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WE Charity still sitting on $40M in Toronto real estate that was to be sold for endowment fund – National Post

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Marc and Craig Kielburger, the co-founders of the WE empire, are set to testify before the House of Commons ethics committee as soon as Monday

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Six months after WE Charity announced it would sell off its Canadian assets to create an endowment fund for its humanitarian programs abroad, more than $40 million in Toronto real estate remains with the charity organization.

Last September, after months of being at the centre of a major government controversy over the outsourcing of a student grant program to WE, the charity announced it was winding down its Canadian operations and selling its Canadian assets.

By far, the most significant of the assets owned by WE Charity in Canada is a large real estate portfolio — a block of commercial properties in downtown Toronto, one of the country’s hottest real estate markets.

“COVID-19 significantly disrupted WE Charity programming. The fallout from the Canada Student Service Grant has placed the charity in the middle of political battles and misinformation that a charity is ill-equipped to fight,” said a statement from the organization back on Sept. 9, 2020.

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The organization will be selling its assets to establish an endowment fund to sustain the charity’s existing international humanitarian programs

“The organization will be selling its assets to establish an endowment fund to sustain the charity’s existing international humanitarian programs and digitize its Canadian educational resources for long-term access.”

The September statement said the assets the charity would be selling included its headquarters — the WE Global Learning Centre in downtown Toronto — as well as nearby properties “acquired as part of a capital campaign to support the organization’s ‘Campus for Good,’ a redevelopment initiative to provide free space to incubate under-35 change-makers.”

But a land records search shows that of the nine properties National Post has been able to link to the charity and its affiliate organizations, none have changed hands since the September announcement.

National Post was also unable to locate real estate records suggesting the properties have been publicly listed for sale, despite searches of MLS by two real estate agents.

Neither WE, nor lawyers working on its behalf, responded to multiple requests for comment from National Post about the properties and their plans to sell them to fund the endowment.

But shortly after publishing a version of this story, WE Charity responded that it remains its intention to sell its properties and has listed them for sale with Colliers International in Toronto.

The charity sent a Colliers brochure of the listing for the WE headquarters building, which did not provide details on pricing, selling or listing dates. The charity declined to provide further information about its property sales, including: prices, dates when the properties would be listed on MLS, or a list of properties that are for sale with Colliers. WE said the charitable properties have been listed since October with Colliers.

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“This is all the information we can provide at this time,” the charity’s press office said.

WE Charity has been asked to appear before two of three parliamentary committees looking into the no-bid contract awarded to the organization by the Liberal government late last spring to administer a $912-million student grant program. The matter is also undergoing investigation by the federal ethics commissioner.

Marc and Craig Kielburger, the co-founders of the WE empire, are set to testify before the House of Commons ethics committee as soon as Monday.

  1. Screen capture of Prime Minister Justin Trudeau as he testified on the WE scandal on Thursday, July 30, 2020.

    Rex Murphy: Finally we might get answers to the Trudeau-WE Charity scandal

  2. Reed Cowan testified that We Charity replaced his plaque with that of another donor on a Kenyan school meant to honour his dead son.

    Donor says he raised hundreds of thousands for WE in honour of dead son — and they removed his name

The studies have largely focused on the Liberal government’s — and Prime Minister Justin Trudeau’s family’s — close ties to the charity.

Committees studying the affair have also heard from Reed Cowan, a U.S. donor, who said a school in Kenya that he had funded in honour of his late son later bore another donor’s name.

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CBC News has also recently reported on multiple instances where the WE organization allegedly assured multiple donors that they had each funded the entirety of an infrastructure project in Africa. WE has denied these allegations.

The RCMP, the Canada Revenue Agency and the U.S. Internal Revenue Service have been called on to investigate the WE organization.

Last July, National Post reported the charity and its affiliates owned tens of millions of dollars in property in Toronto, which made up the bulk of its assets. The WE empire, founded by the Kielburger brothers 25 years ago, is a complex web of entities, including the non-profit WE Charity, ME to WE Social Enterprises, a for-profit organization to fund WE’s charitable operations, and the ME to WE Foundation, the U.S. wing of the operation. There is also ME to WE Asset Holdings Inc., a private, “non-operating entity, which holds ME to WE’s assets,” according to Victor Li, WE Charity’s chief financial officer.

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According to audited financial statements published in March 2019 — the most recent available — as of Aug. 31, 2018, the land, buildings and properties owned by WE Charity were valued at $42 million. Additional land and buildings owned by ME to WE Foundation were valued at $1.6 million. WE Charity’s total audited assets at the time were $62.5 million.

WE Charity’s website says the release of its 2019 audited financial statements have been delayed because of COVID-19.

Going forward, there will be no new schools, water or agricultural projects, and no expansion to new communities in the nine countries where WE Charity is active

While unusual for a charity to have the bulk of its assets amassed in real estate, the WE organization stated this was a deliberate strategy to operate efficiently and avoid office leasing and rental costs.

The charity confirmed to National Post last July that all of its real estate is within a “single block near Regent Park/Moss Park” in Toronto.

The properties include the WE Global Learning Centre, the organization’s 40,000-square-foot headquarters at 339 Queen St. East and Parliament Street that the latest financial statements said is worth more than $30 million. This was the property on the Colliers brochure viewed by National Post

Other nearby properties owned by the organization include ME to WE’s offices at 319 Queen St. East (also written as 145 Berkeley St), 323 Queen St. East, 329 Queen St. East, 331 Queen St. East, 334 Queen St. East, 135 Berkeley St., 139 Berkeley St., and 141 Berkeley St.

Four of the nine addresses linked to WE — 319 Queen St. East, 323 Queen St. East, 139 Berkeley St., and 141 Berkeley St. — were added to the city of Toronto’s Heritage register in December, a move that could complicate the sale of those properties.

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The addition of the four WE-linked properties to the register came amidst the broader addition of 257 addresses in Toronto’s Corktown, Moss Park and St. Lawrence neighbourhoods, the result of a multi-year study by the city. The charity said it was unaware of the decision to add its properties to Toronto’s heritage register.

“If you’re on the list it’s kind of like having a yellow flag or red flag beside the property,” said Kae Elgie, president of Architectural Conservancy Ontario.

It means that if an owner planned to demolish or renovate the property, the city might get involved to halt it or to further protect the property. The property owners, too, could elect to have the properties protected by the Ontario Heritage Act, which would make them eligible for grants and tax rebates. The WE headquarters at 339 Queen St. East is already a Heritage-protected property, and has been since 2017.

WE told National Post previously that the charity’s real estate investments were funded by “targeted donations” from long-standing supporters of the charity. No program funds or monies from youth fundraising were used to purchase property for WE Charity or any other WE-related entity, the organization said.

The money raised from the asset sales, the charity said in September, would go toward planned projects in Latin America, Asia and Africa, and to fund longer-term projects in Kenya and Ecuador.

“Going forward, there will be no new schools, water or agricultural projects, and no expansion to new communities in the nine countries where WE Charity is active,” the September statement said.

With additional reporting by Christopher Nardi and National Post Staff

Email: tdawson@postmedia.com | Twitter: tylerrdawson

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Canadian home prices on fire and policymakers using ‘squirt gun’

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By Julie Gordon

OTTAWA (Reuters) -Buyers are turning up the heat on Canada‘s searing hot housing market, their frenzy leading to record sales, prices and starts, but in a budget unveiled on Monday the federal government did little to tamp down the fire.

The Teranet-National Bank Composite House Price Index showed home price gains accelerated 1.5% in March from February, data released on Tuesday showed.

The index was up 10.8% on the year, with a record 81% of the broader 32 markets surveyed posting annual gains above 10%. That far exceeds the last peak in 2017.

On Monday, Finance Minister Chrystia Freeland, presenting Canada‘s first budget in over two years, fleshed out a previously announced tax on foreigners parking money in Canadian homes, along with limited investments in affordable housing.

“The idea here is that homes are for Canadians to live in. They are not assets for parking offshore money,” Freeland told reporters.

For those watching, it was nowhere near enough.

“It’s like a squirt gun next to a towering inferno,” said Doug Porter, chief economist at BMO Capital Markets.

“We need to break the psychology that real estate is this can’t lose investment that only goes up,” he added. “Before this turns into a full-on bubble.”

March was a record month for new housing starts and home resale prices surged 31.6% year-over-year.

New Zealand, facing a similarly red hot market, introduced a raft of cooling measures including new taxes on investors and stricter lending rules.

While the Bank of Canada has become increasingly vocal on the issue, it has also pledged to keep interest rates at record lows into 2023. It will update its forecasts Wednesday.

And most measures that would cool the frenzy are up to the provinces and federal government who remain cautious as a third wave of COVID-19 rages.

Real estate agents say more listing are now coming to market, but they still see a massive long-term shortage. They expected more than the 35,000 units pledged in the budget.

“It’s not going to do much to intervene in the activity level we’re seeing now across the country,” said Christopher Alexander of RE/MAX Ontario-Atlantic.

(Reporting by Julie Gordon in OttawaEditing by David Gregorio and Alistair Bell)

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Canada housing starts up 21.6% in March to new record – CMHC

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Real Estate Sales In September

By Julie Gordon

OTTAWA (Reuters) – Canadian housing starts rose 21.6% in March compared with the previous month, easily beating expectations and hitting a new record, data from the Canadian Mortgage and Housing Corporation showed on Monday.

The seasonally adjusted annualized rate of housing starts rose to 335,200 units in March, well ahead of analyst expectations for 250,000 units, and a new high for all months on record.

Much of the gain was on multiple urban starts, which jumped 33.8% to 222,358 units. Single-detached urban starts rose 3.6% to 78,615 units.

“The big acceleration came as weather was unseasonably warm in many parts of the country,” Royce Mendes, senior economist at CIBC Economics, said in a note.

Mendes added that new home construction will likely be a major contributor to overall GDP growth again in 2021, even as building activity cools off from the “torrid pace” of recent months.

Canada‘s average home selling price soared an eye-watering 31.6% year-over-year in March, hitting a new high as sales also climbed to a new all-time record, the Canadian Real Estate Association (CREA) said earlier this month.

A supply imbalance has been blamed for skyrocketing home prices through the pandemic, though new listings surged in March, which, coupled with strong starts, suggests a more balanced market could be coming.

“Red-hot demand for real estate propelled a record month for housing starts in March. While the market will need a long stretch of supply growth to have a meaningful effect on prices, the March numbers are a solid start,” said Shelly Kaushik, an economist with BMO Capital Markets in a note.

Canada‘s ruling Liberals are set to unveil their first full budget in two years on Monday, with billions in pandemic supports as COVID-19 infections skyrocket, a national daycare plan and new taxes on luxury goods.

 

(Reporting by Julie Gordon in Ottawa; Editing by Toby Chopra and Jonathan Oatis)

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Canadian home sales, prices surge to new record in March

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OTTAWA (Reuters) – Canadian home sales rose 5.2% in March from February, setting a new all-time record amid strong demand in markets across the country, the Canadian Real Estate Association said on Thursday.

The industry group said actual sales, not seasonally adjusted, rose 76.2% from a year earlier, while the group’s Home Price Index was up 20.1% from last March and up 3.1% from February.

The actual national average selling price hit a new record at C$716,828 ($572,821) in March, up 31.6% from a year earlier and rising 5.7% from February.

($1 = 1.2514 Canadian dollars)

 

(Reporting by Julie Gordon in Ottawa)

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