workshop 2015 - home - cando 2015 morry kissack manitowabi firse the opportunity edip ign3 h...

EDIP Sovereign Wealth Solutions


Rossetti Room 3:15 to 4:45pm22nd Annual National Conference & AGMEaton Chelsea Hotel, Toronto, ON

Presentation to CANDO WorkshopOctober 28, 2015

Howard MorryGary F. KissackWalter Manitowabi

EDIP Sovereign Wealth Solutions ~ Supporting First Nations Sovereignty and Financial Independence

The Opportunity


Own Source Revenues

EDIP’s Suite of ServicesSection 4

Section 3

Section 2

Section 1

Workshop Overview

EDIP’s Vision and ValuesSection 5



Rossetti Room 3:15 to 4:45pm22nd Annual National Conference & AGMEaton Chelsea Hotel, Toronto, ON

3

Section 1Own Source Revenues

4

Own Source Revenues

First Nations receive government funding of approximately $10 billion a year. While governments have a fiduciary obligation to fund First Nations, First Nations recognize they need to generate "own source revenues" independent of government control.

o Government funding is subject to strict funding conditions.o It is difficult to exercise sovereign rights when government controls your cash flow.o The growth in the First Nations population is outpacing the growth in federal transfers.o Federal funding is insufficient to provide even basic supports, such as housing, education and infrastructure, let

alone funding discretionary needs.o First Nations are at the whim of federal political parties who have different ideologies and approaches to First

Nations.

Own Source Revenues

Section1


5

Opportunities

Own Source Revenues

First Nations generate about as much in own source revenues as they generate from government transfers, and the trend is for them to gain even greater access to own source revenues.

o Canadian courts continue to render decisions that effectively require resource companies to partner with First Nations in their traditional territories.

o First Nations are growing businesses and developing real estate and infrastructure at a record pace.o First Nations are raising revenues by sharing the tax base with federal and provincial governments and imposing

taxation on reserve.

Own Source Revenues

Section1


6

Challenges

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.

o Governments have been clawing back own source revenues, by aggressively taxing income generated off reserve, forcing consolidated reporting and then deducting own source revenues from federal transfers to First Nations.

o Own source revenues are very unevenly spread out across the country. Some First Nations have own source revenues that dwarf their government transfers. Others have almost none.

o Most First Nations have not diversified their own source revenues, or put a plan in place to build community wealth in a systematic manner.

Own Source Revenues

Section1


7

Challenges (Continued)

Own Source Revenues

o Many First Nations have legacy structures that do not maximize tax efficiencies, or incorporate best practice governance.

o In most cases community members, were never consulted about how to capture and grow own source revenues. o Most First Nations do not have access to the tools and experts needed to analyze, select and manage business and

investment opportunities.o Even where First Nations have access to experts, projects often call for a multi‐disciplinary approach.o Outside experts are usually engaged for specific assignments; when what is needed is ongoing support and

assistance.

o Most First Nations in Canada have economic development corporations (EDCs) that are kept separate from portfolio investment and activities that take place off reserve.

Own Source Revenues

Section1


8

Section 2The Opportunity

9

The OpportunityThe Opportunity

Section2

A new approach to building wealth

Recognizing the importance of own source revenues, and the challenges faced nationally by First Nations, the opportunity is for First Nations to develop and implement sovereign wealth strategies to improve their quality of life and achieve financial independence.

o EDIP Sovereign Wealth Solutions is a platform that allows some of Canada’s top advisors to work with First Nations to develop and implement their own customized sovereign wealth strategies that take into account each community’s economic opportunities and investment portfolio.

o EDIP’s multi‐disciplinary team of advisors works with First Nations to put in place tax‐effective structures that give community leadership and their trusted advisors the tools, resources and ongoing support necessary to maximize their own‐source revenues and focus on building wealth for future generations.

o The goal is to reinforce sovereignty, supplement government revenues, achieve financial independence and improve quality of life for the community.


10

Section 3EDIP Sovereign Wealth Solutions

11

EDIP Sovereign Wealth SolutionsEDIP Sovereign Wealth Solutions

Section3

Core Service Providers

EDIP Sovereign Wealth Solutions has assembled a multi‐disciplinary team of experts, including lawyers, tax experts, accountants, consultants, financial advisors and others, who have their own practices, businesses and firms.

o The core service providers include Howard Morry and his team at Pitblado Law, Gary Kissack and his team at Fogler Rubinoff, Neil Philcox and Sean Holt and their team at Grand Basin Capital Group, Scott Carleton and his team at Indigenous Financial Solutions, Gabrielle Ollinger, Walter Manitowabi, and Dan Ollinger.

o The team came together because the integrated suite of services required by First Nations cannot be delivered by any one firm or company.


Getting Started

12

Back Office


The team has a back office to help them manage projects, and access purpose‐built tools, templates and systems.

The back office allows the team to deliver an integrated suite of services that ensures uniformity, quality control, risk management, timely service delivery and privacy.


Section3


13


Section3

Expertise, experience and ability

EDIP's tools are also available to First Nations to help them manage their EDCs and sovereign wealth strategies.

o Service providers are selected for expertise, experience and ability to work well with the team. The EDIP team will change over time in order to ensure the best experts are available to First Nations, while maintaining continuity and core expertise. EDIP will also have some experts on the platform on an ad hoc basis.

o EDIP works with a First Nations trusted advisors, who are given access to EDIP's proprietary tools and templates.


14

Section 4EDIP Suite of Services

Setting Goals & Objectives that inform Strategy

Getting Started

15

EDIP’s Suite of Services

EDIP's team of advisors provide First Nations with a suite of services centered around putting in place an integrated sovereign wealth plan dedicated to improving quality of life and achieving financial independence.

Helping to define goals, objectives,

strategy

Designing the Best Practice

Structure

Establishing the structure

Finalizing the Sovereign Wealth

Plan

Recommending the ongoing management

plan

EDIP Suite of Services


EDIP Suite of Services

Section 4

16

EDIP Suite of ServicesEDIP Suite of Services

Section 4

Due Diligence and Discovery

There are a number of phases involved in developing and implementing a sovereign wealth plan:

The due diligence and discovery phase determines the community's current situation, its investment opportunities and what it would like to achieve through its 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.

EDIP may also be able to help access funding to support the costs of developing and managing a sovereign wealth strategy.


17


Section 4

Strategy

The EDIP team works with leadership and the community to develop a sovereign wealth strategy that includes both economic development (ED) and the community's investment portfolio (IP).

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.


18


Section 4

Statement of Policies and GuidelinesA community's wealth strategy will include (among other things) the following areas:

o Respecting the community's traditions, values and environment.

o Establishing specific targets for income and capital appreciation.o Planning for scheduled cash distributions and integrating cash flow projections into community's planning

and priorities.o Working with the community's portfolio managers to integrate the community's portfolio of marketable

securities into the sovereign wealth strategy.o Helping develop an economic development strategy that is focused on building capacity and providing the

right conditions for local business success.


19


Section 4

Statement of Policies and Guidelines (Continued)A community's wealth strategy could include (among other things) the following areas:

o Education, training, mentoring, knowledge transfer and advancement opportunities for community members.

o Building a private equity portfolio focused outside of traditional territory.o Raising revenues through foundations and other charitable sources.o Accessing program funding, and (if desired) putting in place systems to raise money through taxation of

commercial interests. o Diversifying the community's wealth portfolio across private equity, real estate, infrastructure, marketable

securities, and projects.


20


Section 4

Structure

In addition to working with leadership and the community to develop a wealth strategy, the EDIP team will also help the First Nation develop a best practice "structure" to house and govern the sovereign wealth strategy. This structure will introduce a number of features, among them:

o Best practice governance, including accountability and transparency.o Tax efficiency for on and off reserve business and investment income, and for status employees.

o Risk management, particularly to protect community assets.o Avoiding clawbacks from federal transfers, and navigating requirements to consolidate financial statements.

o Putting in place a "plug and play" structure so that each new investment will integrate into the existing structure.

o Putting in place a reinvestment and distribution policy to decide on when to reinvest and when to distribute.o Building a community trust that ensures that distributions are tied to community priorities.


21


Section 4

Implementation

Once the community leadership endorses the sovereign wealth strategy, the plan and structure are put in place.

o This phase includes creating and organizing the legal entities and establishing policies. o It also includes transitioning current holdings into the new structure, and obtaining necessary tax rulings

and legal opinions.


22


Section 4

Ongoing Support

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.

EDIP can fill the gaps that a community has in their sovereign wealth team. This phase includes: o Periodic assessments, appraisals and valuations to facilitate accurate and transparent reporting. o Helping the community access capital and generating, screening and selecting business and investment

opportunities.

o Helping identify and manage projects.o Sourcing the right expertise for particular projects.o Finding joint venture partners and negotiating investment and business arrangements.

o Providing "dashboard" reporting and access to systems and tools to help management measure key metrics and assess progress against goals.


Ongoing Management Plan

Getting Started

23


Section 4

Ongoing Support (Continued)Members of EDIP's team can also provide support for communities that are not ready to implement a sovereign wealth plan.

These services can be provided on EDIP's platform or directly by EDIP's service providers and their firms.

The First Nation will put in place the best EDIP team for ongoing governance and management of its sovereign wealth strategy:

Ongoing Management &

Support


Getting Started

24


Section 4

Pricingo Clients enter into a formal engagement with EDIP and the service providers. EDIP will collect and distribute

fees, for itself and the service providers, in the way that a project manager does. o The fees 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 typically 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 typically 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.


Section 5EDIP’s Vision and Values

Getting Started

26EDIP Sovereign Wealth Solutions ~ Supporting First Nations Sovereignty and Financial Independence

EDIP’s Vision and ValuesEDIP Vision and Values

Section 5

Vision and Valueso EDIP's mission is to give First Nations the sovereign wealth planning tools, resources and support necessary

to achieve financial independence. o EDIP's vision is a world in which First Nations achieve financial independence. EDIP and its partners believe

that First Nations need to be in a position to control their own destiny. o EDIP's approach has the potential to be transformational, providing First Nations with the framework, the

resources and the expertise to help them realize their dreams through a structured and systematic sovereign wealth strategy.

o EDIP will work with government and foundations to assist communities who cannot afford the team. Service providers may also be able to provide financial assistance through discounts to selected clients.

o EDIP's longer term vision is to establish a "think tank" alongside the platform that will work in collaboration with First Nations and their institutions to help communities reimagine what they can become with a successful sovereign wealth strategy that gives them access to a sustainable, growing cash flow.

Contact us

27


[email protected]

Supporting First Nations Sovereignty and Financial Independence EDIP Sovereign Wealth Solutions


workshop 2015 - home - cando 2015 morry kissack manitowabi firse the opportunity edip ign3 h...

Documents