Haveapulse

[bluefargo]

Haveapulse

You pose many good questions

You mentioned the difficulty some communities are having raising money for new projects. This does't surprise me given the fact that many of the local investors in those communities were stiffed by the hog barn fiasco of a few years ago.

I think it's helpful to have local investment if possible.

The most important element in a successful project, in my opinion, is a good business plan. ie. the project must be there to make a profit.

To put it another way: a profitable project will result in community developement. A project done just for community developement will likely not result in a profitable enterprise.

[checking]

Have you ever watched a BBC or CBC version of the "Dragon's Den". Those capitalists seldom invest in an idea, or product without asking for a huge percent of the idea or product being pitched at them, and only if they see potential. Ideally they want to have it in the marketplace with signed orders, and proof that profit can be made. Only the lucky few get their money. The vast majourity are given sound advise to please don't waste any more or your time and personal money on theses bad ideas. They know, as you know , that only 1 in 10 businesses survive the first year. The farmer dragons are telling you, at least on this site, they don't like your pitch, or your idea of a mega project. Lower your aim. Take your refund, and value add to your own farm, if you are not succeeding at what you are doing now. Should the railways not prevail, WGRF will receive more of a dressing down than you have, if it keeps this money. I left it with $2000.00 of check off last year. I assure WGRF that will never happen again, if it doesn't do the right thing and turn the $60 million over to its owners.

[classicalliberal]

Agricultural policy in Canada is relatively socialist. We actually lose marks in the economic freedom indexes because of our various quotas, coercive marketing boards, tariffs, etc, but grain shipments to ports are the only thing that I am aware of that is still price regulated. It is likely political suicide if they try to change it.

[bucket]

I think the project at Gardiner dam would have went except they did not want to tap into investors using flow thru shares. The entire junior oil and gas sector was built on that. Why they just wanted my money so that I could deliver my grain to them instead of using my money and I get a return with shares or dividends - is beyond me. I said if you want my money - I want a tax break and a return - they didn't get my money.

Had it been set up differently - I would have invested.

They should of partnered with the craik feedlot that had some money and then the whole thing would have made alot of sense.

[gustgd]

bucket

Where could someone get some more info on flow through shares I was at a meeting last week and a fellow was mentioning them.

Are flow through shares available to Ag sector projects?

If not why not?

Is there lobbying on a provincial or federal level that needs to happen

[mcfarms]

Flow through shares using the resource model

An article from profit


There aren't many legitimate tax shelters for high-income entrepreneurs, let alone many that offer the potential for lucrative returns. But that's the promise of flow-through shares. Issued by Canadian companies in the energy or mining sectors to raise funds for exploration, flow-throughs give investors juicy tax breaks and the opportunity for capital appreciation based on new discoveries and rising commodity prices. "And when one of them gets a hit," says John Archer, an investment adviser with RBC Dominion Securities in Montreal, "it can really be an investment home run."

Here's how they work. Resource companies typically have huge upfront exploration costs and little or no revenue. That means they don't need the tax deductions they would incur as income-generating companies. To finance that exploration, they'll issue shares and allow the tax deductions to "flow through" to investors.

So, what kind of tax savings can you expect? Flow-through shares offer federal and provincial tax deductions of 100% of the investment. An investor with a marginal tax rate of 46% who purchases $10,000 in flow-through shares will garner a tax benefit of $4,600, cutting the real cost of the investments to $5,400. When the shares are sold, the 50% inclusion rate on capital gains will mean a tax hit of 23%.

Investors who purchase "super" flow-through shares (shares in qualifying junior mining companies engaged in grassroots mineral exploration) may be eligible for an additional 15% tax credit.

Still, flow-through shares are not for everyone. "The resource sector is cyclical by nature, and exploration is risky," says Archer. "You need to have the income, the assets and the fortitude to withstand a little portfolio volatility." If the exploration firm comes up empty-handed and the stock tanks, even that hefty tax deduction might not cover your losses. You're best positioned to take advantage of flow-throughs if you're in the top marginal tax bracket or have received a lump sum that will boost your taxable income in any given year, and have used up your RRSP contribution room.

Flow-through shares are typically issued in the fall to attract investors who are actively looking for last-minute tax deductions, or early in the year when people realize they've missed tax savings. While shares can be purchased from resource companies, they're more commonly purchased as units in a limited partnership, which operates much like a mutual fund. (Several Canadian firms operate flow-through funds, including Front Street Capital and Middlefield Resource Funds, both of Toronto.) The latter option makes the shares more accessible, as well as reducing the risk through diversification.

When choosing a fund, consider the portfolio's mix. Some may contain mostly junior resource companies with spotty track records, while others focus more on major publicly traded companies, says Ross Young, principal with Calgary-based Secure Capital Management, which specializes in alternative investments. Seek out managers who have a history of getting good returns, too.

Resource companies often issue flow-through shares at a premium compared with their common shares. "They take into account that there will be a tax benefit to the buyer," says Young. "So, if their regular stock trades at $1, they [might] issue the flow-through shares at $1.25." But if the premium is too high, it's harder to realize returns. Experts agree that when the premium reaches 30%, there's no benefit to investors.

If you buy a flow-through fund, examine its fee structure. Some funds charge a sales commission (typically, about 6%) of the original investment, plus upfront or ongoing management fees and/or a performance bonus. Other partnerships charge a small annual management fee (say, 1%) or none at all, and then take between 10% and 50% of the profits in excess of a certain return on investment.

Young warns, however, that flow-throughs have no initial liquidity. To reap the benefits of the tax deduction, you must hold the shares for 18 to 24 months, after which you may sell them. (In the case of an LP, the units are typically rolled into a resource-based mutual fund.) "I wouldn't recommend that flow-through shares make up any more than 15% of a portfolio," adds Young. "Not unless you're heavily involved in the resource industry and you only want to invest in an industry you know."

[mcfarms]

This flow through share idea for ethanol or bio energy should meet the same criteria as junior gas producers not sure though may have to talk to my accountant.
Might be a possible way to finance some diversification/ value added as many of the same issues facing existing users of flow through also affect this sector as well.

[bucket]

The big thing is you tap into an new capital market instead of farmers.

The tree huggers should be buying them.

And they could fund the ethanol business this way.

If the feds put a 10 or 15% or higher blend requirement eventually a major would buy the ethanol plant as a turn key and pay good money not to do the startup costs. Thats where the return comes in.

[mcfarms]

As I understand it what they are "flowing through" in these shares is their expenses or losses which then the share holder can then write of their share of, if the venture is immediately profitable at low cost these share would not work . An ethanol venture for example would flow through initial costs and perhaps losses and would not retain them to book against future profits and tax liabilities. Not all companies that anticipate profit and a reasonable rate of return on investment would this work for, again it'll be something I will have to talk to the pro about.

[mcfarms]

If you have any more questions or need more information on this subject please type in G O O G L E . C O M I'm not only good looking and brilliant I have a good search engine. LOL

[parsley]

Go to the Wheat Board for funding.

The CWB have unlimited money in the pooling acoounts

The CWB have unlimited money in the consolidated revenue accounts.

Both accounts are automatically replenished continuously and without stipulation or reservation. Pars

[parsley]

The CWB can well afford to declare themselves a major funder for both a biodiesel plant and an ehanol plant in the West.

For a pilot project, the CWB should build both in Manitoba. Close to main Street in Winnipeg. I would suggest China or Cuba as funding partners. Since CWB Director Rod Flaman has a professional background in engineering, the CWB could appoint him as beo of the biodiesel and eeo of the ethanol. Pay him $1.5 M for managing both for the trial period. Saves 1/2 a Million right there. After the trial pay him the same as the RBC recieves.

Farmers will own their own operation, with the Minister and 10 directors working on your be half. Pars

[TOM4CWB]

haveapulse,

There is a GOOD reason the farmers on this site... that commercially grow grain... are still solvent and in business.

THESE GROWERS HAVE A SECOND INSTINCT... AND ARE WISE ENOUGH TO PRESERVE LIMITED CAPITAL.

Weather, Recession, Marketing scams, Gov. spending games... most all of us have seen these come and go... dozens of times.

If we were not 'natural' Conservatives... that understand how money flows like water... to those who think they 'need' it (our money) worse than we do... we would be broke.

Don't buy into any ocean front properties in AB or SK... or... the 'single desk' at 423 Main... neither of which can prove economic reality and societal viability with real results that can be taken to a bank!!!

Most 'dream' operations... go belly up... and get bought up at 10 cents on the dollar... Do you really expect grain growers to be the fools to give away the 90 cents?

If we growers have any brains... we are wise enough to see these schemes comming 100 miles away!

By the way... the SK pulse levy is 1% (not .5%) isn't it?

[bluefargo]

I checked my last stub. The sask Pulse Board levy is indeed 1%

[parsley]

I didn't bother quibbling about the amount. It will increase more than 1% in the future, anyhow. Just wait for a bit. Compulsion addicts will justify 5% the same way they justify 0.5%.

The amount is not the issue.

The Compulsory Directors need tied to the stoneboat, though, and dragged for a bit, to clear their heads in the trailings.

Pars