Glossary

The Aboriginal Investor

Until very recently, Aboriginals who invested their savings in financial institutions with head offices on Indian reserves were eligible for a tax exemption on income from assets generated by such savings. The Tax Court of Canada and the Federal Court of Appeal recently rendered two judgments that cast doubt on the principle of non-taxation of income from assets generated by savings invested by Aboriginals on a reserve. Judges were of the opinion that financial institutions generally bring such savings to profit through traditional financial markets. Thus, the income from an asset is generated outside the reserves and therefore subject to taxation. Consequently, contemporary Aboriginal investors are looking for investment opportunities that generate tax-free investment income. Abscan fills this precise need by using investors' money to finance quality Aboriginal projects inside Indian reserves.

The Aboriginal Borrower

Traditionally, Aboriginals, and those living on reserves in particular, have found it difficult to obtain financing of any nature. One reason is Section 89 of the Indian Act providing that the property of an Indian situated on a reserve cannot be seized. Another reason is the distance separating many Aboriginal communities from the main financial centres. A third reason is the lack of knowledge of financial centres concerning the particularities of the Aboriginal world. The Abscan project is built around three main areas of development in the Aboriginal market. These are Aboriginal needs in real estate, the needs of Aboriginal governmental authorities and the needs of Aboriginal businesses. Presently, the Aboriginal market offers sound investment opportunities insofar as appointed portfolio managers have good knowledge of the ins and outs of this market. We offer Aboriginal investors the opportunity to buy Abscan corporate bonds, the product of which will be invested in projects considered interesting, safe and aligned with requirements of applicable fiscal laws. Among other things, the interest generated by loans will be used to pay interest payable on the corporate bonds.

© 2010 Aboriginal Savings Corporation of Canada