CONTROL YOUR DESTINY A WEALTH GENERATION ENGINE FOR FIRST NATION SOVEREIGN WEALTH

Transcription

1 WELCOME TO OUR WORKSHOP CONTROL YOUR DESTINY A WEALTH GENERATION ENGINE FOR FIRST NATION SOVEREIGN WEALTH THE EDIP PLATFORM SUPPORTING FIRST NATIONS SOVEREIGNTY AND FINANCIAL INDEPENDENCE (WORKSHOP P) 2:45 4:15 PM AFOA CONFERENCE - FEBRUARY 18, 2016 SLIDE 1

2 WORKSHOP OVERVIEW OWN SOURCE REVENUES Generating Own Source Revenues independent of government control. THE OPPORTUNITY Improve quality of life and achieve financial independence. WHO WE ARE A multi-disciplinary network of experts, including lawyers, tax experts, accountants, consultants, financial advisors, and others, who have their own practices, businesses and firms. EDIP SUITE OF SERVICES A suite of services centered around putting in place an integrated sovereign wealth plan. EDIP VISION AND VALUES EDIP's mission is to give First Nations the sovereign wealth planning tools, resources and support necessary to achieve financial independence. SLIDE 2

3 SECTION ONE OWN SOURCE REVENUES OWN SOURCE REVENUES Generating Own Source Revenues independent of government control. SLIDE 3

4 SECTION ONE OWN SOURCE REVENUES Like any government a First Nation's largest source of sovereign wealth is its "public assets". These include "financial assets" and "commercial assets". PUBLIC ASSETS First Nations have an opportunity to centralize these assets, separate them from political influence and maximize returns in order to supplement federal transfers. FINANCIAL ASSETS Experts worldwide project that properly managed, public assets can return enough to fund local infrastructure needs with enough left over to improve quality of life. COMMERCIAL ASSETS Financial Assets are liquid investments, including marketable securities, which First Nations often hold in a Trust. Commercial Assets include real estate, infrastructure benefits agreements and other assets that can be sold or leased or used to generate an income, including businesses owned or controlled by the First Nations (called "state-owned enterprises"). Public assets are the largest pool of assets in the world, larger than all the pension funds and mutual funds in the world, and yet most governments do not manage these assets in a manner that maximizes returns to the government. SLIDE 4

5 SECTION ONE OWN SOURCE REVENUES It is difficult if not impossible for First Nations to exercise sovereign rights when government controls their cash flow. FUNDING Collectively Canadian First Nations receive government funding of approximately $10 billion a year. While governments have a fiduciary obligation to fund First Nations, government funding is subject to strict funding conditions. The First Nations population is growing faster than federal transfers. Federal funding is insufficient to fund housing, education and infrastructure, let alone funding discretionary needs. Even with the recent change in government, First Nations are at the whim of federal political parties who have different approaches to First Nations' funding. SLIDE 5

6 SECTION ONE OWN SOURCE REVENUES Opportunities Ahead TRENDS Over the past quarter century First Nations have managed to balance federal funding with own source revenues. Collectively First Nations generate as much in ownsource revenues as they receive in government transfers, although they are unevenly spread across the country. The trend is for First Nations to gain even greater access to own-source revenues as Canadian courts continue to render decisions that effectively require resource and energy companies to partner with First Nations in their traditional territories, and First Nations continue to grow businesses and develop real estate and infrastructure at a record pace. First Nations are also raising revenues by sharing the tax base with federal and provincial governments and imposing taxation on reserve. Many First Nations also have market portfolios that they have built from claims settlements, land sales, and/or retention of business and investment income. SLIDE 6

7 SECTION ONE OWN SOURCE REVENUES There are a series of challenges First Nations currently face that threaten their ability to rely on own source revenues as a way to offset the insufficiency, unpredictability and restrictions of federal transfers. TRADITIONAL TERRITORIES ON RESERVE LEGACY STRUCTURES COMMUNITY TRUST ECONOMIC DEVELOPMENT OFFICE SLIDE 7

8 SECTION ONE OWN SOURCE REVENUES There are a series of challenges Own source revenues are very unevenly spread out First Nations currently across the country. Someface that threaten their ability to rely on own source First Nations haveunpredictability own insufficiency, and restrictions of federal transfers. source revenues that dwarf their government transfers. The federal government has Others have almost none. also been forcing consolidated reporting and then clawing back some own source revenues from federal transfers. In many cases community members were never consulted about how to capture and grow own source revenues. Most First Nations do not have access to the tools and experts needed to analyze, select and manage business and investment opportunities. Even where First Nations have access to experts, projects often call for a multi-disciplinary approach. Outside experts are usually engaged for specific assignments; when what is needed is ongoing support and assistance. Most First Nations in Canada have economic development corporations (EDCs) that are often kept separate from portfolio investment and activities that take place off reserve. Most First Nations have not diversified their revenuesown as asource wayrevenues, to offset or put a plan in place to build community wealth in a systematic manner. TRADITIONAL TERRITORIES the The federal government has been aggressively taxing income generated from offreserve sources. ON RESERVE LEGACY STRUCTURES COMMUNITY TRUST ECONOMIC DEVELOPMENT OFFICE Many First Nations have legacy structures that do not maximize tax efficiencies or incorporate SLIDE 8 best practice governance.

9 SECTION ONE OWN SOURCE REVENUES Our structures are competing And more We have outdated legacy structures Well Yes Yes We don t have the capacity and expertise We have too many needs We depend on Gov funding Or Are we diversifying WHY IS A SOVEREIGN WEALTH STRATEGY IMPORTANT? Not well Does it build capacity No Yes What is our budget size? Modest Without developing and implementing a focused strategy, First Nations may find themselves almost entirely dependent on federal government funding, policies and priorities. large With Our needs should set the scope of projects Can we screen multiple opportunities SLIDE 9

10 SECTION TWO THE OPPORTUNITY THE OPPORTUNITY Improve quality of life and achieve financial independence. SLIDE 10

11 SECTION TWO THE OPPORTUNITY A NEW APPROACH TO BUILDING WEALTH EDIP was formed because the integrated suite of services required by First Nations to build sovereign wealth cannot be delivered by any one firm or company, no matter how large or diversified. We work with a First Nation community and the service providers of their choice to execute the strategy developed for them. MILESTONE MILESTONE MILESTONE We recognize the importance of own source revenues, and the challenges faced nationally by First Nations. We believe the opportunity is for First Nations to work with a network of expert advisors from every discipline to design, implement and maintain a best practice sovereign wealth strategy and structure to mitigate the challenges currently faced by First Nations. MILESTONE This requires a much broader approach to building wealth. SLIDE 11

12 SECTION TWO THE OPPORTUNITY One that takes into accounts all of the First Nation's assets, including its commercial and financial assets. One that gives community leaders and management the tools, resources and ongoing support necessary to focus on building wealth for future generations. One that aligns the community's governance and decision-making MILESTONE structure to the wealth generation process. One that is much more systematic in its approach, measuring results and allocating assets based on a strategy and results. MILESTONE MILESTONE MILESTONE SLIDE 12

13 SECTION TWO THE OPPORTUNITY IMPLEMENTATION The due diligence and discovery phase determines the community's current situation, its investment opportunities and what they would like to achieve through their vision and their plan. This stage includes consultations with leadership, with management, with key community advisors and with the community. A diagnostic approach is taken to determine areas that need improvement. The wealth strategy is documented in in a Statement of Polices and Guidelines that sets out the community's goals and the strategies to achieve them. DESIGN BEST PRACTICE STRATEGY AND STRUCTURE ONGOING SUPPORT In addition to working with leadership and the community to develop a wealth strategy, the First Nations EDIP team will also help the First Nation develop a best practice "structure" to house and govern the sovereign wealth strategy. Once the community leadership endorses the sovereign wealth strategy, the plan and structure are put in place. The final phase involves providing ongoing support for the community's sovereign wealth strategy. This phase includes meeting regularly with management, and with a community's advisory team, and providing expertise and tools as needed. SLIDE 13 PHASE THREE DUE DILIGENCE AND DISCOVERY PHASE FOUR PHASE TWO PHASE ONE EDIP puts together a team to assist the First Nation. This team works with the First Nation to identify its needs and goals and then works with them to design and implement the structure and strategy.

14 SECTION THREE WHO WE ARE WHO WE ARE A multi-disciplinary network of experts, including lawyers, tax experts, accountants, consultants, financial advisors, and others, who have their own practices, businesses and firms. SLIDE 14

15 SECTION THREE WHO WE ARE Howard Morry, President and Director A Partner at Pitblado Law LLP and President and Director of EDIP Sovereign Wealth Solutions Inc. He is nationally recognized as a trusted advisor for his particular insight and innovation in domestic and international tax matters, including First Nations taxation. Neil Philcox A Co-Founder at Grand Basin Capital working directly with a diversity of Aboriginal, corporate and financial clients spanning a wide range of sectors. He has an accomplished background in international finance and business development. Sean Holt A Co-Founder and principal at Grand Basin Capital he brings expertise in investment banking having worked with Goldman Sachs in New York and private equity with Emerging Markets Partnership in Washington DC. Scott Carleton A Partner at Indigenous Financial Solutions Ltd. He is a Chartered Professional Accountant from Northern Manitoba who has over 20 years of experience in corporate finance for private, publicly traded and government organizations. CORE LEADERSHIP Gary F. Kissack A Partner at Fogler Rubinoff LLP in the Business Law & Capital Markets and Securities practice groups and regularly advises First Nations on the formation of customized economic development groups, as well as on evaluation, negotiation and implementation of investments. Gabrielle Ollinger Gabrielle is a member of Cowessess Nation and is President of Canyon Heights Management International Inc. As a CAFM she has worked with First Nation organizations, communities, federal government, private and non-profit organizations. Walter Manitowabi A member of Wikwemikong and is managing partner of Three Fires Solutions. He has held senior positions with the Union of Ontario Indians, Andys Group of Companies and Wikwemikong Unceded Nation. Dan Ollinger Dan is Technology Director of Canyon Heights Management International Inc. and leads the design and development of integrated web based information management systems to support operations with efficient and secure Cloud applications platforms. SLIDE 15

16 SECTION THREE WHO WE ARE GROWING A NETWORK OF EXPERT ADVISORS: We are continuously adding Service Providers, Advisors, and Thought Leaders who are selected for expertise, experience and ability to work well with the team. SOVEREIGN WEALTH STRATEGY ONGOING SUPPORT Human Resources COMMUNITY GOALS AND OBJECTIVES STRUCTURE MULTI-DISCIPLINARY EXPERTISE First Nations can select an integrated, values-aligned and accountable team, supported by services and tools that enable your team to work with you to design, implement and maintain a best practice wealth generation strategy. SLIDE 16

17 SECTION THREE WHO WE ARE EDIP BACK OFFICE PROJECT MANAGEMENT The network has a back office to help them manage projects, and access purpose-built tools, templates and systems. The back office allows the EDIP team to deliver an integrated suite of services that ensures uniformity, quality control, risk management, timely service delivery and privacy. EDIP's tools are also available to First Nations to help them manage their EDCs and sovereign wealth strategies SLIDE 17

18 SECTION FOUR SUITE OF SERVICES EDIP SUITE OF SERVICES A suite of services centered around putting in place an integrated sovereign wealth plan. SLIDE 18

19 SECTION FOUR SUITE OF SERVICES The Macro Level BUSINESS STRUCTURE BUSINESS STRUCTURE - At a MACRO LEVEL the business structure would have two components: o An "UPSTREAM STRUCTURE, sometimes called a SUPERSTRUCTURE that HOLDS all "downstream" investment opportunities through a downstream structure, and is focused on maximizing wealth. o A "DOWNSTREAM" STRUCTURE that HOUSES all your investment opportunities and PLUGS into the superstructure. UPSTREAM The superstructure (sometimes called the upstream ), is governed in a manner that provides for accountability, alignment with community goals, transparency, effective decision making, strategy and leadership, separation of politics and business and between management and the Board, and timely decision making. Financial Assets plus Commercial Assets Plug into the Superstructure. DOWNSTREAM ON AND OFF RESERVE INVESTMENTS SLIDE 19

20 SECTION FOUR SUITE OF SERVICES SUPERSTRUCTURE The Superstructure has a number of features. At the centre of it is the EDO that continues with an expanded mandate. ADVISORY COUNCIL UPSTREAM DOWNSTREAM DOWNSTREAM DOWNSTREAM ON AND OFF RESERVE INVESTMENTS SLIDE 20

21 SECTION FOUR SUITE OF SERVICES SOVEREIGN WEALTH STRATEGY The Sovereign Wealth Strategy is documented in in a Statement of Polices and Guidelines that sets out the community's goals and the strategies to achieve them. ADVISORY COUNCIL UPSTREAM DOWNSTREAM DOWNSTREAM DOWNSTREAM ON AND OFF RESERVE INVESTMENTS SLIDE 21

22 SECTION FOUR SUITE OF SERVICES STRUCTURE In addition to working with leadership and the community to develop a wealth strategy, the EDIP team also helps the First Nation design and put in place a best practice "structure" to house and govern the sovereign wealth strategy. ADVISORY COUNCIL UPSTREAM DOWNSTREAM DOWNSTREAM DOWNSTREAM ON AND OFF RESERVE INVESTMENTS SLIDE 22

23 SECTION FOUR SUITE OF SERVICES ONGOING SUPPORT Once the sovereign wealth strategy and the structure are in place, EDIP will provide ongoing support for the community's wealth generation strategy. ADVISORY COUNCIL UPSTREAM DOWNSTREAM DOWNSTREAM DOWNSTREAM ON AND OFF RESERVE INVESTMENTS SLIDE 23

24 SECTION FOUR SUITE OF SERVICES Flexible pricing, you choose the method and timing of payment. PRICING: o Clients enter into a formal engagement with EDIP and the service providers. EDIP will typically collect and distribute fees, for itself and the service providers, in the way that a project manager does. PRICING o The fees are flexible and will be based on how much work is required, which service providers will be involved, and how much they will charge, which of EDIP's tools, systems and people will be required and a community's ability to pay. o The due diligence and discovery phase is billed as a project fee. At the end of that first phase, when more is known of what will be required in the second and third phases (designing and implementing the strategy and structure), the client is given a fixed project fee, along with a payment plan. o Once the strategy and structure are in place, a proposal is given to the community for "ongoing support". Pricing will likely be based on a combination of fixed monthly or quarterly fees, project or hourly fees and a percentage based on growth in wealth and returns over target. SLIDE 24

25 SECTION FIVE EDIP VISION AND VALUES EDIP VISION AND VALUES EDIP's mission is to give First Nations the sovereign wealth planning tools, resources and support necessary to achieve financial independence. SLIDE 25

26 SECTION FIVE EDIP VISION AND VALUES MISSION Our mission is to ensure that First Nations have access to the sovereign wealth tools, resources and advice necessary to achieve financial independence. VISION Our vision is a world in which First Nations achieve financial independence. VALUES STRATEGY COMMITMENT EDIP Sovereign Wealth Solutions Inc. and its advisors believe that First Nations control their own destiny. Our strategy is to build and support a network of expert advisors with expertise in multiple disciplines. Our commitment is to assemble the right team of advisors to work with you to design, implement and maintain a best practice sovereign wealth strategy and structure that supports your economic development and financial goals. SLIDE 26

27 THANK-YOU FOR ATTENDING CONTACT US A WEALTH GENERATION ENGINE FOR FIRST NATION SOVEREIGN WEALTH INFO@EDIP.CO SLIDE 27