Page 20, January . .,

business

The governmént is. now
exchanging that demand
note for 15 million BCRIC
common shares, of which
approximately 12 million are
to be given to the residents
of B.C. For the time being,
the government will hold
three million shares, or 20
per cent of the corporation’s
initial capitalization.

ASSETS $400 MILLION

According to BCRIC’s
president, David Helliwell,
the gross value of the cor-
poration’s assets (before
deducting the liabilities of its
subsidiaries) now exceeds
$400 million. Their “book”
value — that is, the value at
which they are carried in
BCRIC’s balance sheet, less
liabilities — is between-$150
million and $180 million.
These assets consist of:

(1) 9,888,203 shares, or 81
per cent of the outstanding
‘common stock, of Canadian
Cellulose Co. Ltd. (CanCel).
This company operates pulp
mills at Prince Rupert and
Castlegar, and its sales are

ae

‘. North Shore News

-Apiece of the ac

expected to exceed $200
million in 1979. The present
market value of BCRIC’s
shareholding in CanCel is
approximately $84 million.

~(2) 100 per cent of the
common shares of Kootenay
Forest Products Ltd., a
medium-size lumber and

plywood manufacturer |

located near Nelson. Its
annual sales are  ap-
proximately $25 million.

(3) 100 per cent of the

common shares of Plateau
Mills Ltd., a lumber
producer near Vanderhoof,
also with sales in the $25
million range.

(4) 3,471,375 shares, or, 10

per cent of the stock, of”

Westcoast Transmission Co.
Ltd. Westcoast owns and
operates a natural gas
pipeline from northeastern
B.C., supplying customers
(such as B.C. Hydro) jn the
southern portion of the
province, and in the U.S.
northwest. It is also a
partner in the Alaska
Highway gas _ pipeline
project. This investment has
a market value of ap-
proximately $41.6 million.

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. (5) Oil and gas rights, which
-cover 2.3 million acres in the
general Fort St. John-Fort
Nelson areas. They entitle
BCRIC to enter into ex-
ploration agreements on the
land — called “farmouts” —
with other companies.
BCRIC is precluded by its
charter from doing any work
itself — its partners (“the
farmees”) do the drilling at
their own expense, in return
for which they can earn an
interest in the acreage and in
any oil and gas that may be
produced.

GAS FOUND

The ultimate value of this
acreage will depend on the
success of the various
drilling programs. Helliwell
announced recently that gas
had been found in the first of
three wells currently drilling
the Fort St. John area. No
further details are available
yet.

BCRIC’s present income
comes: primarily from
dividends paid by CanCel
and Westcoast Tran-
smission. Based on _ the
current dividend rates of
these two firms, BCRIC’'s
shareholdings generate

‘ about $5.7 million in annual

income. This income is not
subject to income tax, in-

cidentally, because
dividends paid by one
Canadian company to

another are not taxable in
the hands of the recipient
company.

Helliwell has described
BCRIC’s investment mix as
“a blend of income yield

(Westcoast Transmission),
immediate earnings growth
potential (Canadian

Cellulose), and high return-
high risk potential (oil and
gas activity)”.

BCRIC does not intend to
“stand pat” on its present
asset base. Its president has
said it will seek out further
opportunities for investment
— it is possible these could
be in manufacturing as well
as in resources development
in British Columbia.

DISCOUNT PRICES

The pace and extent of the
corporation’s future growth
will hinge on its success in
raising additional capital. As
a first step, it will offer
common shares from its

tion for all of US...:.

treasury at a price to be
announced later. They will,.
however, be priced at a
discount from their ap-
praised book value, which is

in the range of $10-$12 per —

share. . 7
The provincial govern-
ment's initial 20 per cent
interest in BCRIC will be
reduced subsequently to the
extent that additional shares.
are a by the public.

How to

purchase an RRSP

By JIM ROGERS

Life insurance companies,

banks, trust companies and —

credit unions all sell in-
dividual retirement plans,
known

_commonly = as
Registered Retirement
Savings Plans (RRSPs)-

These plans all have a
common purpose — to help
individuals accumulate
funds for retirement.

Because’ contributions
made to an RRSP by an
individual are deductible,
within certain specified
limits, from that individual's
otherwise taxable income,
such plans offer a means of
reducing the taxpayer's
income tax. The _at-
tractiveness of these plans is
further enhanced by the fact
that any growth in an RRSP
is sheltered from income tax
until the RRSP is éither
surrendered for cash or used
to purchase an annuity or
RRIF — in which case each
payment is taxed as income
when received.

The competition between
the various types of com-
panies which sell RRSPs is
fierce. To understand all the
various plans available is
virtually impossible,
especially with the abun-
dance of competing ad-
vertising and information
you, as the consumer, are
faced with. The following
publication may be helpful,
however, should you wish to
compare the various RRSP
plans available to you:

““SAYS iF YOU CAN’T LIST 12
WAYS TO EASE THE TAX BITE YOU
NEED OUR SERVICES’’

Please have your representative deliver my book and

on pial your
bilgation.

services. |

Name

understand

there is no

Address

City
Company

_. Postal

Home Phone

Business Phone

The government will not-be.
represented in BCRIC's
management or on its board
of directors.

At the next annual
meeting, following com-
pletion of the share issue,
the new public shareholders
will elect their own board of

directors (a shareholder
must own at least 100
registered shares to be

“RRSP-RHOSP Funds

Performance Survey and
Guaranteed Investment
Annuities,” Pirbeck In-

vestment Measurement Ltd.,
Sun Life Building, Montreal,
Province du Quebec.

The more general ways in
which the various RRSPs
differ are:

(a) Type of fund

The type of funds
available include guaranteed
interest, equity, mortgage or
some combination. How do
you feel about investing
money? Do you like to be
safe, secure — or do you
prefer to take some risk in
the hope of a greater gain?
Your own answers deter-
mine the kind of fund(s) you
should consider.

(b) Fees or commissions

What amounts will be
deducted from your deposits
or your gain to pay the
“handling charges?”  In-
stitutions don't handle your
money for nothing. Either
the return you are getting
has been adjusted downward
to allow the firm handling
your RRSP to make its
expenses and profit by the
difference between the
return paid to you and return
it has received by investing
your funds, or you are
paying directly a commission
or fee to the institution. Find
out which it is and how much
it is, in writing, before you
decide to involve yourself in
any particular plan. Satisfy
yourself that you will likely
get, your) money's worth
(performance and_ service)

. Durrant’s article on

(c) Net projected yield

entitled to vote on nth
company’ Ss affairs).

; The second article i
series will describe ‘wha
common shares are,. -ho
their value is determined an
how: they can be bough
sold.

(The second part of P; trie

BCRIC. will appear
week.)

before you put your firs
dollar into anybody's RRSP

Subject to the level of
guarantee, what net ret
can you expect -Over various
periods into the future?
What has happened in ‘th
past? The word “net” is used’
because

to reduce the tabular or.
gross return, and it is the
gross return which is most
often quoted to a
prospective RRSP customer.

Conclusion

A final piece of advice:

When considering the
purchase of an RRSP a
after having receiv

satisfactory answers to your
questions, ask the company
with which you are con-
templating investing- your
savings to provide you with a
one-page summary

recommended plan or plans
showing the projected cash-"
in value of your savings after ::
each of the first 10 years and:
each 5 years thereafter until ©
your planned retirement —
date. :

The deadline for RRSP :
contributions which can be
tax deductions against your |
1978 income is March 1, |
1979.

(The above ts the second and
final part of excerpts from
“Life Imsurance for,
Canadians” (Self-Counsel
Series) by Jim Rogers, a.
Vancouver insurance
consultant and broker.)

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