FirstOntario’s Class B Investment Share Offering

Investment shares give members the unique opportunity to invest in the ongoing success of FirstOntario Credit Union. The capital raised will support sustainable long-term growth of our credit union, enabling FirstOntario to invest in new products, services and ongoing digital transformation to meet the growing needs of our current and future members.

FirstOntario Credit Union is regulated by the Financial Services Regulatory Authority (FRSA) and is required to meet important standardized, international liquidity metrics. Canada’s financial industry has a strong regulatory system designed to provide checks and balances to protect members/consumers. FirstOntario is strong and well-regulated, monitoring and maintaining all liquidity requirements.

Membership shares must be purchased in order to become a member of FirstOntario – every member must have one membership share. Investment shares are an optional investment opportunity for FirstOntario members.

FirstOntario’s Board of Directors considers whether to declare a dividend, and at what rate, annually. Dividends may be paid in cash, shares, or in a combination of both. It has been the past practice of FirstOntario to pay dividends on its investment shares in the form of additional shares.

The target *dividend rate is the greater of:

• 6.00%*; and
• The average of the monthly five-year Government of Canada Bond over the recent fiscal year + 1.25%

The Board will adopt a dividend policy on all series of Class B Investment Shares consistent with that discussed above for Series 2023.

You must be a member of FirstOntario Credit Union, 18 years of age or older. Personal and business members are eligible. As Saven Financial and Creative Arts Financial are both divisions of FirstOntario Credit Union, these members can also purchase this series of shares.

FirstOntario’s Board must approve the dividend payment annually based on the credit union’s performance over that fiscal year. The decision considers profits, liquidity and operational and regulatory requirements. Dividend payments are not guaranteed. FirstOntario has consistently paid the annual dividend on all its existing investments share series, but past payment of dividends is no guarantee that dividends will be paid in the future or at any particular rate.

Canada Revenue Agency requires the return on investment shares be reported as interest income, despite the fact a return on these shares series is legally a dividend. Dividends on investment shares are considered interest income for tax purposes if held outside of registered products.

Another difference between investment shares and typical shares of a company is that investment shares do not ordinarily change in value. They are issued at a price of $1 and do not increase or decrease, unless the credit union is liquidated and there are insufficient assets to repurchase all of the investment shares that are issued and outstanding.

Yes, these shares can be held in a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP). It is possible to hold investment shares in a Registered Income Fund (RIF), but due to RRIF withdrawal requirements and the limited liquidity of the investment shares, the investor should carefully consider this decision.

Investment shares are not deposits. Investment shares are not insured by FSRA and do not enjoy any other form of guarantee of principal or dividends and are not secured by any assets of the credit union. Investment shares are backed by the strength of FirstOntario.

Investment shares offer the opportunity to earn a higher return, while strengthening your credit union and your community, but it is important that you review and understand the benefits and risks. Contact your local branch or our Member Service Centre to determine if this is the right investment for you.

No, investment shares are not convertible.

No, investment shares do not mature.

This series of shares is non-redeemable for five years after the issue date unless the shareholder dies or is expelled from membership in FirstOntario. Once that five-year non-redeemability period ends, members can request redemption at any time. Redemption requests are considered twice each year, at the Board meetings in March and September. Redemptions are limited to 10% of the shares issued and outstanding at the end of the preceding fiscal year.

Members are able to transfer (sell) their shares to another member at any time, provided there is an interested buyer.

Members can choose to transfer (sell) their investment shares to other members interested in purchasing. Since sales requests are processed based on whether other members have expressed interest in purchasing, FirstOntario cannot guarantee that any shares can be sold in any given time frame. FirstOntario maintains lists of potential sellers and buyers and matches these lists in order to facilitate the transfer of ownership.

Contact your branch or our Member Service Centre to learn more about transferring investment shares.

Your investment share offering statement outlines all the details on how members can request redemption of their investment shares. Requests must be received by February 28 or August 31. The Board considers redemption requests at its meetings in March and September each year and if approved, redemption requests will be processed no later than April 1 and October 1, respectively.

A maximum of 5% of the shares outstanding at the end of the previous fiscal year will be redeemed at these intervals (the later redemption limit may exceed 5% of the shares outstanding at the end of the preceding fiscal year so that redemptions in the aggregate during the fiscal year are 10% of the shares issued and outstanding at the end of the preceding fiscal year), so any requests in excess of the redemption limit will be reviewed at the following meeting on a first come, first served basis.

Contact your branch or our Member Service Centre to learn more about redeeming investment shares.

Visit your local branch or call our Member Service Centre to discuss this opportunity and obtain an offering statement. To book an appointment, please call our Member Service Centre at 1-800-616-8878.

For your convenience, you can review the offering statement here.