Investment

Minister says money-losing investment fund wasn't meant to make money – Regina Leader-Post

Published

5 years ago

March 5, 2020

CIC Minister Joe Hargrave defended the First Nations and Metis Fund — a major focus of NDP attack — by saying it created “engagement” rather than jobs or profit.

Minister Responsible for SGI Joe Hargrave speaks about the upcoming changes to distracted driving penalties coming into effect Feb. 1, 2020.

TROY FLEECE / Regina Leader-Post

The provincial government is defending an investment fund that lost more than $8 million by saying it was never meant to earn money, but to engage Indigenous people in the economy.

The Saskatchewan NDP challenged Crown Investment Corporation Minister Joe Hargrave to account for the loss to taxpayers in what Opposition critic Cathy Sproule called a “slush fund.”

During three hours of questioning in the Crown and Central Agencies Committee on Wednesday, Hargrave could point only to a handful of jobs created by some of the multi-million-dollar investments from the First Nations and Metis Fund.

One, worth about $1.8 million, eventually reached a welding company and was later written down to $250,000. It created four jobs, only two of which went to Indigenous people.

Another, which funded a risky $3-million potash investment, is now essentially worthless. It created no jobs, though Hargrave noted that it could have created many had it been successful.

“It wasn’t just about jobs,” Hargrave said Thursday. “It was about engagement.”

The government paid Westcap Management Ltd. a total of $3 million for that engagement. That includes additional money Westcap earned by managing a fund within the fund created in 2011.

Hargrave argued that creating that fund, referred to as the business development fund, was the right decision, even though Westcap was already being paid to manage just a handful of loans.

He noted that three of four investments made through the business development fund were largely or entirely paid back.

The fourth lost all but $200,000 of a $700,000 loan, with Hargrave blaming a downturn in the oil industry.

But Hargrave said the government wasn’t looking to earn a profit off the funds.

“We’re not doing these programs to make money,” he said, again pointing to engagement of First Nations people.

“We’d love to break even.”

All told, Hargrave estimated that somewhere between 84 and 185 jobs were created through the First Nations and Metis Fund, though he was unable to say how many of those stemmed from loans made under the previous NDP government.

Sproule spent much of Wednesday evening challenging Hargrave on the loans that flowed to the welding and potash companies.

She accused the government of a “gamble” with taxpayer dollars, and argued that shareholders came out better than taxpayers.

“What does the minister have to say to taxpayers who have been left holding the bag?” she added on Thursday.

Hargrave has defended the loans by noting they weren’t provided directly to the welding and potash companies, but to a First Nation-controlled firms that invested in them.

But Sproule suggested that, one, at least, seems like a shell company. Its primary shareholder is a numbered company and its current director has little notion of its operations, she said.

In her view, that speaks “volumes” about the investment.

When contacted by the Leader-Post, the director of Infinite Investment, Wendy Gervais, said she has no idea where assets related to the fund’s investment are currently located. But she also noted that she only recently became a director.

Sproule said that throws Hargrave’s whole argument into question.

“Creating a numbered company and calling it an investment company, I don’t think it’s fair to call that engagement,” said Sproule.

“This is beyond belief,” she added.

Sproule has pointed out that some of those connected to the loans have links to the Saskatchewan Party. Westcap CEO Grant Kook has donated to the party, for instance.

Sproule has faulted the government for failing to produce him at committee for a more detailed account of his investment decisions.

Hargrave said the government isn’t giving up on getting back some of the money lost through the fund.

“We’re trying to make sure that we put ourselves in a position where we can recover as much of those funds as we can,” Hargrave said.

awhite-crummey@postmedia.com

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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