An investment fund aimed at creating jobs for First Nations people in Saskatchewan provided few employment opportunities and lost millions of taxpayers’ dollars.
According to recent financial statements, the Government of Saskatchewan lost $8.5 million through its First Nations and Metis Fund (FNMF) which was set up in 2006 under the Lorne Calvert government. The Saskatchewan Party took over the fund between 2007 to 2019.
“It was a high risk, but we had to do something to encourage First Nations across the province to get involved and be involved in the full economy of the province,” said Crown Investment Corporation (CIC) Minister Joe Hargrave.
The investments were set up similarly to venture capital funds. The government paid Saskatoon’s Westcap Management Ltd. around $3 million to manage the money without an expectation to achieve a rate of return, said Hargrave.
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“The goal of this fund was not to be a moneymaker to provide revenue for the government. This was a fund to help First Nation and Metis communities,” Hargrave said.
Cindy Ogilvie, vice-president and chief financial officer of CIC, said the investments were similar to being a “lender of last resort.”
They were a matter of public policy as private-sector lenders were not interested, said Ogilvie.
However, it’s unclear if the government knew this as a loss proposal.
At a March 4 committee meeting, Ogilvie stated there’s an informal rule that venture capital investments fail around eight out of 10 times, while the others come with “fairly strong returns because of the high-risk nature of them.”
But no investments brought in revenue, which Hargrave now blames on the economy.
In one investment, the FNMF provided $1.8 million to Infinite, who used that money to invest in Brigden Welding, which was owned by a former Sask Party MLA’s son. Four jobs were created, two of which went to Metis people. The company is only required to pay back $250,000 of the $1.8 million government loan.
Muskowekwan Resources Ltd. received a $3 million loan to invest in Encanto, a potash company. Over 250 jobs were promised, but zero were created. The company is required to pay back only $300,000 of the $3 million loan.
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The Government of Saskatchewan is unsure how many jobs were created through the FNMF, but Hargrave estimates it’s somewhere around 80 to 160.
CIC critic Cathy Sproule says the FNMF served as a “slush fund” because there was no accountability and little money was paid back to the government.
While the government was losing millions, Westcap – which is owned by a top Saskatchewan Party donor – was making millions to manage the money, said Sproule.
“We’re talking about lost taxpayers dollars here,” said Sproule, who’s the MLA for Saskatoon Nutana. “That might be a couple schools, a hospital or a long-term care home in La Ronge.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
