Skyline Wealth Management FAQ

FAQ

You’ve got questions, we’ve got the answers.

What is an "Accredited Investor" in Canada?

An “Accredited Investor” is a term used by Canadian securities regulators to describe individuals or entities that meet certain requirements under securities laws, which allow them to participate in certain types of investments that are not available to the general public.

What are the requirements to be considered an “Accredited Investor” in Canada?

In Canada, an Accredited Investor, as defined by National Instrument 45-106, can have several definitions. Below are the most commonly relied upon definitions by Skyline Wealth Management Inc. (“Skyline Wealth Management”) investors:

  • They have a net worth of at least $5 million.
  • They have an annual income of at least $200,000 ($300,000 for couples) for the past two years, and expect to maintain that income level in the current year.
  • They have net financial assets (excluding their primary residence) of at least $1 million.

Why do securities laws have different rules for “Accredited Investors”?

The purpose of having different rules for “Accredited Investors” is to balance the need to protect investors from risky or fraudulent investments, while still allowing sophisticated investors to have access to a wider range of investment opportunities. The assumption is that “Accredited Investors” have the knowledge and experience to evaluate and manage the risks associated with these types of investments.

What are the requirements to be considered an "Accredited Investor" in Canada?

This image does not constitute a complete list of accredited investor qualifications. Visit Ontario Securities Commission (OSC) website for a detailed list of all possible exemptions.

General Questions

What are Exempt Market Products (EMPs)?

Exempt Market Products (EMPs), also known as Exempt Market Securities, are investment products that are private investments. They do not trade on the public markets. EMPs are exempt from meeting the prospectus requirements and require less disclosure than other products such as mutual funds. Investors who wish to invest in an Exempt Market Product (such as Skyline Wealth Management’s investment product offerings) must qualify under specific exemptions outlined in National Instrument 45-106 Prospectus Exemptions – please see above for more detail

What is an Exempt Market Dealer (EMD)?

An Exempt Market Dealer (EMD) is an exempt market securities dealer registered under Canadian securities legislation. Skyline Wealth Management Inc. (“Skyline Wealth Management”, or “SWMI”) is the exclusive EMD for investment products created and managed by the Skyline Group of Companies. In accordance with securities law, the Skyline Wealth Management team is comprised of registered Dealing Representatives (Advisors), a Chief Compliance Officer, and an Ultimate Designated Person.

Can I invest my registered accounts (RRSP, RRIF, TFSA …)?

Yes! All four of Skyline’s investment products [Skyline Apartment REIT, Skyline Retail REIT, Skyline Industrial REIT, and Skyline Clean Energy Fund] are qualified investments for registered accounts.

What is a "DRIP" and how does it work?

The “DRIP”, or Distribution Re-Investment Plan, allows an investor to automatically re-invest his or her monthly distribution and purchase additional Units automatically. As an alternative to the DRIP, the investor may receive monthly distributions directly into his or her bank account via EFT (electronic funds transfer).

How are the distributions taxed?

Taxation will depend on your income level, the type of account(s) through which you choose to invest, and which product(s) you choose to add to your investment portfolio. We suggest consulting with your accountant or tax professional to assess your proposed investment and continue to consult with them in an ongoing basis moving forward.

To learn more about how the Skyline investment products are taxed, and whether they may be a good fit for your portfolio, get in touch with a Skyline Advisor.

How can I sell my investment? Are there any minimum hold periods or penalties/fees to redeem?

All of Skyline Wealth Management’s investment product offerings are classified as Exempt Market Products (EMPs) and therefore are not traded on any secondary markets; investment units are tendered for redemption directly to the Issuer. There is an initial 4 month hold period on any new investments. After this time, you are free to request a partial or full redemption of your holdings at any time.

When investing using non-registered funds (cash) there are no associated account opening or closing fees. When investing using registered funds (RRSP, TFSA, etc.) we work with a third-party Trust Company that has its own fee schedule.

We encourage you to reach out to a Skyline Wealth Management Advisor to learn more about our investment process. We also encourage you to read through all offering documents prior to investing.

Real Estate Investment Trust (REIT)

How are the REIT Units Purchased?

Skyline Wealth Management is the exclusive Exempt Market Dealer for all five Skyline Wealth Management investment product offerings1, meaning that you must work with a registered Skyline Wealth Management Advisor to purchase Skyline securities for your investment portfolio.

1  Skyline Apartment REIT, Skyline Retail REIT, Skyline Industrial REIT, and Skyline Clean Energy Fund.

How is the REIT Unit price/value determined?

A simplified explanation of the valuation process can be described in four steps:

1) Evaluate the REIT’s portfolio of assets; determine market value.

2) Evaluate the REIT’s outstanding debt.

3) Subtract the REIT’s outstanding debt from its market value. This leaves you with the Net Asset Value (NAV), or the total value of investor equity, within the specific REIT portfolio.

4) Divide the NAV by the number of outstanding REIT Units (currently held by investors). This calculation determines the REIT’s Unit value.

How often are the REIT Units re-evaluated?

The Unit price is evaluated quarterly when the REITs’ IFRS valuations and appraisals occur. Each REIT’s board of trustees reviews the final numbers to determine the appropriate market value of the Units. In addition there are four other events that could trigger a Unit re-evaluation:

1) The launch of a new Offering Memorandum (OM).

2) The closing of an Offering Memorandum.

3) When the REIT makes an acquisition (purchase) transaction with a purchase price that equals 10% or more of the REIT’s total value.

4) When the REIT makes a disposition (sale) transaction with a sale price that equals 10% or more of the REIT’s total value.

Skyline Clean Energy Fund (SCEF)

What is a “clean energy asset?”

This is a term used to describe any type of energy-producing system that uses renewable sources like the sun, wind, and water power.

Currently, SCEF is comprised of solar energy assets (such as rooftop solar systems and ground-mount solar fields).

What types of contracts may the Skyline Clean Energy Fund solar assets be under?

The Skyline Clean Energy Fund is structured to accept solar energy assets under any of the three following types of contracts:

1) Feed-In-Tariff (FIT; pronounced “fit”) contracts, which were introduced in 2009 with the Government of Ontario’s Green Energy Act to encourage the development of green energy sources.

In this type of contract, the provincial government is lawfully required to purchase all of the electricity produced, at a set price, for the remaining term of the contract.

2) Renewable Standard Energy Offer Programme (RESOP; pronounced “REE-sop”) contracts, which were introduced in 2006 by the Government of Ontario to encourage small green energy facilities to participate in the electricity supply system.

In this type of contract, the provincial government is lawfully required to purchase all of the electricity produced, at a set price, for the remaining term of the contract.

3) A Power Purchase Agreement (PPA), which is a private agreement between a private business/landowner and SCEF. In this type of agreement, the private business/landowner pays SCEF for the energy produced on its (the business/landowner’s) property.

Any excess energy not used by the private business/landowner is sent to the grid for general use and comes back to the private business/landowner in the form of a hydro credit.

How are SCEF Units Taxed?

SCEF Units generally do not pay distributions; instead, the cash is endeavoured to be reinvested into accretive acquisitions. As a result, SCEF Unit values may change on a more frequent basis than other Skyline Wealth Management investment product offerings. Therefore, there will either be a capital gain, or capital loss, at the time you choose to redeem your units.

In the case of a capital gain, this will be included into one’s taxable income at the prevailing capital gains inclusion rate to determine one’s taxable capital gain.

In the case of a capital loss, the taxable capital loss (determined by multiplying the capital loss with the prevailing capital gains inclusion rate) may only be applied against taxable capital gains.

To learn more about how Skyline Wealth Management’s investment product offerings  are taxed and whether they may be a good fit for your portfolio, get in touch with a Skyline Advisor.

Taxation will depend on your income level, the type of account(s) through which you choose to invest, and the investment product(s) that you choose to add to your investment portfolio. We suggest consulting with your accountant or tax professional to assess your proposed investment, and continue to consult with them on an ongoing basis moving forward.

Why is Skyline Group of Companies investing in clean energy?

Skyline Group of Companies has years of experience in the clean energy industry through its facilitation of environmental initiatives for its real estate portfolios. This includes the installation and management of 55 rooftop solar systems across the Skyline Apartment REIT, Skyline Industrial REIT, and Skyline Retail REIT.

Skyline recognized an opportunity to use its years of expertise in this field to provide investors a unique, sustainable investment product.