Having an impact with your portfolio:

The Co-operative also has a handful of projects that employ net metered solar. Revenue is generated from these as the Co-operative sells electricity generated by solar to the property where the project is located. To mitigate risk, OREC partners primarily with institutions, public entities, and municipalities.

The minimum investment amount in OREC Preference Shares $2,500.  As all Class A and Class B Preference Shares are valued at $500, new investors must purchase at least five shares. For members looking to invest through an RRSP, TFSA, RRIF or RESP, the minimum investment starts at $5,000.  Thus, new investors must purchase at least 10 shares valued at $500 each. Thereafter, investors can purchase as little as one additional share for $500.

Over the past five years, Preference Share holders have received an average annual dividend payment of 3.7%.

All Class A and Class B Preference Share holders receive the same dividend at the same time as all investors, regardless of the series in which shares were issued. Dividends are issued at least once annually (typically in the late fall or early winter) based upon the residual share value at the time.  All investors receive an investor statement when a dividend has been issued.  Statements are emailed or mailed depending on the investor’s preference at the time of subscription. For unregistered shares, dividend payments will be deposited directly into the bank account on file or a cheque will be mailed to the address on file, again depending on the investor’s preference at the time of subscription.  In February, a T5 is issued for income tax purposes which are either emailed or mailed based on the information on file. For shares held within an RRSP, TFSA, RRIF or RESP, dividends are held as cash within the account until the holder purchases additional shares (when available) transfers the cash to another RRSP (fees may apply) or withdraws said cash (fees may apply).

With the Co-operative’s Class A Preference Shares, capital is returned annually commencing in year six of the 20-year term by redeeming shares at a rate of 1/15 the original investment, with all shares redeemed and capital returned by the end of the 20th year. Because shares are redeemed at their par (face) value there is no capital gain or loss, and there is no need to maintain an Adjusted Cost Base. The capital will be paid out as cash. Each time that shares are redeemed the new share balance will be reflected in the member’s annual statement.

Beginning in 2018-19, the Co-operative is also offering Class B Preference Shares, where capital is returned as a lump sum at the end of year 10. These are investment products that are meant to fit better with the term and nature of the net metered projects that OREC is now developing.

No, dividends on OREC Preference Share are non-cumulative. Each year’s dividend is based on a member’s residual share balance.

OREC Preference Shares dividends qualify for the basic tax credit but are ineligible for an “enhanced” tax credit.  You will receive a T5 for every tax year that sets out your dividend information for the year in the “other than eligible” boxes:  total dividends for the year (Box 10), the grossed-up taxable amount  (Box 11), and your tax credit (Box 12).

Yes. Members can purchase OREC preference shares as part of their annual RRSP or TFSA contribution. Shares can also be purchased with a transfer from another RRSP or TFSA. Read the FAQ section that specifically addresses investments through an RRSP and TFSA below.

If you hold Shares within an RRSP when you turn 71 years old, you must convert them into a Registered Retirement Income Fund (RRIF). OREC offers that option with Caldwell Securities Limited,  as well as the option to invest through a Registered Education Savings Plan. More on investing via RESP below.

No, only the value of the residual share balance. OREC has Directors and Officers, Liability, and Equipment Insurance.

It is OREC’s intention to have new projects and share offerings each year, but this is not guaranteed and is dependent on project availability, energy policy, and Financial Services Commission of Ontario approval.

Not currently, however, we are working on creating an option for members to be paid in OREC shares rather than cash.  Previous investors will always have the option to purchase as little as one share for $500 when Preference Shares are available.

There is no market mechanism for selling shares.  However, shares are transferable among existing and new investors.  OREC has facilitated a dozen transfers to date at no cost to the seller or buyer.  The Board of Director may consider buying back shares if there is sufficient cash flow at the time of request.

In the very unlikely situation that OREC dissolved, each member’s preference share value would be based upon how much of their capital had been returned to date.  Capital is returned annually commencing in  year six of the 20-year term by redeeming shares at a rate of 1/15 the original investment, with all shares redeemed and capital returned by the end of the 20th year.

Membership shares will lapse on the death of the member. The value of outstanding preference shares will be paid back to the Estate.  Dividends would be paid as appropriate based on the outstanding capital.  The executor also has the option of transferring existing shares to a different co-op member.

You will be able to maintain any purchased securities but your membership share will be terminated.  You will no longer have voting rights and you will not be able to purchase new securities.

A $55 annual fee is charged for each registered account you hold with CWCF, which can be automatically deducted from your dividend payment. A $65 annual fee is charged for each registered account you hold with Caldwell, which can be automatically deducted from your dividend payment.

Members may purchase shares within their annual TFSA limit or transfer funds in from another TFSA to purchase shares. Finally, a member may buy preference shares outside of a TFSA and then decide to put them in their self-directed TFSA in a subsequent year. Dividends earned on shares inside the TFSA are not taxed.

There is no annual limit for RESP contributions, yet the lifetime limit for contributions to a RESP is $50,000. Every year, the Canadian Government can also contribute 20% of your annual contribution (up to $500) as well. Finally, a member may buy preference shares outside of a RESP and then decide to put them in their self-directed RESP in a subsequent year. Dividends earned on shares inside the RESP are not taxed.

For more, see the Canadian Revenue Agency’s website.

If you currently hold Preference Shares in an RRSP that is coming to maturity, you have the option of converting those shares to a RRIF with Caldwell Securities Ltd. This will involved transferring your Shares held with CWCF to Caldwell, which OREC can facilitate.

If you do not wish to take this course, you have three options: Option 1: Transfer the shares into a RRIF with an eligible institution, an option that is not readily available but will likely be in the next couple of years. Option 2: Withdraw shares from the RRSP, pay income tax on the withdrawn amount, and maintain the now unregistered shares in OREC. Option 3: Sell shares back to OREC or another member, transfer the funds out of CWCF to an RRSP account at another institution that can convert the funds into a RRIF. On the other hand, cash accumulated from dividends and return of capital in your OREC RRSP can be transferred to a RRIF account with another institution as described above.

The minimum purchase within a registered account is $5,000.  We recommended investing at least $10,000 in order to offset the annual account fees charged by CWCF ($55) or Caldwell Securities Ltd. ($65) to the account holder.

When the Co-operative issues a dividend or returns a portion of your share capital, a cheque is sent directly to CWCF or Caldwell (depending on who is holding your account) and deposited into your account.  That money is considered “cash” in your account behind the tax shield but it is not earning a return. The options available to you depend on the financial institution holding your investments.

Your options with CWCF are to:

1. Continue earning a return by purchasing as little as one share for $500 (when available) without incurring fees.  You can top up by making a new contribution to your account in the event that you do not have $500 in your account.
2. Purchase shares in other co-operatives that employ the services of CWCF.  Contact CWCF for a list of such options.
3. Make a partial withdrawal from you CWCF account.  You will be charged $50 by CWCF for this option and you will be required to claim the withdrawal as income for that taxation year.

To withdraw funds your CWCF account, you will need to make a request, in writing, to the Canadian Workers Co-operative Federation (CWCF) who administers your self-directed account. This request needs to include your name, account number, current mailing address and the amount you wish to withdraw. You should also state you are aware of the required Canadian Revenue Agency withholding tax as well as the CWCF withdraw fee ($50 partial withdraw/$75 to close your account) which will be taken from the amount you are requesting prior to the cheque being sent to you. Questions can be directed to: Josh Dyke, RRSP Program Manager #1 – 41 Aberdeen St., Kentville, NS B4N 2M9 Tel: 902-678-1683 Email: josh@canadianworker.coop Website: www.canadianworker.coop

Investment Notes are available to members, and, for the first time, non-members. Non-members are any individuals who reside anywhere in Canada.