiary must add to his or her account relating to certain surface mining exploration expenses or oil or gas exploration expenses in Québec an amount corresponding to:

10% × (box E – box G (E))

He or she may deduct on line 287 of the return up to 100% of the balance of this account at the end of the taxation year.

Box F – Exploration expenses in Northern Québec

The additional deduction relating to the expenses in box F may be claimed only by a corporation.

Box G – Assistance amounts

Each amount entered in box G must be subtracted from the amount of the expenses to which it relates.

Box H – Share issue expenses

The beneficiary must add the amount in box H to his or her account relating to certain issue expenses. He or she may deduct on line 297 of the return up to 100% of the balance of this account at the end of the taxation year.

Notice to beneficiaries that are corporations

If a beneficiary corporation receives a slip 11 on which an amount appears in box A or B, it must complete form:

• Resource Deduction (CO-400). If an amount appears in box F, it must complete the form:
• Additional Deduction Relating to Certain Exploration Expenses Incurred in the Middle North and the Far North of Québec (CO-726.4.17.19).

Additional information for beneficiaries

Code	Effect or clarification for the beneficiary
A-1	Renewable energy and energy conservation expenses incurred in Québec. The guide to the return at line 260 contains the applicable information.
A-2	Exploration expenses incurred in Québec that do not qualify for the additional deduction. The guide to the return at line 260 contains the applicable information.
B-1	Development expenses in Québec. The guide to the return at line 260 contains the applicable information.
B-2	Accelerated Canadian development expenses. These expenses entitle the beneficiary to a deduction on line 241 of the return.

Special cases and exceptions

Exceptions to the abolition of Québec additional deductions

The additional deductions related to the expenses entered in boxes D and E are abolished for flow-through shares issued after March 25, 2025, unless:

• the shares are issued before January 1, 2026 following an application for an interim prospectus receipt made no later than March 25, 2025;
• or the shares are issued following an announcement made no later than March 25, 2025, with the offering memorandum filing form submitted to the Autorité des marchés financiers no later than May 31, 2025.

Expenses incurred after the effective date of the waiver

The general rule requires that the expenses be incurred no later than the effective date of the waiver. The look-back rule nevertheless allows certain expenses that will be incurred after that date to be waived, if all the prescribed conditions are met.

Failure to file form RL-11.S

If form RL-11.S is not filed for a waiver of resource-related expenses, the waiver is considered non-existent. If the form is not filed to report assistance amounts, the corporation is deemed not to have incurred the part of the expenses corresponding to those assistance amounts.

Correction of waived expenses

Corrections must be made notably if:

• waived expenses were ultimately not incurred;
• expenses must be reclassified between exploration expenses and development expenses;
• expenses waived in advance under the look-back rule are not all incurred by the end of the second year;
• the minister requires a reduction.

Additional one-year period

An additional one-year period may be granted when the Minister of Revenue considers the delay to be attributable to circumstances beyond the corporation’s control. Even in that case, a special tax calculated under section 1129.60.1 may be required.

Electronic transmission to beneficiaries

Electronic transmission of a slip to the beneficiary is possible only if the beneficiary has given valid written consent. The consent remains in effect until it is revoked.

Restriction specific to share issue expenses

The waiver of share issue expenses is permitted only in favour of:

• an individual;
• or a partnership with at least one individual as a member. It is excluded in the specific case of a public offering whose application for an interim prospectus receipt or prospectus exemption is made after June 12, 2003 in respect of a flow-through share acquired before March 31, 2004.

Payments of $10,000 or more

A payment of $10,000 or more must be made electronically, unless impossible due to special circumstances.

Filing of more than 5 slips 11

If more than 5 slips 11 are prepared, they must be transmitted to Revenu Québec by Internet in XML format.

Steps and procedures

Step 1 – Determine whether the corporation must file slip 11

The corporation must file slip 11 if it:

1. is a development corporation;
2. has entered into a written agreement to issue flow-through shares;
3. incurs or plans to incur eligible expenses;
4. waives those expenses in favour of investors;
5. allocates assistance amounts to those investors;
6. corrects amounts already waived;
7. or reports share issue expenses waived in favour of an eligible beneficiary.

Step 2 – File the required related forms

Depending on the situation, the corporation must file:

Form	Use
CO-359.10	Information Return Concerning Flow-Through Shares
RL-11.S	Waiver of Expenses or Allocation of Assistance Amounts by a Corporation
CO-726.4.17.15	Waiver of Certain Issue Expenses Relating to Québec Resources
RLZ-11.P	Remittance slip used for certain payments, generated with form RL-11.S

Step 3 – Complete form RL-11.S before slips 11

Form RL-11.S must be completed before slips 11. The amounts on RL-11.S are used to allocate expenses and assistance amounts among the investors.

Step 4 – Complete slip 11

Complete the applicable boxes:

Box	Information to enter
Year	Relevant calendar year
Slip code	R, A or D
Last slip no. transmitted	Number of the replaced slip, if the slip is amended
A	Canadian exploration expenses
B	Canadian development expenses
D	Exploration expenses in Québec qualifying for the 10% additional deduction
E	Surface mining exploration expenses or oil or gas exploration expenses in Québec qualifying for the 10% additional deduction
F	Exploration expenses in Northern Québec
G	Assistance amounts relating to the expenses entered in boxes A to F
H	Waived share issue expenses
CO-359.10 identification number	Number in the format ACC – – –
Additional information	Codes A-1, A-2, B-1 or B-2, as needed
Beneficiary identity	Name, address and social insurance number or identification number
Corporation identity	Name and address of the development corporation
Effective date	Date in format YYYY MM DD

Step 5 – Respect the deadlines

Situation	Deadline
Waiver of resource-related expenses	Before the end of the month following the month in which the waiver was made

| Allocation of assistance amounts | Before the end of the month following the month in which the corporation first learned that a flow-through share holder was entitled to a share of the assistance amounts | | Reduction under the look-back rule | No later than the last day of February of the second year following the year including the effective date of the waiver | | Reduction requested by the minister | Within 30 days after the request is sent | | Late filing accepted | Within 90 days after the normal deadline expires, or later if accepted as fair and equitable, with payment of the penalty |

Step 6 – Transmit the documents to Revenu Québec

Slips 11 must be transmitted:

• by Internet in XML format if more than 5 slips are prepared;
• by Internet or on paper if fewer than 6 slips are prepared. Form RL-11.S must be transmitted on paper.

Step 7 – Give the slips to the beneficiaries

The corporation must transmit the appropriate copy to the beneficiaries:

• on paper, in person, by mail or otherwise;
• or electronically, only if the beneficiary has given written consent.

Step 8 – Amend or cancel a slip if needed

To amend a paper slip:

1. prepare a corrected slip in fillable PDF format;
2. write “Amended”;
3. enter code A;
4. enter the corrected amounts;
5. copy the unchanged amounts;
6. enter the number of the replaced slip in the designated box. To cancel a paper slip:
7. photocopy the last slip transmitted;
8. write “Cancelled”;
9. enter code D;
10. keep the slip number legible. In all cases, an amended RL-11.S form must also be filed.

Step 9 – Make any applicable payments

Payments may be made:

• electronically;
• or by cheque or money order. Payments of $10,000 or more must be made electronically, unless impossible due to special circumstances.

Important warnings

• The guide does not constitute a legal interpretation of the Taxation Act or of any other act.
• The document applies to year 2025 and subsequent years, unless a new version is published as a result of administrative or legislative changes.
• The additional deductions related to certain Québec expenses are abolished for flow-through shares issued after March 25, 2025, except for specific exceptions.
• If form RL-11.S is not filed for a waiver, the waiver is considered not to have occurred.
• If form RL-11.S is not filed to allocate assistance amounts, the corporation is deemed not to have incurred the expenses corresponding to those assistance amounts.
• Late filing may result in a penalty, calculated according to a formula that may reach $15,000.
• A penalty of $100 may apply when a required piece of information is omitted despite the obligation to make reasonable efforts to obtain it.
• A penalty of 25% may apply in the case of a false statement or an omission made knowingly or in circumstances amounting to gross negligence.
• A corporation that prepares more than 5 slips 11 must transmit them by Internet in XML format.
• A payment of $10,000 or more must be made electronically, unless impossible due to special circumstances.
• The beneficiary’s written consent is mandatory before any electronic transmission of slip 11.
• Slips transmitted electronically must be in a format that prevents modification of the information.
• Beneficiaries’ personal information must be protected.
• Corrections or cancellations of slips always require the filing of an amended RL-11.S form.
• If expenses waived in advance under the look-back rule are not incurred as planned, a special tax may apply and corrections may be mandatory.
• When an individual must report a negative cumulative expense amount as a recovery on line 154, the minus sign (–) must not be entered.

Summary

Slip 11 is used to inform investors of resource-related expenses, assistance amounts and certain share issue expenses that a development corporation allocates to them in the context of flow-through shares. The corporation must generally file form RL-11.S and slips 11 before the end of the month following the waiver or the allocation of assistance amounts, with special rules in case of late filing, correction or look-back. The Québec additional deductions related to boxes D and E are abolished for shares issued after March 25, 2025, except for exceptions covering notably certain issues before January 1, 2026 or announced no later than March 25, 2025. Boxes A, B, D, E, F, G and H each have specific rules for calculation, inclusion and reduction, notably to avoid double counting assistance amounts. More than 5 slips 11 must be transmitted by Internet in XML format, while form RL-11.S must be transmitted on paper. Beneficiaries use the amounts on the slip in their return, notably on lines 154, 241, 250, 287 and 297 depending on the nature of the expenses. Penalties may apply in the case of delay, omission of information, false statements, non-compliant transmission or payment of $10,000 or more not made electronically when required. Any amendment or cancellation of a slip 11 also requires filing an amended RL-11.S form.