Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.
Investment
Xebec and Fonds de solidarité FTQ launch an investment fund to increase renewable natural gas production in Québec – GlobeNewswire
MONTREAL, June 01, 2020 (GLOBE NEWSWIRE) — Xebec Adsorption Inc. (TSXV: XBC) (“Xebec”), a global provider of clean energy solutions, and Fonds de solidarité FTQ (the “Fonds”) are proud to announce the creation of the GNR Québec Capital L.P. investment fund. With an initial capitalization of $20 million, this new investment vehicle aims to increase renewable natural gas (RNG) production in Québec. Partners, particularly from the agricultural and municipal sectors, will have access to the capital and expertise needed to develop and operate efficient facilities to treat organic waste. The creation of a fund of this type for renewable natural gas projects is a first in Québec.
Xebec and the Fonds will each initially invest $10 million into the partnership. Over time, Xebec and the Fonds expect that the partnership could receive an aggregate $100 million in equity capital from Xebec, the Fonds and other investors. Xebec and the Fonds’ initiative could, with a 75:25 debt to equity ratio, fund 12 to 15 renewable natural gas projects in Québec with an aggregate investment of $400 million over the next decade. The general partner, GNR Québec Capital Management Inc., overseen by a Board of Directors nominated by Xebec and the Fonds will be managing the partnership.
“We’re proud to once again partner with Xebec to increase the Fonds de solidarité FTQ’s impact in the fight against climate change. Renewable natural gas can accelerate the decarbonization of sectors such as transportation, home heating and industry, by supporting the circular economy through organic waste responsive management activities. This initiative also meets the Fonds’ objectives for a just energy transition by creating jobs and supporting local economies with additional revenue streams for farmers, municipalities, and industry. Xebec is a worldwide leader in renewable gases, and we are excited to have them as a partner in this project for the large-scale rollout of renewable natural gas facilities in Québec,” says Dany Pelletier, Vice President for Investments – Structuring Capital, Energy and Environment, Fonds de solidarité FTQ.
“Our partnership with the Fonds de solidarité FTQ is a great demonstration of how local players can work together to foster the development of the renewable natural gas industry. When we launched this initiative a few years ago, we realized the need for new and better adapted structures to co-invest, develop and operate these facilities in a professional manner. Quebec has become a leading RNG province in Canada and currently has several RNG facilities in operation. Considering that new government regulations, such as the Clean Fuels Standard, will soon come into force and that the need for a higher renewable natural gas content will increase over the next few years, particularly in the utilities sector, we are pleased to partner with the Fonds de solidarité FTQ to accelerate the deployment of renewable gas infrastructures. Going forward, Xebec will seek to create more of these valuable financial partnerships in the field of RNG waste-to-energy conversion in Canada and will continue its mission to bring leading-edge technologies to the sector,” said Kurt Sorschak, President and CEO of Xebec Adsorption Inc.
A first-of-its-kind investment vehicle for renewable natural gas projects in Canada
This partnership is an innovative initiative that brings together industry participants (waste management companies, gas utilities, farmers, municipalities) and major financial institutions with a clear mandate to invest in organic waste treatment facilities for the production of renewable natural gas. The market for renewable natural gas in Canada is still in its infancy. In this context, Xebec and the Fonds de solidarité FTQ view this partnership as an essential step to develop and promote the expertise and efforts needed to accelerate the replacement of fossil fuels while supporting sustainable and responsible long-term investment in a waste-to-renewable gas economy in Canada.
GNR Quebec Capital: in line with government objectives for GNR production and greenhouse gas emissions reduction
GNR Quebec Capital L.P. believes that it could play a significant catalyst role in helping to meet government objectives of reducing greenhouse gas emissions and increasing the use of renewable natural gas, while supporting existing developers.
Last March, the Quebec government’s 2020-2021 budget allocated $70 million to support RNG production and distribution up to 2022. This measure follows the passing, in March 2019, of regulations mandating the minimum quantity of RNG to be delivered by natural gas distributors at 1% in 2020, and 5% in 2025.
For its part, the Government of Canada announced on April 24, 2020 an updated timeline for the introduction of the Clean Fuels Standard (CFS). The objective of this standard is to achieve an annual reduction in greenhouse gas emissions of 30 million tons by 2030. It will do so by stimulating investment and innovation in low-carbon-intensity fuels while enabling cost effective compliance. Xebec expects that the implementation of the ASC will create significant opportunities for the Canadian renewable gas industry over the next decade.
Xebec to host Webinar on the Partnership
On June 2, at 11:00 a.m. EDT (8:00 a.m. PDT), Xebec management invites shareholders, analysts, investors, media representatives and other stakeholders to participate in a webinar on this innovative partnership. For the occasion, Kurt Sorschak, Xebec’s President and CEO, will be joined by Louis Dufour, Xebec’s Chief Financial Officer, and Prabhu Rao, Xebec’s Chief Operating Officer. The presentation will be followed by a question period.
To Register: https://app.livestorm.co/xebec-adsorption-inc/xebec-and-fonds-de-solidarite-ftq-quebec-rng-partnership-webinar
Media inquiries:
Public Stratégies et Conseil
Harold Fortin, Corporate communications and Public affairs strategist
harold@publicsc.com
+418 572 4356
Fonds de solidarité FTQ
Patrick McQuilken, Media Relations
pmcquilken@fondsftq.com
+514 703 5587
Investor relations:
Xebec Adsorption Inc.
Brandon Chow, Investor Relations Manager
bchow@xebecinc.com
+450 979 8700 ext 5762
About the Fonds de solidarité FTQ
The Fonds de solidarité FTQ is a capital development fund that channels the savings of Quebecers into investments. With $16.7 billion in net assets as at November 30, 2019, the Fonds has helped create and protect more than 215,000 jobs. The Fonds has over 3,100 partner companies and upwards of 700,000 shareholders-savers.
About Xebec Adsorption Inc.
Xebec is a global provider of gas generation, purification, and filtration solutions for the industrial, energy and renewables marketplace. Well-positioned in the energy transition space with proprietary technologies that transform raw gases into clean sources of renewable energy, Xebec’s 1500+ customers range from small to multi-national corporations, governments and municipalities looking to reduce their carbon footprints. Headquartered in Montréal, Quebec, Canada, Xebec has several Sales and Support offices in North America and Europe, as well as two manufacturing facilities in Montréal and Shanghai. Xebec trades on the TSX Venture Exchange under the symbol XBC.
Cautionary Statement
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements, and subject to risks and uncertainties. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “seeks”, “expects”, “estimates”, “intends”, “anticipates”, “believes”, “could”, “might”, “likely” or variations of such words, or statements that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “will be taken”, “occur”, “be achieved” or other similar expressions. Forward-looking statements, including statements concerning future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects as well as the expectations of management of Xebec with respect to information regarding the business and the expansion and growth of Xebec operations, involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are subject to business and economic factors and uncertainties, and other factors that could cause actual results to differ materially from these forward-looking statements, including the relevant assumptions and risks factors set out in Xebec’s public documents, including in the most recent annual management discussion and analysis and annual information form, filed on SEDAR at www.sedar.com. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the uncertain and unpredictable condition of global economy, notably as a consequence of the Covid-19 pandemic, Xebec’s capacity to generate revenue growth, the ability of Xebec and the Fonds to identify additional partners, the ability of the partnership to raise additional capital investment, the development of the renewable gas market in Canada, the capacity for the partnership to identify valuable renewable gas projects to invest in, the ability of the partnership to contribute to the reduction of greenhouse gas emissions, price of raw material, Xebec’s capacity to meet all its other commitments and business plans, Xebec’s limited number of customers, the potential loss of key employees, share price volatility, and other factors. Although Xebec believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Xebec disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Investment
Taxes should not wag the tail of the investment dog, but that's what Trudeau wants – Financial Post
Kim Moody: Ottawa is encouraging people to crystallize their gains and pay tax. That’s a hell of a fiscal plan
Article content
The Canadian federal budget has been out for a week, which is plenty of time to absorb just how terrible it is.
The problems start with weak fiscal policy, excessive spending and growing public-debt charges estimated to be $54.1 billion for the upcoming year. That is more than $1 billion per week that Canadians are paying for things that have no societal benefit.
Advertisement 2
Article content
Article content
Next, the budget clearly illustrates this government’s continued weak taxation policies, two of which it apparently believes are good for entrepreneurs. But the proposed $2-million Canadian Entrepreneurs Incentive (CEI) and $10-million capital gains exemption for transfers to an employee ownership trust (EOT) are both laughable.
Why? Well, for the CEI, virtually every entrepreneurial industry (except technology) is not eligible. If you happen to be in an industry that qualifies, the $2-million exemption comes with a long, stringent list of criteria (which will be very difficult for most entrepreneurs to qualify for) and it is phased in over a 10-year period of $200,000 per year.
For transfers to EOTs, an entrepreneur must give up complete legal and factual control to be eligible for the $10-million exemption, even though the EOT will likely pay the entrepreneur out of future profits. The commercial risk associated with such a transfer is likely too great for most entrepreneurs to accept.
Capital gains tax hike
But the budget’s highlight proposal was the capital gains inclusion rate increase to 66.7 per cent from 50 per cent for dispositions effective after June 24, 2024. The proposal includes a 50 per cent inclusion rate on the first $250,000 of annual capital gains for individuals, but not for corporations and trusts. Oh, those evil corporations and trusts.
Article content
Advertisement 3
Article content
There is a lot wrong with this proposed policy. The first is that by not putting individuals, corporations and trusts on the same taxation footing for capital gains taxation, the foundational principle of integration (the idea that the corporate and individual tax systems should be indifferent to whether an investment is held in a corporation or directly by the taxpayer) is completely thrown out the window. This is wrong.
Some economists have come out in strong favour of the proposal, mainly because of equity arguments (a buck is a buck), but such arguments ignore the real world of investing where investors look at overall risk, liquidity and the time value of money.
If capital gains are taxed at a rate approaching wage taxation rates, why would entrepreneurs and investors want to risk their capital when such investments might be illiquid for a long period of time and be highly risky?
They will seek greener pastures for their investment dollars and they already are. I’ve been fielding a tremendous number of questions from investors over the past week and I’d invite those academics and economists who support the increased inclusion rate to come live in my shoes for a day to see how the theoretical world of equity and behaviour collide. It’s not good and it certainly does nothing to help Canada’s obvious productivity challenges.
Advertisement 4
Article content
Of course, there has been the usual chatter encouraging such people to leave (“don’t let the door hit you on the way out,” some say) from those who don’t understand basic economics and taxation policy, but these cheerleaders should be careful what they wish for. The loss of successful Canadians and their investment dollars affects all of us in a very negative way.
The government messaging around this tax proposal has many people upset, including me. Specifically, it is the following paragraph in the budget documents that many supporters are parroting that is upsetting:
“Next year, 28.5 million Canadians are not expected to have any capital gains income, and 3 million are expected to earn capital gains below the $250,000 annual threshold. Only 0.13 per cent of Canadians with an average income of $1.4 million are expected to pay more personal income tax on their capital gains in any given year. As a result of this, for 99.87 per cent of Canadians, personal income taxes on capital gains will not increase.” (This is supposedly about 40,000 taxpayers.)
Bluntly, this is garbage. It outright ignores several facts.
Advertisement 5
Article content
For one thing, there are hundreds of thousands of private corporations owned and controlled by Canadian resident individuals. Those corporations will be subject to the increased capital gains inclusion rate with no $250,000 annual phase-in. Because of the way passive income is taxed in these Canadian-controlled private corporations, the increased tax load on realized capital gains will be felt by individual shareholders on the dividend distribution required to recover certain refundable corporate taxes.
Furthermore, public corporations that have capital gains will pay tax at a higher inclusion rate and this results in higher corporate tax, which means decreased amounts are available to be paid out as dividends to individual shareholders (including those held by individuals’ pensions).
The budget documents simply measured the number of corporations that reported capital gains in recent years and said it is 12.6 per cent of all corporations. That measurement is shallow and not the whole story, as described above.
Tax hit for cottages
There are also millions of Canadians who hold a second real estate property, either a cottage-type and/or rental property. Those properties will eventually be sold, with the probability that the gain will exceed the $250,000 threshold.
Advertisement 6
Article content
Upon death, an individual will often have their largest capital gains realized as a result of deemed dispositions that occur immediately prior to death. This will have the distinct possibility of capital gains that exceed $250,000.
And people who become non-residents of Canada — and that is increasing rapidly — have deemed dispositions of their assets (with some exceptions). They will face the distinct possibility that such gains will be more than $250,000.
The politics around the capital gains inclusion rate increase are pretty obvious. The government is planning for Canadian taxpayers to crystallize their inherent gains prior to the implementation date, especially corporations that will not have a $250,000 annual lower inclusion rate. For the current year, the government is projecting a $4.9-billion tax take. But next year, it dramatically drops to an estimated $1.3 billion.
This is a ridiculous way to shield the government’s tremendous spending and try to make them look like they are holding the line on their out-of-control deficits. The government is encouraging people to crystallize their gains and pay tax. That’s a hell of a fiscal plan.
Advertisement 7
Article content
Recommended from Editorial
There’s an old saying that tax should not wag the tail of the investment dog, but that is exactly what the government is encouraging Canadians to do in the name of raising short-term taxation revenues. It is simply wrong.
I hope the government has some second sober thoughts about the capital gains proposal, but I’m not holding my breath.
Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimmoody.
_____________________________________________________________
If you like this story, sign up for the FP Investor Newsletter.
_____________________________________________________________
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.
Article content
Investment
Everton search for investment to complete 777 deal – BBC.com
-
2 hours ago
Everton are searching for third-party investment in order to push through a protracted takeover by 777 Partners.
The Miami-based firm agreed a deal to buy the Toffees from majority owner Farhad Moshiri in September, but are yet to gain approval from the Premier League.
On Monday, Bloomberg reported the club’s main financial adviser Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line.
BBC Sport has been told this is “standard practice contingency planning” and the process may identify other potential lenders to 777.
Sources close to British-Iranian businessman Moshiri have told BBC Sport they remain “working on completing the deal with 777”.
It is understood there are no other parties waiting in the wings to takeover should the takeover fall through and the focus is fully on 777.
The Americans have so far loaned £180m to Everton for day-to-day operational costs, which will be turned into equity once the deal is completed, but repaying money owed to MSP Sports Capital, whose deal collapsed in August, remains a stumbling block.
777 says it can stump up the £158m that is owed to MSP Sports Capital and once that is settled, it is felt the deal should be completed soon after.
Related Topics
Investment
Warren Buffett Predicts 'Bad Ending' for Bitcoin — Is It a Doomed Investment? – Yahoo Finance
Currently sitting in sixth on Forbes’ Real-Time Billionaires List, Berkshire Hathaway co-founder, chairman and CEO Warren Buffett is a first-rate example of an investor who stuck to his core financial beliefs early in life to become not only a success but a once-in-a-lifetime inspiration to those who followed in his footsteps.
One of the most trusted investors for decades, the 93-year-old Buffett isn’t shy to pontificate on his investment philosophy, which is centered around value investing, buying stocks at less than their intrinsic value and holding them for the long term.
Read Next: Warren Buffett: 6 Best Pieces of Money Advice for the Middle Class
Find Out: 5 Genius Things All Wealthy People Do With Their Money
He’s also quite vocal on investments he deems worthless. And one of those is Bitcoin.
Buffett’s Take on Bitcoin
Over the past decade, it’s been clear that the crypto craze isn’t something Buffett wants any part of. He described Bitcoin as “probably rat poison squared” back in 2018.
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment.
“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.
Although the Oracle of Omaha has his misgivings about the unpredictable investment, does that mean crypto is doomed as an investment? Not necessarily.
For You: 10 Valuable Stocks That Could Be the Next Apple or Amazon
Is Buffett Wrong About Bitcoin?
Bitcoin bulls argue that while it’s not government-issued, cryptocurrency is as fungible, divisible, secure and portable as fiat currency and gold. Because they occupy a digital space, cryptocurrencies are decentralized, scarce and durable. They can last as long as they can be stored.
Crypto boosters continue to predict massive growth in the coin’s value. Earlier this year, SkyBridge Capital founder and former White House director of communications Anthony Scaramucci told reporters that Bitcoin could exceed $170,000 by mid-2025, and Ark Invest CEO Cathie Wood predicts Bitcoin will hit $1.48 million by 2030, according to Fortune.
“They really don’t understand the concept and the whole history of money,” Scaramucci said of crypto critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place a value on “traditional” currency, it is essentially worthless compared with the transparent and trustworthy digital Bitcoin, Scaramucci said.
Currently trading around the $66,000 mark, Bitcoin is up nearly 50% in 2024. This means it’s massively outperforming most indexes this year, including the S&P 500, which is up about 6% in 2024.
Although Berkshire Hathaway has invested heavily in Bitcoin-related Brazilian fintech company Nu Holdings, which has its own cryptocurrency called Nucoin, it’s possible Buffett will never come around fully to crypto, despite its recent surge in value. It’s contrary to the reliable investment strategy that has served him very well for decades.
“The urge to participate in something where it looks like easy money is a human instinct which has been unleashed,” Buffett said. “People love the idea of getting rich quick, and I don’t blame them … It’s so human, and once unleashed you can’t put it back in the bottle.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Warren Buffett Predicts ‘Bad Ending’ for Bitcoin — Is It a Doomed Investment?
-
Health23 hours ago
See how chicken farmers are trying to stop the spread of bird flu – Fox 46 Charlotte
-
Science21 hours ago
Osoyoos commuters invited to celebrate Earth Day with the Leg Day challenge – Oliver/Osoyoos News – Castanet.net
-
Politics21 hours ago
Haberman on why David Pecker testifying is ‘fundamentally different’ – CNN
-
News22 hours ago
Freeland defends budget measures, as premiers push back on federal involvement – CBC News
-
Economy22 hours ago
The Fed's Forecasting Method Looks Increasingly Outdated as Bernanke Pitches an Alternative – Bloomberg
-
Health20 hours ago
It's possible to rely on plant proteins without sacrificing training gains, new studies say – The Globe and Mail
-
Tech20 hours ago
Meta Expands VR Operating System to Third-Party Hardware Makers – MacRumors
-
Business21 hours ago
Gildan replacing five directors ahead of AGM, will back two Browning West nominees – Yahoo Canada Finance
Comments