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International Lithium Corp Targets Zimbabwe for Growth, Set to Announce Mining Plans

Toronto Stock Exchange-listed exploration and development concern, International Lithium Corp (ILC), is preparing to announce the results of its exclusive prospecting orders (EPOs), valued at US$219,250, which will mark the beginning of its mining operations in Zimbabwe. This country has been identified by ILC as a key focus for its global expansion, highlighting its importance in the company’s future plans.

By Ryan Chigoche

ILC is a Canadian firm specializing in lithium and rare metals exploration, with strategic interests in Canada, Zimbabwe, and Ireland. Being listed on the TSX, one of the world’s largest trading platforms valued at nearly US$3 trillion, ILC is in a strong position to drive growth through its mining projects, particularly in regions that are rich in mineral resources like Zimbabwe.

In a statement, ILC expressed its optimism about Zimbabwe’s potential, saying, “We see Zimbabwe as a highly strategic target market. We have applied for and are optimistic about receiving EPOs there.” While the company is actively pursuing projects in Canada, such as the Raleigh Lake lithium and rubidium project and the Firesteel copper project, it is clear that Zimbabwe is a major focal point in its global strategy.

“We see our key mission in the next decade as making money for our shareholders from lithium and other battery metals while at the same time contributing to a greener, cleaner planet and less polluted cities,” the company said in a filing to the TSX. This mission includes maximizing the value of existing projects and exploring new opportunities, with Zimbabwe playing an important role in this vision.

Zimbabwe’s rich mineral resources and position among the top 10 global producers of lithium make it an attractive destination for ILC. The company emphasized that the government of Zimbabwe has adopted a more business-friendly approach in recent years. “Zimbabwe has a well-educated population with strong experience in the mining sector,” ILC noted, “and recent legislative changes show that lithium is increasingly taken seriously at the governmental level.”

In light of these developments, ILC pointed out some important legislative changes in Zimbabwe’s mining laws that have made the country even more appealing for exploration. These include a “use it or lose it” approach to mining claims and grants, the introduction of a 5% royalty on lithium (a rate previously applied to gold and platinum), and new regulations that prohibit the export of unprocessed raw materials.

ILC believes these changes create a promising environment for generating solid returns for its shareholders while also contributing to Zimbabwe’s economic growth. The company is mindful of the broader impact, aiming to provide local employment opportunities and support the country’s economic renewal.

“We believe there’s a real opportunity to capitalize on these changes,” ILC added. “We look forward to making more announcements as our plans in Zimbabwe progress.” With its focus on Zimbabwe alongside its ongoing projects in Canada, ILC is positioning itself to make significant strides in the global mining landscape, and the company’s next steps will be closely watched by industry observers.

Canada’s Allied Gold seeks listing on NYSE

Canada’s Allied Gold has started a process to apply for a listing on the New York Stock Exchange, joining an industrywide migration to the world’s top bourse.

The Toronto-based gold producer was advised that it meets the criteria for a listing in New York and expects a decision on an application in the first half of the year, according to Allied Gold’s CEO Peter Marrone. The company trades only on the Toronto Stock Exchange, but would join a long list of gold miners that trade on both Canadian and US exchanges.

New York’s status as a global hub for gold equities has expanded in recent years after a series of major gold deals transformed the industry and created two North American titans — Barrick Gold and Newmont — that trade in the US city. The concentration of industry-specific exchange-traded funds has also added to the appeal.

“Canada is a great place to be a mining company, but New York is the king of the mountain in terms of listing seniority,” Marrone said in an interview. “That’s where we want to be.”

Allied Gold’s Canadian shares have risen nearly 50% in the past year on the Toronto Stock Exchange, and has a current market value of C$1.44-billion.

Allied Gold, formed by Marrone and other Yamana Gold executives who left after it was acquired, operates three gold mines in West Africa that produce about 375,000 ounces of gold per year.

Dream Unlimited Corp. Reports Strong Fourth Quarter Results & Announces Dividend Increase

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This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release. All amounts are in Canadian dollars.

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TORONTO — Dream Unlimited Corp. (TSX: DRM) (“Dream”, “the Company” or “we”) today announced its financial results for the three and twelve months ended December 31, 2024 (“fourth quarter”).

“On many fronts, 2024 was a positive and significant year for our business with our core operating divisions performing very well,” said Michael Cooper, Chief Responsible Officer. “Western Canada land produced its highest level of profit since going public in 2013 and is on track for another successful year. We continue to see steady expansion across our asset management platform, whether through institutional partnerships or expansion of our existing mandates, and the trajectory of growth for our income properties is at a point where it can achieve real scale. The office and GTA development markets continue to be challenged, however, we have accomplished all our key objectives we set out for in 2024. With the increasing chaos across our political and economic environment, our focus on managing liquidity is proving to be increasingly valuable so we can weather unexpected disruptions that may arise, and we are comfortable with our overall position from the diversity of our asset profile.”

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Dream has published a supplemental information package on our website concurrent with the release of our fourth quarter results.

Highlights: Recurring Income (comprised of Income & Recreational Properties and Asset Management)

  • On November 19, 2024, we closed on the sale of Arapahoe Basin to Alterra Mountain Company. The sale generated a pre-tax gain of $157.4 million after closing costs and adjustments. Proceeds were used to repay certain debt facilities and fund a special shareholder dividend paid in December.
  • In the fourth quarter our asset management business generated revenue and net margin of $18.2 million and $11.3 million, compared to $23.8 million and $16.8 million in 2023. The decrease from 2023 is primarily driven by the magnitude of development fees recognized in the prior year, which will fluctuate as certain construction milestones are met. This was partially offset by growth in base fees, as fee earning assets under management(1) increased by over $2 billion since 2023. As previously disclosed, we anticipate continuing growth in this division as we closed on a $1 billion portfolio of multi-family rentals located in the Netherlands in December and announced a $2 billion joint venture focused on Canadian apartments in January.
  • Our income properties division generated revenue and net operating income of $17.9 million and $5.8 million in the fourth quarter, compared to $14.1 million and $5.7 million in the comparative period (excluding results from Arapahoe Basin). The increase in revenue was driven by the stabilization of three properties in Western Canada at the end of 2023, in addition to the opening of the Postmark Hotel in mid-2024. Net operating income was consistent year over year, as we incurred $0.4 million in losses associated with the hotel pre-stabilization ($1.0 million year-to-date). Towards the end of the fourth quarter, we acquired our partner’s interest in our portfolio of hotels, comprised of the Broadview Hotel, Gladstone Hotel and Postmark Hotel for a net purchase price of $11.1 million, resulting in us owning 100% of the portfolio. Occupancy rates at our stabilized hotels was 79% in the fourth quarter.
  • The Distillery District is our 395,000 square foot (“sf”) income property in the east end of downtown Toronto and we hold a 62.5% ownership interest. Subsequent to year end, one of our major tenants extended their current lease of 53,000 sf and upsized for a further 20,000 sf. The deal carries a term of 18 years, strong covenant and was completed at attractive market rents.

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  • On a year-to-date basis, our recurring income businesses generated revenue and net operating income(1) of $176.9 million and $79.5 million, respectively, up by $7.7 million and $13.0 million from 2023 on a standalone basis. The increase was driven by carried interest realized on the U.S. Industrial Fund, higher occupancy and base rent at the Distillery District and improved yields at Arapahoe Basin up to August 31, 2024. This was partially offset by less development activity across our asset management platform.
  • Across the Dream group platform, which includes assets held through the Company, Dream Impact Trust, Dream Impact Fund and Dream Residential REIT, we have a growing portfolio of nearly 8,000 stabilized apartment units, 1,344 units in lease up and over 1,980 units under construction, compared to only 48 units in 2017 when we committed to our residential rental strategy. Our Canadian stabilized residential rentals maintained strong occupancy of 97% as of quarter-end and we expect to add over 2,600 residential rental units to our portfolio through 2027 (at 100% project level), nearly all of which are under construction today.

Highlights: Development (comprised of development activity in the GTA, National Capital Region and Western Canada)

  • In the fourth quarter our development segment generated $151.2 million in revenue and $42.6 million in net margin on a standalone basis, up from $53.8 million and $4.4 million in 2023 largely due to the timing of lot sales and an increase in acre sales. On a year-to-date basis, revenue and net margin were up $155.4 million and $59.2 million, respectively. The increase is primarily attributable to 622 lots and 236 acre sales in 2024, which includes 146 acres of land sold in Edmonton in the first half of 2024, and condominium occupancies at Brightwater. Revenue and net margins were partially offset by lower condominium occupancies at Phase 2 of Riverside Square in comparison to 2023 and minimal margin recognized on IVY Condos.
  • In the fourth quarter of 2024, we achieved 399 lot sales and 72 acres sales primarily across our Eastbrook and Holmwood communities in Regina and Saskatoon. As of February 24, 2025 we have $104 million in land commitments for sales in 2025.
  • On December 17, 2024, the City of Toronto announced the waiver of development charges on selected projects to support the advancement of purpose-built rentals across the city. Both Phase 1 at Quayside and 49 Ontario were named as part of this development charge waiver for a combined 2,500 units (at 100% project level). The savings achieved from this waiver directly improves the project viability and better positions construction start for these developments to be accelerated. We continue to make progress on innovative financing solutions for both of these projects.

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  • Our Brighton community in Saskatoon is growing rapidly, with the completion of The Teal and a portion of Blocks 166 and JK in the fourth quarter, adding 144 units to our recurring income portfolio. The recently completed developments are 93% leased as of February 24, 2025. We expect to continue or commence construction on 500 units within Brighton and our first 168-unit purpose-built rental in Alpine Park in Calgary in 2025.
  • We have finalized a purchase and sale agreement for 13 acres to the City of Saskatoon for a high school in our Holmwood community, subject to city council approval at the end of March. We believe this will accelerate builder, residential rental and retail interest in our unsold lands in the community over the coming years and be an integral part of the master-planned community.

Consolidated Results Overview

A summary of our consolidated results for the year ended December 31, 2024 is included in the table below.

For the three months ended
December 31,

For the year ended
December 31,

(in thousands of dollars, except number of shares and per share amounts)

2024

2023

2024

2023

Revenue

$

192,259

$

107,858

$

624,506

$

386,947

Net margin

$

63,102

$

26,380

$

158,213

$

85,870

Net margin (%)(1)

32.8%

24.5%

25.3%

22.2%

Earnings (loss) before income taxes

$

170,731

$

(77,557)

$

225,373

$

(119,790)

Dream standalone FFO per share(1)

$

1.22

$

0.56

$

2.86

$

1.37

Dream consolidated FFO per share(1)

$

1.44

$

0.43

$

2.63

$

0.91

Adjusted Dream standalone FFO per share(1)

$

4.97

$

0.56

$

6.60

$

1.37

December 31, 2024

December 31, 2023

Total assets

$

3,921,052

$

3,875,522

Total liabilities

$

2,419,523

$

2,471,463

Total equity

$

1,501,529

$

1,404,059

Total issued and outstanding shares

42,056,218

42,240,010

  • Earnings before income taxes for the fourth quarter was $170.7 million, an increase of $248.3 million from the comparative period. The increase was primarily attributable to the $157.4 million gain on sale of Arapahoe Basin, the timing of lot sales and higher acre sales in Western Canada in the fourth quarter of 2024, and losses attributable to an accounting write-down taken on Dream Office REIT units in 2023 with lower comparable losses taken in 2024.
  • Earnings before income taxes for the year ended December 31, 2024 was $225.4 million, an increase of $345.2 million from the comparative period. The comparative period included accounting losses on the sale of 7.0 million Dream Office REIT units with no similar dispositions in the current period. The increase is also attributable to the aforementioned sale of Arapahoe Basin and increased lot and acre sales, including 146 acres sold in Edmonton in the first half of 2024 with no comparable activity in 2023. In addition, lower fair value losses were recognized on both our commercial retail and multi-family residential rental properties in the Greater Toronto Area and Western Canada. Higher pre-tax earnings were partially offset by lower fair value gains on the liability for Dream Impact Trust.

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  • Dream standalone funds from operations(1) (“FFO”) for the three months ended December 31, 2024 was $1.22 per share, on a pre-tax basis, up from $0.56 per share in the comparative period for the aforementioned reasons. Dream standalone FFO(1) for the year ended December 31, 2024 was $2.86 per share, on a pre-tax basis, up from $1.37 per share in the comparative period. The increase is primarily attributable to the aforementioned factors and includes parcel sales in Edmonton, carried interest earned related to the Dream US Industrial Fund and stronger results at Arapahoe Basin up to August 31, 2024. Including the gain on sale of Arapahoe Basin, adjusted Dream standalone FFO was up $4.41 and $5.23 per share on a quarter and year-to-date basis.
  • As of December 31, 2024, we had available liquidity(1) of $366.9 million, up from $256.6 million of September 30, 2024 and we returned $67.3 million to Dream shareholders over 2024. Maintaining strong liquidity remains a top priority with fast changing economic conditions and allows us to be well positioned for new investments as they arise. We expect to finalize the refinancing of our $225 million term facility and $320 million Western Canada operating line by the end of the first quarter of 2025, extending the maturity to 2028.
  • Subsequent to the fourth quarter, the Company’s Board of Directors approved an increase to the annual dividend per Class A Subordinate Voting Share and Class B Common Share from $0.60 per share to $0.65 per share ($0.1625 quarterly), effective with the dividend payable on March 31, 2025 to shareholders of record on March 14, 2025.

Conference Call

Senior management will host a conference call to discuss the financial results on Wednesday, February 26, 2025, at 10:00 AM (ET). To access the conference call, please dial 1-844-763-8274 (toll free) or 647-484-8814 (toll). To access the conference call via webcast, please go to Dream’s website at www.dream.ca and click on the link for News, then click on Events. A taped replay of the conference call and the webcast will be available for ninety (90) days following the call.

Other Information

Information appearing in this press release is a select summary of results. The financial statements and MD&A for the fourth quarter of 2024 for the Company are available at www.dream.ca and on www.sedarplus.com.

About Dream Unlimited Corp.

Dream has an established and successful asset management business, inclusive of $27 billion of assets under management(1) as at December 31, 2024 across four Toronto Stock Exchange (“TSX”) listed trusts, our private asset management business and numerous partnerships. We are a leading developer of exceptional real estate assets across Canada and Europe, including income properties that will be held for the long term as they are completed. We also develop land for sale in Western Canada. Dream has a proven track record for being innovative and for our ability to source, structure and execute on compelling investment opportunities. A comprehensive overview of our holdings is included in the “Summary of Dream’s Assets and Holdings” section of our MD&A for the fourth quarter of 2024.

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Non-GAAP Measures and Other Disclosures

In addition to using financial measures determined in accordance with International Financial Reporting Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”), we believe that important measures of operating performance include certain financial measures that are not defined under IFRS Accounting Standards. Throughout this press release, there are references to certain non-GAAP financial measures and ratios and supplementary financial measures, including Dream standalone FFO per share, Dream consolidated FFO per share, Dream standalone FFO, Dream consolidated FFO, Dream Impact Trust and consolidation and fair value adjustments, available liquidity, net operating income, standalone figures by division, fee earning assets under management and portfolio of stabilized properties, which management believes are relevant in assessing the economics of the business of Dream. These performance and other measures are not financial measures under IFRS Accounting Standards, and may not be comparable to similar measures disclosed by other issuers. However, we believe that they are informative and provide further insight as supplementary measures of financial performance, financial position or cash flow, or our objectives and policies, as applicable. Certain additional disclosures such as the composition, usefulness and changes, as applicable, of the non-GAAP financial measures and ratios included in this press release have been incorporated by reference from the management’s discussion and analysis of Dream for the year ended December 31, 2024, dated February 25, 2025 (the “MD&A for the fourth quarter of 2024”) and can be found under the section “Non-GAAP Ratios and Financial Measures”, subheadings “Dream standalone FFO” and “Dream consolidated FFO”, “Dream standalone FFO per share” and “Dream consolidated FFO per share”, “Net operating income” and “Dream Impact Trust and consolidation and fair value adjustments”. The composition of supplementary financial measures included in this press release has been incorporated by reference from the MD&A for the fourth quarter of 2024 and can be found under the section “Supplementary and Other Financial Measures”. The MD&A for the fourth quarter of 2024 is available on SEDAR+ at www.sedarplus.com under Dream’s profile and on Dream’s website at www.dream.ca under the Investors section.

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Non-GAAP Ratios and Financial Measures

Dream Impact Trust and consolidation and fair value adjustments” represent certain IFRS Accounting Standards adjustments required to reconcile Dream standalone and Dream Impact Trust results to the consolidated results as at December 31, 2024 and December 31, 2023 and for the year ended December 31, 2024 and December 31, 2023. Management believes Dream Impact Trust and consolidation and fair value adjustments provides investors useful information in order to reconcile it to the Dream Impact Trust financial statements.

Consolidation and fair value adjustments relate to business combination adjustments on acquisition of Dream Impact Trust on January 1, 2018 and related amortization, elimination of intercompany balances including the investment in Dream Impact Trust units, adjustments for co-owned projects, fair value adjustments to the Dream Impact Trust units held by other unitholders, and deferred income taxes.

“Dream standalone FFO”, “Adjusted Dream standalone FFO”, “Dream consolidated FFO” and “Adjusted Dream consolidated FFO”, are non-GAAP financial measures and are key measures of our financial performance. We use Dream standalone FFO and Dream consolidated FFO to assess operating results and the pre-tax performance of our businesses on a divisional basis.

Dream standalone FFO is calculated as the sum of FFO for all of our divisions, excluding Dream Impact Trust and consolidation adjustments, and Dream consolidated FFO is calculated as Dream standalone FFO plus Dream Impact Trust and consolidation adjustments. Adjusted Dream standalone FFO and Adjusted Dream consolidated FFO include the gain on sale of Arapahoe Basin. We use Dream standalone FFO and Dream consolidated FFO, to assess operating results and the performance of our businesses on a divisional basis. The most directly comparable measure to Dream standalone FFO and Dream consolidated FFO is net income.

The following table defines and illustrates how Dream standalone FFO is calculated by division:

(in thousands of dollars, unless otherwise noted)

For the three months ended
December 31,

For the year ended
December 31,

FFO by division:

2024

2023

2024

2023

Asset management(i)

$

9,451

$

15,459

$

38,337

$

39,047

Dream group unit holdings(ii)

5,108

6,248

21,191

26,145

Stabilized assets – GTA/Ottawa

1,164

2,706

2,712

2,628

Stabilized assets – Western Canada

(546)

4

2,198

3,258

Arapahoe Basin

(2,258)

15,792

7,284

Development – GTA/Ottawa

3,826

6,620

3,642

3,049

Development – Western Canada

39,876

3,945

73,551

15,664

Corporate & other

(7,393)

(8,871)

(37,171)

(38,678)

Dream standalone FFO

$

51,486

$

23,853

$

120,252

$

58,397

Dream Impact Trust and consolidation adjustments(iii) & fair value adjustments

9,236

(5,507)

(9,695)

(19,370)

Dream consolidated FFO

$

60,722

$

18,346

$

110,557

$

39,027

Add: Gain on disposition of Arapahoe Basin

$

157,362

$

$

157,362

$

Adjusted Dream standalone FFO

$

208,848

$

23,853

$

277,614

$

58,397

Adjusted Dream consolidated FFO

$

218,084

$

18,346

$

267,919

$

39,027

Shares outstanding, weighted average

42,034,893

42,437,858

42,088,662

42,759,942

Dream standalone FFO per share

$

1.22

$

0.56

$

2.86

$

1.37

Dream consolidated FFO per share

$

1.44

$

0.43

$

2.63

$

0.91

Adjusted Dream standalone FFO per share

$

4.97

$

0.56

$

6.60

$

1.37

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(i)

Asset management includes our asset and development management contracts with the Dream group of companies and management fees from our private asset management business, along with associated costs. Included in asset management for the three and twelve months ended December 31, 2024 are asset management fees from Dream Impact Trust received in the form of units of $444 and $1,685, respectively (three and twelve months ended December 31, 2023 – $472 and $3,454, respectively). These fees have been received in the form of units since April 1, 2019. Had the asset management fees been paid in cash, rather than in units, the fees earned for the three and twelve months ended December 31, 2024 would have been $3,761 and $15,243, respectively (three and twelve months ended December 31, 2023 – $3,618 and $13,980).

(ii)

Dream group unit holdings includes our proportionate share of funds from operations from our 31.3% effective interest in Dream Office REIT and 11.9% effective interest in Dream Residential REIT, along with distributions from our 36.8% interest in Dream Impact Trust. Included in Dream group unit holdings for the three and twelve months ended December 31, 2024 are distributions from Dream Impact Trust received in the form of units of $nil and $653, respectively (three and twelve months ended December 31, 2023 – $947 and $4,386, respectively).

(iii)

Included within consolidation adjustments in the three and twelve months ended December 31, 2024 are losses of $664 and income of $4,294, respectively, attributable to non-controlling interest (three and twelve months ended December 31, 2023 – $116 and $495, respectively, in losses).

The following table reconciles Dream consolidated FFO to net income (loss):

(in thousands of dollars, unless otherwise noted)

For the three months ended
December 31,

For the year ended
December 31,

2024

2023

2024

2023

Dream consolidated net income (loss)

$

129,088

$

(81,352)

$

187,858

$

(117,079)

Financial statement components not included in FFO:

Fair value changes in investment properties

9,308

29,450

24,398

57,279

Fair value changes in financial instruments

(3,688)

1,138

(1,950)

691

Gain on sale of Arapahoe Basin

(157,362)

(157,362)

Share of loss from Dream Office REIT and Dream Residential REIT

36,254

74,824

28,044

183,098

Fair value changes in equity accounted investments

2,297

(6,090)

4,861

(8,261)

Adjustments related to Dream Impact Trust units

(3,691)

(16,312)

(26,891)

(107,427)

Adjustments related to Impact Fund units

939

5,925

(9,828)

3,561

Depreciation and amortization

826

2,034

3,374

8,117

Income tax (recovery) expense

41,643

3,795

37,515

(2,711)

Share of Dream Office REIT FFO

4,414

4,424

18,172

19,568

Share of Dream Residential REIT FFO

694

510

2,366

2,191

Dream consolidated FFO

$

60,722

$

18,346

$

110,557

$

39,027

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“Dream standalone FFO per share”, “Adjusted Dream standalone FFO per share” and “Dream consolidated FFO per share” are non-GAAP ratios. Dream standalone FFO per share is calculated as Dream standalone FFO divided by the weighted average number of Dream shares outstanding. Adjusted Dream standalone FFO per share is calculated as Adjusted Dream standalone FFO divided by the weighted average number of Dream shares outstanding. Dream consolidated FFO per share is calculated as Dream consolidated FFO divided by weighted average number of Dream shares outstanding. We use these ratios to assess operating results and the pre-tax performance of our businesses on a per share basis.

Dream standalone FFO per share and Dream consolidated FFO per share for the year ended December 31, 2024 and 2023 are shown in the table included under the “Funds From Operations” section of the MD&A for the fourth quarter of 2024. Adjusted Dream standalone FFO per share is reconciled above.

Net operating income” is a non-GAAP measure and represents revenue, less (i) direct operating costs and (ii) selling, marketing, depreciation and other indirect costs, but including: (iii) depreciation; and (iv) general and administrative expenses. The most directly comparable financial measure to net operating revenue is net margin. This non-GAAP measure is an important measure used by management to assess the profitability of the Company’s recurring income segment. Net operating income for the recurring income segment for the year ended December 31, 2024 and 2023 is calculated and reconciled to net margin as follows:

For the three months ended
December 31,

For the year ended
December 31,

2024

2023

2024

2023

Net margin

$

20,335

$

23,299

$

93,995

$

75,732

Add: Depreciation

491

1,361

2,107

5,895

Add: General and administrative expenses

742

968

2,058

3,175

Net operating income

$

21,568

$

25,628

$

98,160

$

84,802

“Standalone Figures by Division” is a non-GAAP measure and represents the results of Dream, excluding the impact of Dream Impact Trust’s consolidated results and IFRS Accounting Standards adjustments to reflect Dream’s direct ownership of our partnerships. Direct ownership refers to Dream Unlimited Corp.’s interest in subsidiaries and partnerships and excludes any non-controlling interest in the noted entities based on units held as of the end of the reporting period. The most direct comparable financial measure to Dream standalone is consolidated Dream. This non-GAAP measure is an important measure used by the Company to evaluate earnings against historical periods, including results prior to the acquisition of control of Dream Impact Trust.

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For the three months ended December 31, 2024

Asset
Management

Income
Properties(i)

Urban
Development

Western
Canada
Development

Corporate

Total
Standalone

Add: Dream
Impact Trust
and IFRS
adjustments

Consolidated
Dream

Revenue

$

18,177

$

17,873

$

12,243

$

138,934

$

$

187,227

$

5,032

$

192,259

Direct operating costs

(6,866)

(12,032)

(6,751)

(92,200)

(117,849)

(971)

(118,820)

Gross margin

11,311

5,841

5,492

46,734

69,378

4,061

73,439

Selling, marketing, depreciation and other operating costs

(876)

(2,630)

(6,965)

(10,471)

134

(10,337)

Net margin

11,311

4,965

2,862

39,769

58,907

4,195

63,102

Fair value changes in investment properties

2,290

(9,546)

4,710

(2,546)

(6,762)

(9,308)

Investment and other income

(274)

260

2,400

2,140

4,455

8,981

428

9,409

Interest expense

(900)

(4,699)

(1,163)

(2,601)

(4,364)

(13,727)

(7,859)

(21,586)

Gain on disposition of Arapahoe Basin

157,362

157,362

157,362

Share of earnings from equity accounted investments

(36,900)

(36,900)

9,601

(27,299)

Net segment earnings (loss)

(26,763)

160,178

(5,447)

44,018

91

172,077

(397)

171,680

General and administrative expenses

(3,888)

(3,888)

187

(3,701)

Adjustments related to Dream Impact Trust units

3,691

3,691

Adjustments related to Dream Impact Fund units

(939)

(939)

Income tax (expense) recovery

(44,570)

(44,570)

2,927

(41,643)

Net earnings (loss)

$

(26,763)

$

160,178

$

(5,447)

$

44,018

$

(48,367)

$

123,619

$

5,469

$

129,088

(i) Income properties includes results attributable to Arapahoe Basin for the period.

For the three months ended December 31, 2023

Asset
Management

Income
Properties(i)

Urban
Development

Western
Canada
Development

Corporate

Total
Standalone

Add: Dream
Impact Trust
and IFRS
adjustments

Consolidated
Dream

Revenue

$

23,800

$

20,830

$

20,539

$

33,304

$

$

98,473

$

9,385

$

107,858

Direct operating costs

(7,036)

(17,298)

(18,469)

(23,261)

(66,064)

(5,250)

(71,314)

Gross margin

16,764

3,532

2,070

10,043

32,409

4,135

36,544

Selling, marketing, depreciation and other operating costs

(2,680)

(2,515)

(5,228)

(10,423)

259

(10,164)

Net margin

16,764

852

(445)

4,815

21,986

4,394

26,380

Fair value changes in investment properties

1,734

(6,820)

2,296

(2,790)

(26,660)

(29,450)

Investment and other income

(261)

711

6,152

655

(607)

6,650

439

7,089

Interest expense

(12)

(4,027)

1,304

(1,577)

(3,067)

(7,379)

(7,541)

(14,920)

Share of earnings from equity accounted investments(ii)

(7,270)

46

(72,935)

(80,159)

13,364

(66,795)

Net segment earnings (loss)

9,221

(684)

191

6,189

(76,609)

(61,692)

(16,004)

(77,696)

General and administrative expenses

(9,972)

(9,972)

(276)

(10,248)

Adjustments related to Dream Impact Trust units

16,312

16,312

Adjustments related to Dream Impact Fund units

(5,925)

(5,925)

Income tax (expense) recovery

2,747

2,747

(6,542)

(3,795)

Net earnings (loss)

$

9,221

$

(684)

$

191

$

6,189

$

(83,834)

$

(68,917)

$

(12,435)

$

(81,352)

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(i)

Income properties includes results attributable to Arapahoe Basin for the period.

(ii)

The loss in share of earnings from equity accounted investments within Corporate relates to an impairment loss of $72,935 from Dream Office REIT.

For the year ended December 31, 2024

Asset
Management

Income
Properties(i)

Urban
Development

Western
Canada
Development

Corporate

Total
Standalone

Add: Dream
Impact Trust
and IFRS
adjustments

Consolidated
Dream

Revenue

$

74,929

$

101,952

$

74,979

$

263,414

$

$

515,274

$

109,232

$

624,506

Direct operating costs

(33,635)

(63,718)

(64,919)

(163,922)

(326,194)

(96,655)

(422,849)

Gross margin

41,294

38,234

10,060

99,492

189,080

12,577

201,657

Selling, marketing, depreciation and other operating costs

(3,813)

(11,361)

(24,113)

(39,287)

(4,157)

(43,444)

Net margin

41,294

34,421

(1,301)

75,379

149,793

8,420

158,213

Fair value changes in investment properties

104

(8,312)

12,101

3,893

(28,291)

(24,398)

Investment and other income

(1,272)

1,841

8,249

4,137

2,718

15,673

2,243

17,916

Interest expense

(917)

(17,695)

(3,487)

(6,459)

(17,516)

(46,074)

(32,318)

(78,392)

Gain on disposition of Arapahoe Basin

157,362

157,362

157,362

Share of earnings from equity accounted investments

(32,034)

(32,034)

12,903

(19,131)

Net segment earnings (loss)

7,071

176,033

(4,851)

85,158

(14,798)

248,613

(37,043)

211,570

General and administrative expenses

(20,739)

(20,739)

(2,177)

(22,916)

Adjustments related to Dream Impact Trust units

26,891

26,891

Adjustments related to Dream Impact Fund units

9,828

9,828

Income tax (expense) recovery

(48,684)

(48,684)

11,169

(37,515)

Net earnings (loss)

$

7,071

$

176,033

$

(4,851)

$

85,158

$

(84,221)

$

179,190

$

8,668

$

187,858

(i) Income properties includes results attributable to Arapahoe Basin for the period.

For the year ended December 31, 2023

Asset
Management

Income
Properties(i)

Urban
Development

Western
Canada
Development

Corporate

Total
Standalone

Add: Dream
Impact Trust
and IFRS
adjustments

Consolidated
Dream

Revenue

$

71,124

$

98,047

$

47,895

$

135,051

$

$

352,117

$

34,830

$

386,947

Direct operating costs

(32,599)

(70,089)

(44,492)

(94,092)

(241,272)

(20,480)

(261,752)

Gross margin

38,525

27,958

3,403

40,959

110,845

14,350

125,195

Selling, marketing, depreciation and other operating costs

(8,588)

(8,580)

(20,868)

(38,036)

(1,289)

(39,325)

Net margin

38,525

19,370

(5,177)

20,091

72,809

13,061

85,870

Fair value changes in investment properties

(578)

(5,984)

2,068

(4,494)

(52,785)

(57,279)

Investment and other income

(1,111)

646

9,979

2,568

(16)

12,066

449

12,515

Interest expense

(23)

(13,405)

(2,247)

(7,803)

(12,595)

(36,073)

(32,228)

(68,301)

Share of earnings from equity accounted investments(ii)

(23,180)

46

(161,139)

(184,273)

18,967

(165,306)

Net segment earnings (loss)

14,211

6,079

(3,429)

16,924

(173,750)

(139,965)

(52,536)

(192,501)

General and administrative expenses

(29,929)

(29,929)

(1,226)

(31,155)

Adjustments related to Dream Impact Trust units

107,427

107,427

Adjustments related to Dream Impact Fund units

(3,561)

(3,561)

Income tax (expense) recovery

8,788

8,788

(6,077)

2,711

Net earnings (loss)

$

14,211

$

6,079

$

(3,429)

$

16,924

$

(194,891)

$

(161,106)

$

44,027

$

(117,079)

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(i)

Income properties includes results attributable to Arapahoe Basin for the period.

(ii)

The loss in share of earnings from equity accounted investments within Corporate relates to $88,204 in accounting losses taken on the sale of Dream Office REIT units and an impairment loss of $72,935 from Dream Office REIT.

Forward-Looking Information

This press release may contain forward-looking information within the meaning of applicable securities legislation, including, but not limited to, statements regarding our objectives and strategies to achieve those objectives; our beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, future growth, expected net proceeds from sales or transactions, results of operations, performance, business prospects and opportunities, acquisitions or divestitures, tenant base, future maintenance and development plans and costs, capital investments, financing, the availability of financing sources, income taxes, vacancy and leasing assumptions, litigation and the real estate industry in general; as well as specific statements in respect of our expectations regarding our ability to pursue opportunities to grow; our expectations regarding the performance of Western Canada division; our ability to grow our income property division and achieve scale; our ability to maintain strong liquidity and our expectation that we will be able to weather unexpected disruptions and be well positioned for new investments as they arise; our ability to achieve leasing and construction targets; our expectations regarding our asset management division, including expected growth; our development plans, including sizes, uses, density, number of units, amenities and timing thereof; our expectation that we will add over 2,600 residential rental units to our portfolio through 2027; expectations regarding the sale of assets and land; our ability to consummate land commitments, and use of proceeds and timing thereof and the impacts of any sales on interest in our communities; our occupancy targets; our ability to achieve financing solutions for Quayside and 49 Ontario and impacts of such financing on construction timing; the growth of our Brighton community and our expectations regarding construction timing; our expectations and ability to finalize the refinancing of our indebtedness including our $225 million term facility and $320 million Western Canada operating line, including timing and extension terms; our expectations about our liquidity in future periods. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These assumptions include, but are not limited to: the nature of development lands held and the development potential of such lands, interest rates and inflation remaining in line with management expectations, our ability to bring new developments to market, anticipated positive general economic and business conditions, including low unemployment and interest rates, that duties, tariffs and other trade restrictions, if any, will not materially impact our business, positive net migration, oil and gas commodity prices, our business strategy, including geographic focus, anticipated sales volumes, performance of our underlying business segments and conditions in the Western Canada land and housing markets. Risks and uncertainties include, but are not limited to, general and local economic and business conditions, the impact of public health crises and epidemics, employment levels, risks associated with unexpected or ongoing geopolitical events, including disputes between nations, terrorism or other acts of violence, international sanctions and the disruption of movement of goods and services across jurisdictions, inflation or stagflation, regulatory risks, mortgage and interest rates and regulations, risks related to a potential economic slowdown in certain of the jurisdictions in which we operate and the effect inflation and any such economic slowdown may have on market conditions and lease rates, risks related to the imposition of duties, tariffs and other trade restrictions and their impacts, environmental risks, consumer confidence, seasonality, adverse weather conditions, reliance on key clients and personnel and competition. All forward-looking information in this press release speaks as of February 25, 2025. Dream does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on SEDAR+ ( www.sedarplus.com).

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Endnotes:

(1)

Dream standalone FFO per share, Adjusted Dream standalone FFO per share, and Dream consolidated FFO per share are non-GAAP ratios. Dream Impact Trust and consolidation and fair value adjustments, Dream standalone FFO, Adjusted Dream standalone FFO, Dream consolidated FFO, portfolio of stabilized properties and net operating income are non-GAAP financial measures. Such measures are not standardized financial measures under IFRS Accounting Standards and might not be comparable to similar financial measures disclosed by other issuers. The most directly comparable financial measures to Dream Impact Trust and consolidation and fair value adjustments, Dream standalone FFO and Dream consolidated FFO is net income. The most directly comparable financial measures to portfolio of stabilized properties and net operating income is net margin. Assets under management, fee earning assets under management, net margin (%), and available liquidity are supplementary financial measures. Refer to the “Non-GAAP Measures and Other Disclosures” section of this press release for further details.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250225250414/en/

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Contacts

Dream Unlimited Corp.
Meaghan Peloso
Chief Financial Officer
(416) 365-6322
mpeloso@dream.ca

Kim Lefever
Director, Investor Relations
(416) 365-6339
klefever@dream.ca

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Baytex Conference Call And Webcast On Fourth Quarter And Full Year 2024 Results To Be Held On March 5, 2025

(MENAFN– Newsfile Corp)
Calgary, Alberta–(Newsfile Corp. – February 25, 2025) – Baytex energy Corp. (TSX: BTE) (NYSE: BTE) will release its fourth quarter and full year 2024 financial and operating results after the close of markets on Tuesday March 4, 2025. A conference call and webcast will be held on Wednesday March 5, 2025 to discuss the results:
Date: Wednesday March 5, 2025
Time: 9:00 a.m. MST (11:00 a.m. EST)
Registration: For Express Access and Calendar booking, visit our website to register at:
Dial-in: If you prefer to speak with an operator, dial:
1-647-484-8814 (International)
1-844-763-8274 (North America Toll-Free)
Webcast Link:

An archived recording of the conference call will be available shortly after the event by accessing the webcast link above. The conference call will also be archived on the Baytex website at .

Baytex Energy Corp. is an energy company with headquarters based in Calgary, Alberta and offices in Houston, Texas. The company is engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. Baytex’s common shares trade on the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE.

For further information about Baytex, please visit our website at or contact:

Brian Ector, Senior Vice President, Capital Markets and Investor Relations

Toll Free Number: 1-800-524-5521
Email: …



To view the source version of this press release, please visit

SOURCE: Baytex Energy Corp.

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Versatile’s Buhler being delisted

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Buhler Industries, best known for making the large Versatile tractors, is being taken off the Toronto Stock Exchange by the Turkish family that has accumulated almost all of the shares.

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Buhler Industries was established in 1969 when John Buhler purchased the Standard Gas Engine Works. The company produced the Farm King line of grain augers, snowblowers, mowers and small implements.

It bought Versatile in 2000 when Case-New Holland needed to divest it to win federal government approval for the merger with New Holland.

It operates eight manufacturing plants throughout North America.

The purchaser, ASKO, is wholly owned by the Konukoğlu family. ASKO owns the firm Basak Traktor, which purchased 80 per cent of Buhler Industries from Russian combine manufacturer Rostselmach.

Rostselmach’s owner was hit by Canadian sanctions after Russia invaded Ukraine and for a time Buhler was run by its Canadian management team.

Currently ASKO owns 96.7 per cent of the firm’s shares.

Following the completion of the amalgamation, the shares will be de-listed from the Toronto Stock Exchange and the company will apply to cease to be a reporting issuer under applicable Canadian securities laws.

ASKO owns firms worldwide that manufacture construction equipment, energy and technology equipment, and agricultural equipment including tractors. As well as building and marketing its own equipment, it also manufactures tractors for the German firm CLAAS.

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Equinox Gold, Calibre Mining to merge, creating Americas-focused diversified gold producer

Canadian miner Equinox Gold has entered a definitive arrangement agreement with Calibre Mining for an at-market business combination, with Equinox acquiring all issued and outstanding common shares of Calibre.

The resulting entity, New Equinox Gold, will be an Americas-focused diversified gold producer with an estimated market capitalisation of C$7.7bn.

The combined company’s operations will span five countries, including two Canadian gold mines, Greenstone and Valentine.

Post-transaction, Equinox and Calibre shareholders will own approximately 65% and 35% of New Equinox Gold, respectively.

Calibre shareholders will receive 0.31 Equinox common shares for each Calibre share held.

The merger brings together a vast reserve of mineral resources and a “highly prospective” pipeline of development, expansion and exploration projects for sustainable growth.

New Equinox Gold is projected to produce around 950,000oz of gold in 2025, excluding contributions from the Valentine or Los Filos mines.

With the Greenstone and Valentine mines at full capacity, the combined company could exceed 1.2 million ounces (moz) of gold annually.

Calibre president and CEO Darren Hall said: “The merger with Equinox provides combined shareholders a diversified gold production base with significant growth opportunities.

“The combination of two new, long-life, low-cost, open-pit gold mines, Valentine and Greenstone, will be the cornerstone of an exciting new major Canadian gold producer that will be positioned to generate substantial shareholder value. I look forward to working with the combined team to continue Calibre’s track record of superior execution and delivering on our commitments.”

The transaction requires approval from Calibre’s shareholders, with a special meeting anticipated before 31 May 2025.

It also needs regulatory approvals, including Canadian and Mexican competition authorisations and the listing of new Equinox shares on the Toronto Stock Exchange (TSX) and New York Stock Exchange-A.

Subject to conditions being met, the merger is expected to close in the second quarter of 2025.

Shareholders of both companies stand to gain from the merger, with enhanced production, cash flow and exposure to growth opportunities.

Simultaneously, Calibre has entered into subscription agreements to issue $75m in unsecured convertible notes to Equinox, Vestcor and Trinity Capital Partners.

These notes will have a 5.5% annual interest rate and a five-year maturity, and are convertible into Calibre common shares at C$4.25 per share, a 37.5% premium to the stock’s 21 February 2025 closing price.

The funds raised will cover transaction expenses and general corporate purposes.

The private placement is expected to close by 4 March 2025, pending TSX approval.


TFI Reverses Course on Relocation, Will Remain in Canada

TFI International is going back on its decision to re-domicile into the U.S., instead opting to remain in Canada based on shareholder feedback.

While the trucking company did not go further beyond acknowledging the feedback in its statement, one minority shareholder had openly expressed dissatisfaction with the U.S. relocation.

Pension fund Caisse de Depot et Placement du Quebec (CDPQ), which owned a 4 percent stake in TFI as of Dec. 31, was frustrated that the company did not inform its brass before making the decision.

That fund has a mandate to try to boost the economic development of Quebec, and as such has fought to stop efforts from businesses to leave the province.

Ironically, one of the initial reasons CEO Alain Bedard cited for the move was to “better align with our shareholder base.” The plurality of TFI’s shareholders is U.S.-based, the company said in a statement. According to Bedard in Wednesday’s earnings call, 49.9 percent of shareholders were based in the U.S. as of last summer, outpacing the 45 percent that were Canadian.

Currently, TFI International Inc. is publicly traded in both the U.S. and Canada, on the New York Stock Exchange and the Toronto Stock Exchange. Bedard said the company can stay on both exchanges as long as U.S. shareholders don’t surpass 50 percent.

Shareholders aside, a move to the U.S. would have put the trucker more in line with its client base. Roughly 70 percent of the Montreal-based company’s business is domestic trucking in the U.S., while 25 percent remains in Canada.

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Additionally, re-domiciling would have been beneficial for TFI’s flatbed trucking segment, Daseke. Daseke partners with the U.S. Department of Defense, which “creates a little bit of issues” for TFI as a foreign parent owner.

But in the end, the decision was always going to come down to shareholder approval, which would have been required for the relocation to occur.

The initial decision, and its quick reversal, come amid the highest tensions between Canada and the U.S. in recent memory, along with a freight recession has suppressed trucking demand since mid-2022.

On Monday, President Donald Trump said his tariffs on both Canada and Mexico are “on time” and “on schedule.” The Trump administration is slapping 25-percent duties on most Canadian imports, with energy products such as oil and electricity being tariffed at 10 percent.

The tariffs are set to go into effect March 4, after a month-long deferral, as the countries negotiate on other issues including border security.

Although only roughly 4 percent business encompasses cross-border trade at TFI, the trucking company couldn’t issue guidance due to the potential tariff impacts.

TFI’s fourth quarter was a “disaster,” Bedard said in the earnings call. While revenue increased 5.5 percent to $2.08 billion, it came in well below estimates and was buoyed by the Daseke acquisition early in 2024. Less-than-truckload (LTL), TFI’s largest segment, saw revenue decline 9.8 percent to $737.3 million when not accounting for fuel surcharges.

Net income came in at $88.1 million, down from $131.4 million in the prior year period.

Yellow offloads more two terminals to ArcBest

As TFI’s flip-flop on location unfolds, more trucking companies are participating in the fire sale of another former LTL provider’s real estate.

The estate of Yellow, the former century-old trucking business that ceased operations in summer 2023, sold off two more leased terminals to ArcBest for $11.5 million.

ArcBest, which owns LTL carrier ABF Freight, acquired a 32.5-acre, 108-door terminal in Aurora, Colo. for $7 million and a 60-door terminal on 12.6 acres in Kent. Wash for $4.5 million.

The trucking firm already had acquired four terminals from Yellow totaling $38 million across two rounds of auctions held at the end of 2023. Those auctions raised the estate $1.9 billion and $82.9 million.

ArcBest’s deal comes a week after a handful of trucking companies entered their own agreements to scoop up Yellow’s service centers.

Knight-Swift Transportation, in its pursuit to expand further into LTL, forked over $9.9 million for three California-based terminals in San Diego, Downey and Santa Maria, and another facility in Roanoke, Va.

A. Duie Pyle paid $4.5 million for terminals in Bowling Green, Ohio, and Charleston, W. Va., while TFI International bought a $700,000 terminal in Fayetteville, N.C.

Yellow’s estate has sold more than 175 terminals for more than $2.2 billion since its liquidation first began in late 2023. The insolvent trucking firm is currently selling off its real estate through both private sale transactions, with a three-day auction also scheduled for March 11.

Does ESG have a future?

Following a surge of adoption and acceptance over the past two decades, ESG—the investment and corporate policy trend that evaluates companies on environmental, social and governance factors—has been taking a beating recently. Among the examples of anti-ESG blowback making headlines: 

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  • A slate of Fortune 500 companies has dialed back on ESG and diversity commitments, several in response to pressure by U.S. conservative activist Robby Starbuck, who has targeted Meta, McDonald’s, Walmart, Boeing, Molson Coors and others.
  • Texas Attorney General Ken Paxton and the attorneys general of nine other states have targeted BlackRock, Goldman Sachs, JPMorgan Chase, Bank of America, Citigroup and Morgan Stanley over investment policies that they claim give short shrift to traditional energy investing. 
  • BlackRock chief executive officer Larry Fink has minimized exposure to ESG strategies, calling for “energy pragmatism” and a more nuanced path to decarbonization.
  • In January, JPMorgan was the last large U.S.-based bank to leave the Net Zero Banking Alliance, following the exits of Citi, BofA, Goldman Sachs, Morgan Stanley and Wells Fargo. That month, the Net Zero Asset Managers Initiative also suspended its activities, following major defections that included BlackRock.

So, is ESG dead? If it is, it looks like nobody told a lot of family offices. At the same time as some big U.S. financial players have been leaving the ESG fold, North American family offices appear to have been increasing their overall exposure to responsible investing. The North America Family Office Report 2024 by Campden Wealth and RBC notes that 28 per cent of family offices are engaged in responsible investing—somewhat below the global average of 40 per cent—but among those, responsible investments comprise an average of 41 per cent of their portfolios, up from 36 per cent the year before. Those family offices also said that this number will increase to around 50 per cent over the next five years. 

Compared with their American peers, Canadian investors in general also seem to have a continuing appetite for ESG investing. In 2023, Ortec Finance, a provider of technology and advisory services for risk and return management, surveyed 50 Canadian wealth managers and financial advisors. The survey reported that 96 per cent of their clients are increasing their focus on ESG credentials in their investment portfolios.

If investors are increasingly interested in incorporating responsible investments into their portfolios, why is ESG under assault?

Dragged into the “culture war”

ESG has become divisive because it means different things to different people, depending on their views of business, politics and society. ESG supporters, for example, may envision a universal set of positive business practices; detractors may see an unwieldy basket of politicized initiatives in which management seeks to appease external stakeholders while ignoring its fiduciary duty to investors. 

Dustyn Lanz

Part of the answer, too, is a political shift in the U.S., reflected in the policies of Donald Trump and a slate of state governors who have targeted ESG investing as a “woke” folly. 

“American politicians dragged ESG into the so-called culture war, making it a wedge issue,” says Dustyn Lanz, chief executive officer of proxy voting analytics firm OxProx, past CEO of Canada’s Responsible Investment Association and a former senior advisor with ESG Global Advisors Inc. “At first, we in the industry dismissed a lot of these attacks as bogus, because they are, but then red states started to target asset managers involved with ESG and climate-related initiatives. So, asset managers had no choice but to start taking these attacks seriously, like a form of political risk. As a result, we see some asset managers talking about ESG and sustainability much less, and leaving collaborative initiatives as a way to remove the target from their backs.” 

A February report by Canadian ESG advisory service Millani concurs, noting that Canadian institutional investors are embedding their commitments to ESG and refining their approach. “The focus has shifted from public-facing commitments to internal strategy refinement, risk management, and outcomes-oriented engagement,” the report says.

Has the industry outgrown ESG?

A consistent definition of ESG has long been an elusive goal, further muddying the waters for supporters and detractors alike. While a few ESG rating providers such as Bloomberg and Sustainalytics dominate the industry, companies can choose from dozens of agencies that offer similar services. A research letter published by the CPA Ontario Centre for Sustainability Reporting and Performance Management at the University of Waterloo by researcher Amar Mahmoud suggests that “research documents a low level of correlation between ESG ratings from different providers.”

A recent article in Harvard Business Review, “It’s Time to Unbundle ESG,” by professors Aaron Chatterji (Duke University) and Michael W. Toffel (Harvard Business School), suggests that responsible investing may have outgrown ESG. The authors trace the modern ESG movement to an influential 2004 United Nations initiative, Who Cares Wins, which promised that “ESG integration currently represents an important source of competitive differentiation and value creation for financial institutions that make it part of their strategy.”

While the Harvard authors are all for corporate responsibility, they question whether current ESG ratings systems are good enough going forward. “It was never clear exactly why E, S, and G were the right concepts to bring together with (apparently) equal weighting or how they were connected to each other,” Chatterji and Toffel write. “This awkward bundle would later prove to be a liability to the ESG movement as it went mainstream in the subsequent two decades.”

Lanz agrees that the definition of ESG is sometimes too restrictive, arguing that practical ESG should be less aspirational and philosophical and more comprehensive. 

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“For most major institutional investors, ESG integration has little to do with ethics or values,” he says. “It’s about considering all the material information that might impact a company’s performance. Management quality has always been a key consideration among investors. A leadership team’s management of ESG risks and opportunities is simply part of that evaluation.”

Does ESG really make for better investments?

Steven Globerman, a senior fellow at the Fraser Institute, highlights a conundrum for investors who want to increase their exposure to ESG investments in the hopes of reaping the financial benefits of exposure to better-managed companies. His recently published study, “ESG Investing and Financial Returns in Canada,” suggests that there’s no statistically significant relationship between ESG ratings and Canadian stock performance.

Steven Globerman

Examining data from MSCI, a leading ESG ratings provider, the study looked at statistical relationships between changes in ESG rankings of companies and changes in equity returns, using a sample of 310 companies listed on the Toronto Stock Exchange between 2013 and 2022. The study found that neither upgrades nor downgrades in ESG ratings significantly affected stock market returns. 

“Part of the motivation for the research was to determine whether complying with all those regulations is costly in terms of real resources, management time, etc., that has to be diverted into the compliance reporting exercise—resources that could be used in other ways,” Globerman says. “It’s not appearing in superior performance, at least as measured by stock market returns.”

He’s also skeptical of regulations that would force companies to disclose their fealty to a basket of ESG standards.

“If ESG did improve corporate performance, either by making a company more efficient or reducing risk, companies would not need to be regulated to disclose ESG standards,” he says. “They would do so voluntarily, because changes in corporate behaviour would reward them with a higher stock price.”

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Brad Cornell, emeritus professor of finance at UCLA and senior advisor at Cornell Capital Group, also questions whether a company with stellar ESG ratings is necessarily a good investment.

“Suppose I pick a company which is well managed, has great products, behaves ethically and manages risks well,” he says. “Does that alone make Apple a good investment? It depends on how the company stock is priced. Even if you think ESG indicates a lot of favourable things about a company that would lead to superior returns, it would lead to superior returns for investors only if those benefits were not properly priced in right off the bat.”

Brad Cornell CREDIT: Gittings Photography

Likewise, if investors tend to prefer high-profile firms with favourable ESG ratings, then the stock in those firms would be priced higher.

Cornell also points to litmus tests for ESG investing as problematic, citing exclusion screening of companies that produce carbon-based fuels as a prime example. “If you use carbon-based fuels, there are emissions, and there’s a social cost that goes along with that,” he says. “But you shouldn’t ignore the social benefits, such as the ability to heat your home affordably through cold Canadian winters. If you’re going to divest yourself of companies that produce hydrocarbons, why not go all the way and divest yourself of the companies that burn them—airlines, home heating companies or manufacturing companies?”

Some investors are also prioritizing their commitments to broader goals over absolute returns. They’re not investing to lose money, but they’re less concerned about whether a company that receives a high ESG rating delivers comparable returns to a company that doesn’t. They’re not necessarily married to the strict criteria of ESG ratings—but they do want to know the impact their investment will have on the world. 

Kind Capital is a wealth management practice that takes a pragmatic approach to responsible investing. The firm helps match clients to a range of investing strategies that may include ESG, but might also include socially responsible investing or impact investing—which aims to generate positive social or environmental impact alongside a financial return.

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“Our clients generally believe that money is a conduit to creating a meaningful and rewarding life, and our job is to help them figure out what that is,” says Kind Capital CEO and founder David O’Leary. “Once they’ve taken care of themselves and their families, they look to something bigger than themselves. We help them understand which levers they have to pull to make an impact on those things.”

David O’Leary

Kind Capital clients may want to invest in large, publicly traded companies who are doing the best job of managing ESG risks. Or they may want to make investments that would improve the lives of children in developing countries. They may want to invest in oil and gas companies that do a good job of managing risks in their sector, or they may want to avoid investments in traditional energy companies altogether.

“It’s our job to help them understand what types of activities their investments are supporting, and to help them align those investments with their values,” O’Leary says. “We can then explain whether achieving those goals would require them to sacrifice any financial returns. We want them to be intentional about the impact of their investments.”

While ESG may be in public retreat, companies aren’t abandoning a thorough assessment of business risks—and investors who care about ESG and the impact of their investments remain committed.

“Institutional investors largely have not changed course on ESG,” Lanz says. “Managers will meet demand wherever it exists, and big asset owners continue to consider all issues they deem to be material, including climate change and other ESG issues. While the ESG marketing party may be over, the consideration of ESG issues among investors isn’t going anywhere.”

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