Focussed on Canada
2024 Annual Report
Certain financial information contained in this report, including
investment growth rates, rates of return and other such statistical
information, are historical values; past performance is no assurance or
indicator of future returns. Share prices, net asset values and investment
returns will fluctuate. Stated historical returns assume the reinvestment
of all distributions. Such financial information does not reflect any
broker commissions, transaction costs or such other fees and expenses
which may have been applicable nor income taxes payable by any
shareholder, which would have the effect of reducing such historical
returns. Stated returns for periods greater than one year are compound
average annual rates of return. Further information concerning risk can
be found in the Company’s Annual Information Form which is available
on the Company’s website at www.canadiangeneralinvestments.ca or
on SEDAR at www.sedarplus.com.
The Company is an investment fund, and as such, this annual report
to shareholders carries a variety of information concerning stocks
and other investments, all for informational purposes only. The reader
should assume that the Company and all individuals and entities
(including the Manager and members of its staff) who have contributed
to this publication may have a conflict of interest. Readers should
therefore not rely solely on this report in evaluating whether or not to
buy or sell securities discussed herein.
Benchmark of S&P/TSX Composite Index: This is an index of
the equity prices of the largest companies listed on the Toronto
Stock Exchange (TSX) and is comprised of about 70% of market
capitalization for all Canadian-based companies listed on the TSX.
Index returns cited are on a total return basis (including reinvestment
of distributions).
Cover: Way Up High
Toronto artist Helen Pare works in acrylic paints in both impressionistic and abstract styles. She begins a landscape by referencing a photograph she has taken, embellishing the colours with distinct design as she
remembers it in her mind’s eye. Helen loves the beautiful colours and views that can be found in Canadian landscapes throughout the seasons.
“Way Up High” is based on a photo taken in the fall at Knox Mountain Park, BC, overlooking Okanagan Lake.
Helen is also a long-time employee of Morgan Meighen & Associates Limited.
The financial statements and management report of fund performance were approved by the Board of
Directors on February 20, 2025
Vanessa L. Morgan
Chair
i. the financial statements have been
prepared in accordance with International
Financial Reporting Standards and give a
true and fair view of the assets, liabilities,
financial position and profit or loss of the
Company;
ii. the management report of fund
performance includes a fair review of the
development and performance of the
business and the position of the Company,
together with a description of the
principal risks and uncertainties that the
Company faces.
Responsibility Statement
In accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom Financial
Services Authority, the Board of Directors confirms that to the best of its knowledge:
1
2024 Annual Report | Canadian General Investments, Limited
Dear Fellow Shareholders,
We are pleased to present the 2024 annual report for Canadian General Investments, Limited (CGI or the Company). In this report,
you will find information on the performance of CGI for 2024. The management report of fund performance contains a management
discussion of fund performance, a financial highlights section incorporating per share information as well as various financial ratios,
historical returns and a summary of investment portfolio which includes the top 25 holdings as at the end of the year. The full investment
portfolio as at December 31, 2024 is provided as part of CGI’s audited financial statements, which are included in this report.
For the 12 months ended December 31, 2024, CGI’s common shares
recorded a net asset value per share (NAV) total return of 26.6% and a
share price total return of 19.6% (share price change plus dividends).
By comparison, the total return of its benchmark, the S&P/ TSX
Composite Index, was 21.6% during the same period.
During 2024, CGI paid four quarterly regular taxable dividends,
aggregating to $1.00 per common share. Based on the year-end market
price of the common shares, aggregate dividends paid represented a
2.5% yield to shareholders.
CGI has been managed by Morgan Meighen & Associates Limited (the
Manager) since 1956. D. Greg Eckel, Senior Vice-President of the
Manager, is the portfolio manager responsible for the management of
CGI’s investment portfolio.
Further information about CGI, including the most recent
NAV and market price, current performance, the portfolio’s
weekly top 10 holdings, historical dividend payments, as well
as various financial and regulatory reports, can be found at
www.canadiangeneralinvestments.ca.
We appreciate your investment in CGI.
Vanessa L. Morgan
Chair
Jonathan A. Morgan
President & CEO
From left to right:
Vanessa L. Morgan, Chair;
President & CEO of the Manager
Jonathan A. Morgan, President & CEO;
Executive VP & COO of the Manager
D. Greg Eckel, Portfolio Manager;
Senior VP of the Manager
1 Year 3 Years 5 Years 10 Years
Compound Annual Returns For The
Periods Ending December 31, 2024
CGI NAV CGI Share Price S&P/TSX Composite Index
30%
25%
20%
15%
10%
5%
0%
2024 Annual Report | Canadian General Investments, Limited
2
CGI is a closed-end equity fund focussed on medium- to long-term
investments in primarily Canadian companies. It strives, through
prudent security selection, timely recognition of capital gains/
losses and appropriate income-generating instruments, to provide
better than average returns to investors.
CGI was established in 1930 and has been managed since 1956
by Morgan Meighen & Associates Limited
(www.mmainvestments.com).
The graph below is presented to illustrate the benefit of a long-term
investment in CGI’s common shares. A $10,000 investment in CGI
would have grown to over $99,000 over the 25-year period ended
December 31, 2024. This equates to a compound annual average
growth rate of 9.6%. By comparison, a $10,000 investment in the
benchmark S&P/TSX Composite Index would have grown to over
$56,000 or a compound average annual growth rate of 7.2%.
For the 50 years ended December 31, 2024, a $10,000 investment would have grown to over $3.0 million, representing a compound average
annual return of 12.1%. The values for the benchmark for the same period were $1,346,000 and 10.3%, respectively.
Canadian General Investments, Limited
Corporate Profile
Growth of a $10,000 Investment – 25 Years to December 31, 2024
CGI Share Price S&P/TSX Composite Index
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
1999 2004 2014 2024
2009 2019
3
2024 Annual Report | Canadian General Investments, Limited
Management Report of Fund Performance
Investment Objective and Strategies
Canadian General Investments, Limited (CGI or the Company)
is a closed-end equity fund focussed on medium to long-term
investments in primarily Canadian corporations. It strives, through
prudent security selection, timely recognition of capital gains/
losses and appropriate income generating instruments, to provide
better than average returns to investors.
The Manager, Morgan Meighen & Associates Limited (MMA or the
Manager), utilizes a bottom-up investment strategy in an effort to
achieve CGI’s objective. With this type of investment strategy, the
Manager first seeks individual companies with attractive investment
potential, then proceeds to consider the larger industry, economic
and global trends affecting those companies. This investment
style allows for sector weightings that can differ from those of the
benchmark, the S&P/TSX Composite Index (S&P/TSX).
Risk
The risks associated with an investment in the Company
are as disclosed in the Company’s Annual Information
Form which is available on the Company’s website at
www.canadiangeneralinvestments.ca or on SEDAR+ at
www.sedarplus.com.
Results of Operations
Performance
2024 was a very good year for Canadian equity investors despite
lingering domestic issues and global uncertainties. It was also a decent
year for most of the major developed markets around the world, but
North American markets had particularly strong results and the year’s
regional differentiations had Canadian markets exceeding the returns of
major European and Asian markets by a wide margin.
For the second consecutive year, double-digit gains were registered by
both the Canadian market and Canadian General Investments, Limited
(CGI). The S&P/TSX Composite Index (S&P/TSX) posted a generous
21.6% total return which CGI exceeded with a net asset value (NAV)
return, with dividends reinvested, of 26.6%.
Markets have shown strong resilience to the many ongoing situations
around the world that could have otherwise had more severe, longer-term
negative impacts. At least for now, in terms of market perspective, most
concerns have been pushed into the background but could resurface and
become disruptive influences. For example, Russia’s invasion of Ukraine
is three years in and there is no resolution in sight. Although sanctions
have rerouted trading channels and reconfigured some global alliances,
any final determination as to the extent of the fallout is yet to come.
The Middle East conflict has many intermixed complexities due to the
area’s sensitivities and an escalation could have profound implications.
Geopolitical risk has also elevated, and major, influential countries are
suggesting they withdraw from the efficiencies of global trade with the
adoption of policies that promote protectionism. Some of the proposed
measures are expected to provoke retaliation which could lead to major
trade wars. Collateral damage would likely be extensive and would pose
great risk to economic prosperity everywhere. These are but a few of the
many issues outstanding.
The primary focus of markets the last couple of years has been on the
spike in global inflation coming out of the pandemic. In a coordinated
effort, central banks around the world used interest rate policy as their
Management Discussion Of Fund Performance
This annual management report of fund performance contains financial highlights and should be read in conjunction with the complete audited annual
financial statements of the Company that follow this report. Securityholders may request a copy of the Company’s interim financial report, proxy voting
policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure, at no cost, by calling 416-366-2931 (Toll-free: 1-866-443-6097),
by writing to the Company at 10 Toronto Street, Toronto, Ontario M5C 2B7 or by visiting the Company’s website at www.canadiangeneralinvestments.ca.
The interim report is also available on SEDAR+ at www.sedarplus.com.
This report may contain forward-looking statements about the Company and markets that reflect the Manager’s current expectations of future events.
Forward-looking statements include statements that are predictive in nature, depend upon future events or conditions, or include words such as
“expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions. Forward-looking statements are subject to risks, uncertainties and
assumptions with respect to the Company and economic factors and actual results may differ materially for many reasons, including, but not limited to,
market and general economic conditions, interest rates, foreign exchange rates, changes in government regulations and catastrophic events. As a result,
the reader is cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking information is current only as of the date
of this report and there should be no expectation that such information will be updated as a result of new information, changing circumstances or future
events, unless required by applicable law.
2024 Annual Report | Canadian General Investments, Limited
4
Contributions to the success of the S&P/TSX were made by many
areas. Ten of the eleven sectors in the index were positive and ranged
from 2% to 38% with the negative outlier (Communication Services)
at -26%. Four sectors posted returns greater than the S&P/TSX
and included the two heavyweights of Financials and Energy. Their
combined weightings of about 50% skewed the upside of the total
return of the index and made for a somewhat concentrated market
with an outsized contribution of over 60% of the total index return.
Despite the return concentration and being underweight these
sectors, CGI was able to counter the headwinds with a reliance on its
successful bottom-up bias. Fortunately, it was a market that rewarded
the selection process with a huge dispersion of results exhibited within
every sector and this elevated the potential for generating meaningful
collective returns at the individual level. It was an opportunity of
which CGI took advantage and allowed it to deliver better than index
NAV returns for its shareholders.
The Energy sector is an influential sector in Canada. CGI has a
decent presence in the group but remains underweight the index. It
is a relative positioning that has been held since 2011, and has been
beneficial to the portfolio’s returns over that period. The Energy group
carries a profile that is often difficult to square with CGI’s approach.
Its inherent volatility and cyclicality can produce explosive returns but
also comes with heightened investment risk and erratic movements
not often sustained.
Energy stocks had solid returns for the year that were in excess of
the movements in their underlying commodities. A positive this year,
it is a situation that can work to either advantage or disadvantage
for the equities as valuations are constantly changing and affect the
direct relational connection. For instance, oil, as represented by the
benchmark WTI (Western Texas Intermediate), started strongly but,
by year end, had come back almost full circle with pricing much the
same as at the start of the year. In comparison, stocks did much better
with investors rewarding companies that had good corporate results,
strong free cash flow generation, improving balance sheets and a focus
on increasing shareholder returns.
main tool to combat the issue. The substantial rise in interest rates
wreaked havoc on equity markets as valuations were reset and fears of
severe economic fallout arose. It made for a very long and difficult period
but, in hindsight, the program appears to have been effective. Over time,
a combination of repaired supply chains, reduced demand pressures and
general economic slowdowns worked through the system and inflation
subsided. By late 2023, recession fears had diminished, and investors
began to speculate that interest rates could begin to fall. This provided
a much-needed catalyst to spark a resurgence in the markets after their
long period of dormancy and it renewed optimism for market prospects,
the main determinant for success in 2024.
The Canadian market followed a similar pattern to most of its global
peers, their movements tightly aligned to the progression of the interest
rate cycle. On expectations for rate relief, a positive momentum trend
coming out of 2023 had produced a strong start to the year but some
of that enthusiasm had to be scaled back when bond rates started to
regress and move higher. This caused a pullback in the markets in the
second quarter and interest-rate-sensitive sectors were particularly
hard hit. Expectations were eventually fulfilled when the Bank of
Canada came to the rescue and embarked on a rate-cutting program
mid-year. Its program of consistent and aggressive reductions in the
policy rate provided the boost necessary for the S&P/TSX to accelerate
in the second half and pushed the market to new highs.
North American markets generally moved in-sync with each other due to
their closely integrated economies. However, their comparative returns
remained dependent on each of their respective weightings of the
relatively limited, but dominant, group of companies usually referred to
as “The Magnificent Seven”. A factor in the equity markets for some time,
those that do not have a sizable exposure to these outsized influences,
like the Canadian market, have suffered in comparison. But there was
a notable change in the third quarter that gave an indication of what
may happen when markets broaden out and the playing field becomes
more level. Investors started to shift focus, rotating into areas that had
previously lagged, and this temporarily flipped the leadership board.
This was a positive influence for the Canadian market and the S&P/
TSX return almost doubled that of the S&P500 in the quarter. Although
inconclusive as to establishing any sort of meaningful change of trend
near term, it was a reminder that markets change and a diversified
portfolio like CGI would be a clear beneficiary.
The table below illustrates the weightings of the five largest sectors in
CGI’s portfolio at December 31, 2024, compared with year end 2023,
and with the S&P/TSX. The weightings for CGI represent the market
value of each sector as a percentage of the total investment portfolio.
At December 31, 2024, the portfolio was overweight Industrials and
Information Technology, and underweight Energy, Financials and
Materials, as compared to the sector weightings in the S&P/TSX.
CGI S&P/TSX
SECTOR
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
Industrials
23.4% 24.2% 12.6% 13.7%
Information Technology
23.0% 20.0% 10.1% 8.7%
Financials
13.4% 13.9% 33.0% 31.3%
Energy
12.3% 12.4% 17.1% 17.1%
Materials
11.2% 10.7% 11.4% 11.0%
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2024 Annual Report | Canadian General Investments, Limited
Trading activity in the sector was a little higher than normal this year,
as CGI’s largest holding in the Energy sector, Enerplus Corporation,
was subject to a takeover and disappeared mid-year. Enerplus had
been a very good performer for the portfolio, tripling in price since its
purchase in 2021 and providing over $20 million in realized gains. Some
of the proceeds were used to add to the Canadian Natural Resources
Limited holding. Canadian Natural is one of Canada’s senior oil and gas
companies and is a go-to, high quality investment for domestic and
foreign investors alike. The company has well defined and deliverable
financial targets and these are expected to bring meaningful increases
to shareholder returns in the near term. A new position was established
in Athabasca Oil Corporation, an intermediate producer of about
35,000 barrels per day. Athabasca has a very low decline base, huge
reserve life and a steady and predictable production profile. These
are attributes that fit well with CGI’s investment philosophy. Almost
entirely liquids (98%), it not only gives a pure play on global oil pricing
trends but should also benefit from a step-up function of pricing
received for its oil as a result of new pipeline take-away capabilities for
Albertan oil. A historic structural bottleneck, differentials received by
producers for their oil based on the Western Canadian Select (WCS)
standard for pricing rather than the WTI standard quoted in the U.S.
are likely to narrow and add value to their barrels.
A nuclear industry renaissance may be in the offing. Nuclear energy
has come to be considered a viable solution for growing power needs
has become more acceptable and made a priority in social, corporate
and government circles. Several factors have aligned in its favour, not
the least of which are decarbonization initiatives, energy security
and new technologies. Investors are reminded that Canada has been
a global leader in the nuclear industry for a long time. It is uniquely
positioned with an endowment of rich uranium deposits and proven
capabilities and has companies that provide exposure in an otherwise
limited opportunity set. The timelines involved with the provisioning
of nuclear energy are naturally extended and encompass the full life
cycle of planning, construction and operations. That aligns well with
CGI’s focus on the longer term. A position in Cameco Corporation,
the world’s largest publicly traded uranium company, was initiated in
late 2023 and was increased in 2024. The company offers investors a
complete package of participation in most aspects of the nuclear fuel
cycle as well as operations management. The portfolio’s exposure to
the uranium play was further increased in 2024 with a new position
established in a company called NexGen Energy Ltd. NexGen is a
uranium development and exploration company focussed on the
Athabasca Basin in Saskatchewan, best known as the world’s leading
source of extraordinarily high-grade uranium and home to Cameco’s
major mines. NexGen’s flagship project is considered to be one of the
best undeveloped uranium deposits in the world and it is nearing the
end of a lengthy permitting process that, once approved, will enable
construction to begin. The mine, once complete, is expected to be the
largest and one of the lowest-cost uranium mines in the world.
Gold stocks had a breakout year and drove returns in the Materials
sector. Franco-Nevada Corporation, the premium gold royalty
company, is CGI’s lone holding in the group but it is of size and a top
ten holding. In the middle of the sector’s yearly performance rankings,
it reflects good participation in the rally but couldn’t match the
operating companies that tend to be more levered to the gold price.
This is to be expected as its stock tends to give very acceptable returns
in both good and bad years but doesn’t have the volatility of the
pure mining companies. A good fit for CGI, Franco-Nevada provides
a measured and rewarding means for gold exposure and, in the long
term, has handily outperformed the group since its purchase in 2007.
In Forest and Lumber, stocks remained sluggish as persistently high
interest rates did not allow for a much-anticipated rebound in the
weak U.S. housing market. Interfor Corporation, highly sensitive to
the pure lumber market, underperformed and lost over 20% in value.
It was eliminated. CGI’s remaining participant is West Fraser Timber
Co. Ltd. which has been a long-term, top ten holding and provides good
exposure to the group. It is considered as the go-to name for investors
and performed much better than Interfor, posting a reasonable double-
digit gain (11%) for the year. Lastly, in Materials, with good, but fragile
performance, was First Quantum Minerals Ltd. Its stock rebounded
about 70%, a big number, but was following on steep losses the year
before as speculation swirls about prospects for its Cobre Panama
mine which has been shut down by the government.
In other areas, steep losses in Communication Services were observed
as growth prospects diminished and competition ramped up in
the mature industry. Exposure to the group was reduced with the
elimination of Telus Corporation but the portfolio still suffered with its
lone remaining position, Rogers Communications, posting a 25% drop.
The Information Technology sector was the runaway leader in terms of
performance and many of CGI’s top individual performers come from
that area. It is also CGI’s largest overweight relative to the S&P/TSX,
an opportunity facilitated by the Company’s ability to invest in U.S.
securities, and the combination was a positive influence on relative
performance. Constellation Software Inc., Celestica Inc., Shopify
Inc., Apple Inc. and The Descartes Systems Group Inc. all generated
extremely good returns in excess of 35% but NVIDIA Corporation,
CGI’s largest holding, was the standout and soared over 170%. Not a
recent addition, it was originally bought in 2016 and has exhibited very
strong growth ever since. Tracking its rise in the markets and following
on the Manager’s traditional investment discipline to take profits
prudently, sales in the investment have been made every year since
purchase except for 2019. This year alone, gains approximating $100
million were realized and lifetime gains now approach $200 million. It
has been a terrific investment for the Company.
Dividend and interest income was $20,754,000 for the year, down
2.8% from 2023. Management fees and interest and financing
charges are the largest expenses of the Company. Management fees
increased by 17.4% to $17,079,000 due to higher average portfolio
values during the period. Interest and financing charges increased
15.6%, as a result of a higher amount of average borrowings during
2024 compared to 2023, due both to the use of margin borrowings to
fund the redemption of the Company’s $75 million Class A preference
shares, Series 4 on June 12, 2023, as well as a $25 million increase in
aggregate borrowings during the fourth quarter of 2024.
Leverage
The Company has a prime brokerage services agreement with a Canadian
chartered bank. Amounts borrowed under this agreement bear interest
at the Canadian Overnight Repo Rate Average (CORRA) plus 0.42% per
annum (CORRA plus 0.90% prior to June 1, 2024 and the one-month
Canadian Dollar Offered Rate (CDOR) plus 0.60% prior to May 1, 2024).
The agreement requires the Company to pledge securities as collateral
for margin borrowings and may be terminated immediately by the prime
broker upon the occurrence and continuation of an event of default, as
defined in the agreement, or by either party with 30 days’ notice.
2024 Annual Report | Canadian General Investments, Limited
6
On June 6, 2024, securities pledged as collateral, which had been held in a
separate control account with the Company’s custodian, were transferred
to an account at the prime broker in order to secure better financing terms.
Pursuant to the prime brokerage services agreement, the prime broker
may pledge, lend or rehypothecate securities held in this account. As a
result, these securities are disclosed separately in the financial statements
as Investments pledged as collateral.
Amounts borrowed under this facility during the year ranged from $175.0
million to $200.0 million (2023 - $75.0 million to $175.0 million). As of
December 31, 2024, the $200.0 million outstanding under the borrowing
facility represented 13.8% of CGI’s net assets (December 31, 2023 –
15.1%). The borrowing facility acts as leverage to common shareholders.
This leverage served to increase the effect of overall portfolio returns,
positively impacting CGI’s NAV return for the years ended December 31,
2024 and December 31, 2023.
Taxation
As a corporate entity, CGI is subject to tax on its taxable income –
primarily realized gains on the sale of investments – at an effective rate of
approximately 20%. As a result of its investment corporation status under
Canadian tax law, CGI can recover taxes paid or payable on its realized
taxable capital gains through the payment of capital gains dividends
to shareholders. To the extent that taxes paid or payable on taxable
income and capital gains in a year are greater than taxes recovered on the
payment of capital gains dividends, there will be a negative impact on net
assets of the fund. For the year ended December 31, 2024, there was a
refundable income tax expense of $13,243,000, compared to $382,000
in the prior year. Taxes paid or payable on realized taxable capital gains
may be recovered through the payment of capital gains dividends in
future years.
As at December 31, 2024, the Company had federal refundable capital
gains taxes on hand of approximately $17,353,000 (December 31, 2023 –
$7,672,000), which are refundable on payment of capital gains dividends
of approximately $124.0 million (December 31, 2023 – $55.0 million)
and Ontario refundable capital gains taxes on hand of approximately
$7,979,000 (December 31, 2023 – $3,934,000), which are refundable
on payment of capital gains dividends of approximately $139.0 million
(December 31, 2023 – $68.0 million).
On June 10, 2024, draft legislation, which included the implementation of
an increase in the capital gains inclusion rate from one-half to two-thirds
for capital gains realized after June 24, 2024, was included in a Notice of
Ways and Means Motion tabled in the House of Commons. As this had
not been tabled as a bill in the House of Commons by the end of the year,
this change was not yet considered substantively enacted for accounting
purposes. However, on January 31, 2025, the Minister of Finance and
Intergovernmental Affairs announced that the federal government
was deferring the date on which the capital gains inclusion rate would
increase from one-half to two-thirds from June 25, 2024 to January 1,
2026 which, if enacted, will result in income taxes paid on capital gains
increasing from approximately 20% to approximately 26.33%. There can
be no assurance that the capital gains proposals will be enacted in their
current form, or at all.
Recent Developments
Outlook
The coming months and years could be a period of change, something that
markets don’t always handle very well. Fundamentals are supportive but
equity valuations in certain areas are elevated and could succumb to the
downside. The Canadian economy is stronger than it was a year ago and
may get a boost from lowered interest rates but will take time to break out
from its lethargy.
Potential challenges arising from a change in the U.S. administration
are dominating headlines and cast a great shadow of uncertainty over
markets going forward. The environment has become more challenging
for investors. On February 1, 2025, U.S. President Trump signed an
executive order imposing 25% tariffs on imported goods from Canada and
Mexico, along with 10% tariffs on China under the International Economic
Emergency Powers Act. Energy imports from Canada were to be subject
to a lower, 10% tariff rate. Although President Trump agreed to delay
the 25% tariffs for both Canada and Mexico by one month on February
3, after both countries agreed to increased border security measures,
on February 10, 2025, he signed additional executive orders, imposing
25% tariffs on steel and aluminum products from all countries, including
Canada, to take effect on March 12, 2025. In response to these threats,
Canada has announced countermeasures, being the imposition of its own
tariffs on specified goods imported from the U.S. The U.S. administration
subsequently rolled out a plan for reciprocal tariffs, to retaliate against
countries that place higher tariffs on U.S. imports.
Whether or not the tariffs come into effect in March, or if they are being
used by the U.S. as an aggressive way to initiate trade negotiations,
remains to be seen, but it seems likely that uncertainty, and the ongoing
threat of tariffs, will continue for some time to come. Given the integrated
economies, and Canada’s heavy reliance on trade with the U.S., there
could be significant negative implications for prices and supply chains
which will have negative repercussions on many Canadian companies,
and certainly volatility in share prices can be expected.
The Manager will rely on its steady approach for CGI’s portfolio to
weather through the potential storms that are appearing on the horizon.
Its long-term approach supports a calm and patient methodology that has
been used in the past to carry through volatile times and the portfolio’s
diversification will assist if markets become unbalanced. CGI’s investment
thesis has been tested and has been successful in all kinds of markets, a
testament to the consistent application of an investment style that has
rewarded shareholders for a very long time. That will not change.
Related Party Transactions
The Company is managed by MMA, a company under common control
with CGI. MMA provides continuing advice and investment management
services, as well as administration, financial reporting and other ancillary
services required by a publicly listed company. For more details concerning
the services that are provided by MMA and the management fee that is
charged to the Company, see “Management Fees”.
Third Canadian General Investment Trust Limited (Third Canadian),
a private, Ontario-based corporation under common control with
the Company, has an approximate 37% (December 31, 2023 – 37%)
ownership interest in the Company. As a result of its ownership position in
the Company, during the year ended December 31, 2024, Third Canadian
received taxable dividends of $7,630,000 (2023 – $5,493,000 of taxable
dividends and $1,831,000 of capital gains dividends).
7
2024 Annual Report | Canadian General Investments, Limited
(1) This information is provided as at the end of the year shown.
(2) Management expense ratio (MER) is based on total expenses (including leverage costs but excluding commissions and other portfolio transaction costs) for the stated period and is
expressed as an annualized percentage of daily average net asset value during the period.
(3) Excluding leverage costs (dividends on preference shares and interest and financing charges), the Company’s MERs were as follows: 2024 – 1.39%, 2023 – 1.42%, 2022 – 1.38%,
2021 - 1.37%, 2020 - 1.48%.
(4) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period.
(5) The Company’s portfolio turnover rate indicates how actively the Manager manages the Company’s portfolio investments. A portfolio turnover of 100% is equivalent to the Company
buying and selling all of the securities in its portfolio once in the course of the year. The higher a fund’s portfolio turnover rate in a year, the greater the trading costs payable by the fund
in the year. There is not necessarily a relationship between the turnover rate and the performance of a fund.
2024 2023 2022 2021 2020
Total net asset value (000’s)
(1)
$1,446,155 $1,160,441 $1,006,312 $1,279,896 $1,043,463
Number of shares outstanding
(1)
20,861,141 20,861,141 20,861,141 20,861,141 20,861,141
Management expense ratio
(2)(3)
2.10% 2.26% 1.89% 1.72% 2.11%
Trading expense ratio
(4)
0.04% 0.02% 0.01% 0.03% 0.04%
Portfolio turnover rate
(5)
13.72% 7.40% 2.10% 6.17% 10.14%
Net asset value per share
(1)
$69.32 $55.63 $48.24 $61.35 $50.02
Closing market price
(1)
$40.48 $34.73 $32.60 $44.05 $34.81
Ratios and Supplemental Data
(1) This information is derived from the Company’s audited annual financial statements.
(2) Net assets and dividends are based on the actual number of shares outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number
of shares outstanding over the financial period and may not match the financial statements due to rounding.
(3) Dividends were paid in cash.
The Company’s Net Assets per Share
(1)
2024 2023 2022 2021 2020
Net assets – beginning of year $55.63 $48.24 $61.35 $50.02 $36.98
Increase (decrease) from operations
Total revenue
1.01 1.06 1.00 0.74 0.78
Total expenses (excluding common share dividends)
(1.34) (1.22) (0.98) (0.99) (0.83)
Realized gains (losses) for the year
5.91 3.52 (0.12) 3.95 1.81
Unrealized gains (losses) for the year
9.74 5.01 (12.18) 8.93 12.15
Refundable income tax recovery (expense)
(0.63) (0.02) 0.09 (0.42) (0.03)
Total increase (decrease) from operations
(2)
14.69 8.35 (12.19) 12.21 13.88
Dividends paid to common shareholders
Taxable dividends
(1.00) (0.72) (0.92) (0.44) (0.63)
Capital gains dividends
- (0.24) - (0.44) (0.21)
Total dividends
(3)
(1.00) (0.96) (0.92) (0.88) (0.84)
Net assets – end of year $69.32 $55.63 $48.24 $61.35 $50.02
Financial Highlights
The following tables show selected key financial information about the Company and are intended to help you understand the Company’s financial
performance for the past five years.
2024 Annual Report | Canadian General Investments, Limited
8
Past Performance
The performance information shown assumes that all dividends paid by CGI to common shareholders were reinvested in additional common
shares of the Company. The performance information does not take into account broker commissions or other fees potentially payable by
holders of the Company’s shares that would have reduced returns or performance. How the Company has performed in the past does not
necessarily indicate how it will perform in the future.
Year-by-Year Returns
The following bar charts show the Company’s performance for each of the years shown, and illustrate how the Company’s performance has
changed from year to year. The bar charts show, in percentage terms, how much an investment made on the first day of each year would have
grown or decreased by the last day of each year.
Annual Compound Returns
The following table shows the Company’s historical annual compound total returns for the periods indicated, compared with the S&P/TSX.
The Index return is also calculated on a total return basis, assuming that all distributions are reinvested.
1 Year 3 Years 5 Years 10 Years
Canadian General Investments, Limited – NAV
26.6% 5.9% 15.4% 12.3%
Canadian General Investments, Limited – Share Price
19.6% -0.2% 12.0% 10.7%
S&P/TSX Composite Index
21.6% 8.6% 11.1% 8.7%
The S&P/TSX Composite Index is a market capitalization-weighted index that provides a broad measure of performance of the Canadian equity market.
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
40%
20%
0%
-20%
-40%
The bar chart below illustrates CGI’s net asset value per share return, with dividends reinvested at net asset value per share
31.0%
38.1%
24.6%
18.2%
26.6%
17.4%
21.5%
-7.2%
-10.9%
-20.0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
40%
20%
0%
-20%
-40%
The bar chart below illustrates CGI’s share price return, with dividends reinvested at the market price
8.2% 9.5%
19.6%
32.1%
37.0%
29.4%
26.3%
-10.8%
-24.1%
-2.7%
Management Fees
The Company pays a management fee that is calculated and paid monthly at 1% per annum of the market value of CGI’s investments
adjusted for cash, portfolio accounts receivable and portfolio accounts payable. The Company’s management fees were used by MMA to
pay costs for managing the portfolio and making investment decisions, as well as the provision of administrative services including making
brokerage arrangements for the purchase and sale of securities, calculating the daily net asset value of the Company, maintaining financial
and corporate records, preparing financial statements and all required regulatory filings and assisting in promotion activities. The officers
of the Company are remunerated by MMA in their capacity as directors and/or officers of MMA and receive no compensation from CGI.
9
2024 Annual Report | Canadian General Investments, Limited
Top 25 Holdings
Issuer
Sector
% of Net
Asset Value*
% of Investment
Portfolio
NVIDIA Corporation
TFI International Inc.
The Descartes Systems Group Inc.
Apple Inc.
Canadian Pacific Kansas City Limited
WSP Global Inc.
Mastercard Incorporated
Shopify Inc.
West Fraser Timber Co. Ltd.
Franco-Nevada Corporation
Celestica Inc.
Amazon.com, Inc.
Dollarama Inc.
Royal Bank of Canada
Constellation Software Inc.
Bank of Montreal
MDA Space Ltd.
FirstService Corporation
AutoZone Inc.
Cash
First Quantum Minerals Ltd.
Cameco Corporation
goeasy Ltd.
Teck Resources Limited
Waste Connections, Inc.
Information Technology
Industrials
Information Technology
Information Technology
Industrials
Industrials
Financials
Information Technology
Materials
Materials
Information Technology
Consumer Discretionary
Consumer Discretionary
Financials
Information Technology
Financials
Industrials
Real Estate
Consumer Discretionary
Cash & Cash Equivalents
Materials
Energy
Financials
Materials
Industrials
5.1
4.7
4.5
4.3
4.1
4.1
3.8
3.6
3.6
3.4
3.2
3.1
3.0
2.9
2.8
2.7
2.6
2.6
2.6
2.4
2.3
2.3
2.1
1.9
1.7
4.5
4.1
4.0
3.8
3.6
3.6
3.3
3.2
3.2
3.0
2.8
2.7
2.6
2.6
2.4
2.3
2.3
2.3
2.2
2.1
2.0
2.0
1.9
1.7
1.5
79.4* 69.7
Total Net Asset Value* ($000’s)
$1,446,155
Total Investment Portfolio* ($000’s)
$1,646,688
Summary Of Investment Portfolio
As at December 31, 2024
Sector Allocation
Asset Allocation
% of Net
Asset Value*
% of Investment
Portfolio
% of Net
Asset Value*
% of Investment
Portfolio
Industrials
Information Technology
Financials
Energy
Materials
Consumer Discretionary
Real Estate
Cash & Cash Equivalents
Communication Services
26.7
26.1
15.3
14.0
12.7
11.1
4.8
2.4
0.8
23.4
23.0
13.4
12.3
11.2
9.7
4.2
2.1
0.7
Canadian Equities
Foreign Equities
Cash & Cash Equivalents
87.0
24.5
2.4
76.4
21.5
2.1
* Total Net Asset Value represents Total Investment Portfolio adjusted for leverage ($200.0 million) in the form of a borrowing facility, other assets and other liabilities.
The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Company. The most recent quarterly portfolio disclosure may be obtained by visiting
the Company’s web site at www.canadiangeneralinvestments.ca, by calling 416-366-2931 (Toll-free: 1-866-443-6097), or by writing to the Company at 10 Toronto Street, Toronto,
Ontario, Canada, M5C 2B7.
2024 Annual Report | Canadian General Investments, Limited
10
The Company maintains appropriate processes to ensure that
relevant and reliable financial information is produced. The
financial statements have been prepared in accordance with
International Financial Reporting Standards and include certain
amounts that are based on estimates and judgements. The
significant accounting policies, which Management believes are
appropriate for the Company, are described in note 3 to the
financial statements.
The Board of Directors is responsible for reviewing and approving
the financial statements and overseeing Management’s
performance of its financial reporting responsibilities. An
Audit Committee comprised of non-Management Directors
is appointed by the Board. The Audit Committee reviews the
financial statements, adequacy of internal controls, the audit
process and financial reporting with Management and the
external Auditor. The Audit Committee reports to the Board
of Directors prior to the approval of the audited financial
statements for publication.
PricewaterhouseCoopers LLP, the Company’s external Auditor, who
is appointed by the shareholders, audited the financial statements
in accordance with Canadian generally accepted auditing standards
and International Standards on Auditing to enable them to express
to the shareholders their opinion on the financial statements. Their
report is set out on pages 11 through 13.
Management Report
The accompanying financial statements have been prepared by Management and approved
by the Board of Directors of the Company. Management is responsible for the information
and representations contained in these financial statements.
Vanessa L. Morgan
Chair
Jonathan A. Morgan
President & CEO
February 20, 2025
Financial Reports
11
2024 Annual Report | Canadian General Investments, Limited
Our opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Canadian General
Investments, Limited (the Company) as at December 31, 2024 and 2023, and its financial performance and its cash flows for the years then
ended in accordance with IFRS Accounting Standards.
What we have audited
The Company’s financial statements comprise:
• the statements of financial position as at December 31, 2024 and 2023;
• the statements of comprehensive income for the years then ended;
• the statements of changes in net assets for the years then ended;
• the statements of cash flows for the years then ended; and
• the notes to the financial statements, comprising material accounting policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards and International Standards on Auditing. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section
of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements
in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for
the year ended December 31, 2024. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Independent auditor’s report
To the Shareholders of Canadian General Investments, Limited
Jonathan A. Morgan
President & CEO
2024 Annual Report | Canadian General Investments, Limited
12
Other information
Management is responsible for the other information. The other information comprises the Management Report of Fund Performance,
which we obtained prior to the date of this auditor’s report and the information, other than the financial statements and our auditor’s report
thereon, included in the annual report, which is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the information, other than the financial statements and our auditor’s report thereon, included in the annual report, if we
conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting
Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends
to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Valuation of investments and investments
pledged as collateral
Refer to note 3 – Material accounting policy information and note
5 – Financial risk management to the financial statements.
The Company’s investments and investments pledged as
collateral (together, the investments) of $1,611 million as
at December 31, 2024 comprised instruments traded in an
active market. The Company measures its investments at fair
value through profit or loss.
The Company measures the fair value of an instrument using
quoted prices in an active market for that instrument.
We considered this a key audit matter due to the significance
of the investments, and the degree of audit effort required in
performing audit procedures related to the valuation of the
investments.
Our approach to addressing the matter included the following
procedures, among others:
• Tested and assessed the reasonableness of the fair value
of the investments by independently obtaining market
prices from external sources for each investment.
Key audit matter
How our audit addressed the key audit matter
13
2024 Annual Report | Canadian General Investments, Limited
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards and International Standards
on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards and International Standards on Auditing, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Derek Hatoum.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
February 20, 2025
2024 Annual Report | Canadian General Investments, Limited
14
Note
December 31,
2024
December 31,
2023
Assets
Current assets
Investments
5 1,360,930 1,114,648
Investments pledged as collateral
5,6 250,469 210,303
Cash
35,289 11,177
Interest and dividends receivable
1,878 1,808
Other assets
142 158
Total assets
1,648,708 1,338,094
Liabilities
Current liabilities
Accounts payable and accrued liabilities
12 2,310 2,271
Income taxes payable
243 382
Borrowing facility
6 200,000 175,000
Total liabilities
202,553 177,653
Net assets
1,446,155 1,160,441
Equity
Share capital
8 128,568 128,568
Retained earnings
1,317,587 1,031,873
Total equity
1,446,155 1,160,441
Net assets per common share
69.32 55.63
As at December 31, 2024 and December 31, 2023
(in thousands of Canadian dollars, except per share amounts)
Director Director
Approved by the Board of Directors
The accompanying notes are an integral part of these financial statements.
Statements of Financial Position
15
2024 Annual Report | Canadian General Investments, Limited
Statements of Comprehensive Income
Note 2024 2023
Income
Net gains on investments
Dividend income
20,722 21,318
Interest
33 37
Net realized gain on sale of investments
123,872 73,633
Net change in unrealized gain on investments
203,279 104,556
Net gains on investments
347,906 199,544
Securities lending revenue
13
424 806
Total income
348,330 200,350
Expenses
Management fees
12
17,079 14,546
Interest and financing charges
6,7
9,381 8,113
Transaction costs on purchases and sales
561 260
Listing and regulatory costs
339 302
Directors’ fees and expenses
12
311 314
Investor relations
293 221
Custodial fees
165 163
Withholding taxes
10
156 189
Audit fees
75 71
Independent review committee fees and expenses
12
41 49
Security holder reporting costs
34 37
Legal fees
30 215
Dividends on preference shares
7
- 1,266
Other
47 68
Total expenses
28,512 25,814
Net investment income before income taxes
319,818 174,536
Refundable income tax expense 9
13,243 382
Increase in net assets from operations
306,575 174,154
Increase in net assets from operations, per common share 14.70 8.35
For the years ended December 31, 2024 and December 31, 2023
(in thousands of Canadian dollars, except per share amounts)
The accompanying notes are an integral part of these financial statements.
2024 Annual Report | Canadian General Investments, Limited
16
Share Capital Retained Earnings Total
At December 31, 2022
128,568 877,744 1,006,312
Increase in net assets from operations
- 174,154 174,154
Taxable dividends paid to common shareholders
- (15,018) (15,018)
Capital gains dividends paid to common shareholders
- (5,007) (5,007)
At December 31, 2023
128,568 1,031,873 1,160,441
Increase in net assets from operations
- 306,575 306,575
Taxable dividends paid to common shareholders
- (20,861) (20,861)
At December 31, 2024
128,568 1,317,587 1,446,155
For the years ended December 31
(in thousands of Canadian dollars)
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets
17
2024 Annual Report | Canadian General Investments, Limited
Note 2024 2023
Cash flows from (used in) operating activities
Increase in net assets from operations
306,575 174,154
Adjustments for:
Net realized gain on sale of investments
(123,872) (73,633)
Net change in unrealized gain on investments
(203,279) (104,556)
Purchases of investments*
(173,790) (95,280)
Proceeds of disposition of investments*
214,493 98,700
Interest on borrowing facility
9,378 8,015
Dividends paid to preference shareholders
- 1,266
Amortization of financing charges 7
- 99
Interest and dividends receivable
(70) 68
Other assets
16 134
Income taxes payable/recoverable
9 (139) 2,283
Accounts payable and accrued liabilities
271 197
Net cash flows from operating activities
29,583 11,447
Cash flows from (used in) financing activities
Proceeds from borrowing facility
25,000 100,000
Interest on borrowing facility
(9,610) (7,454)
Dividends paid to common shareholders
(20,861) (20,025)
Redemption of preference shares
- (75,000)
Dividends paid to preference shareholders
- (1,389)
Net cash flows used in financing activities
(5,471) (3,868)
Net increase in cash
24,112 7,579
Cash at the beginning of the year
11,177 3,598
Cash at the end of the year
35,289 11,177
Items classified as operating activities
Interest received
33 37
Dividends received, net of withholding taxes
20,491 21,133
Income taxes recovered (paid) – net
9 (13,385) 1,901
For the years ended December 31
(in thousands of Canadian dollars)
*Excludes in-kind transactions of $33,060 for the year ended December 31, 2024.
The accompanying notes are an integral part of these financial statements.
Statements of Cash Flows
2024 Annual Report | Canadian General Investments, Limited
18
Energy (12.3%)
185,000
3,500,000
2,250,000
450,000
530,000
275,000
2,500,000
950,000
226,000
295,000
1,263,661
Energy Equipment & Services
Precision Drilling
Corporation
Oil, Gas & Consumable Fuels
Athabasca Oil Corporation
Baytex Energy Corp.
Cameco Corporation.
Canadian Natural
Resources Limited
Enbridge Inc.
NexGen Energy Ltd.
Parex Resources Inc.
TC Energy Corporation
Tourmaline Oil Corp.
Whitecap Resources Inc.
15,102
18,161
12,460
29,571
21,032
2,830
26,412
11,085
5,699
9,930
11,827
16,265
18,655
8,325
33,260
23,521
16,778
23,700
13,851
15,140
19,623
12,889
Total Energy
164,109 202,007
Industrials (23.4%)
1,280,000
Aerospace & Defense
MDA Space Ltd.
28,503 37,798
100,000
Building Products
Builders Firstsource, Inc.
19,855 20,582
75,000
100,000
Commercial Services & Supplies
Boyd Group Services Inc.
Waste Connections, Inc.
15,947
11,183
16,258
24,660
215,000
235,000
Construction & Engineering
Stantec Inc.
WSP Global Inc.
22,167
10,389
24,248
59,446
275,000
220,000
Machinery
ATS Corporation
Westport Fuel Systems Inc.
16,046
13,135
12,056
1,131
332,000
Marine Transportation
Algoma Central Corporation
2,555 4,914
690,000
Passenger Airlines
Air Canada
3,554 15,359
90,000
575,000
350,000
Road & Rail
Canadian National Railway Company
Canadian Pacific Kansas City Limited
TFI International Inc.
10,947
6,352
5,029
13,137
59,846
67,984
100,000
40,000
Trading Companies &
Distributors
FTAI Aviation Ltd.
SiteOne Landscape Supply, Inc.
19,229
3,293
20,742
7,590
Total Industrials
188,184 385,751
As at December 31, 2024
Number
of Shares Investment Cost
Fair
Value
Financials (13.4%)
275,000
245,000
260,000
265,000
76,900
185,000
72,000
Banks
Bank of Montreal
Royal Bank of Canada
Toronto-Dominion Bank
Capital Markets
Brookfield Corporation
Economic Investment Trust
Limited
Consumer Finance
goeasy Ltd.
Financial Services
Mastercard Incorporated, A
10,640
10,190
5,599
11,405
3,851
17,140
5,047
38,376
42,463
19,898
21,894
12,612
30,841
54,595
Total Financials
63,872 220,679
Consumer Discretionary (9.7%)
142,000
310,000
Broadline Retail
Amazon.com, Inc.
Dollarama Inc.
5,929
1,065
44,861
43,487
230,000
Leisure Products
BRP Inc.
14,551 16,838
8,000
32,000
Specialty Retail
AutoZone, Inc.
Home Depot, Inc.
4,864
5,380
36,887
17,925
Total Consumer Discretionary
31,789 159,998
Number
of Shares Investment Cost
Fair
Value
Communication Services (0.7%)
250,000
Wireless
Telecommunication Services
Rogers Communications Inc., B NV
3,506
11,048
Total Communication
Services
3,506 11,048
(in thousands of dollars) (in thousands of dollars)
Schedule of Investment Portfolio
19
2024 Annual Report | Canadian General Investments, Limited
Schedule of Investment Portfolio
Materials (11.2%)
2,400,000
1,800,000
290,000
480,000
417,125
Metals & Mining
Capstone Copper Corp.
First Quantum Minerals Ltd.
Franco-Nevada Corporation
Teck Resources Limited, B SV
Paper & Forest Products
West Fraser Timber Co. Ltd.
Total Materials
23,486
11,566
13,258
15,478
21,954
85,742
21,336
33,354
48,987
27,974
51,953
183,604
Number
of Shares Investment Cost
Fair
Value
Information Technology (23.0%)
350,000
344,000
380,000
9,000
9,000
400,000
310,000
27,003
330,000
21,000
16,738
173,000
Electronic Equipment,
Instruments & Components
Celestica Inc.
IT Services
Shopify Inc.
Semiconductors &
Semiconductor Equipment
NVIDIA Corporation
Software
Constellation Software Inc.
Constellation Software Inc. wts
03/31/40, unlisted
The Descartes Systems Group Inc.
Lightspeed Commerce Inc.
Lumine Group Inc.
Open Text Corporation
Roper Technologies, Inc.
Topicus.com Inc.
Technology Hardware,
Storage & Peripherals
Apple Inc.
31,102
1,819
669
11,598
-
10,317
6,502
377
4,916
10,060
-
1,639
46,431
52,629
73,483
40,004
-
65,360
6,795
1,111
13,424
15,720
2,034
62,385
Total Information Technology
78,999 379,376
Number
of Shares Investment Cost
Fair
Value
(in thousands of dollars)(in thousands of dollars)
NV: non-voting
SV: subordinate voting
*Includes investments pledged as collateral of $250,469
Total investments (97.9%)*
661,761
Cash (2.1%)
Investment Portfolio (100.0%)
Transaction costs
-
(1,092)
1,611,399
35,289
1,646,688
As at December 31, 2024
Real Estate (4.2%)
95,000
145,000
3,200,000
Real Estate Management
& Development
Colliers International Group Inc.
FirstService Corporation
StorageVault Canada Inc.
Total Real Estate
17,820
20,352
8,480
46,652
18,571
37,757
12,608
68,936
2024 Annual Report | Canadian General Investments, Limited
20
Canadian General Investments, Limited (CGI or the Company) is
domiciled in Canada and incorporated under the laws of Ontario,
Canada. The address of its registered office is 10 Toronto Street,
Toronto, Ontario, Canada, M5C 2B7.
Canadian General Investments, Limited is a closed-end equity
fund focussed on medium to long-term investments in primarily
Canadian corporations. It strives, through prudent security
selection, timely recognition of capital gains/losses and appropriate
income generating instruments, to provide better than average
returns to investors.
The Company’s investment and administration activities are
managed by Morgan Meighen & Associates Limited (the Manager).
The Company’s common shares are publicly listed and trade on
the Toronto Stock Exchange and on the London Stock Exchange
(symbol CGI).
These financial statements were authorized for issue by the Board
of Directors on February 20, 2025.
The Company’s financial statements have been prepared in
accordance with IFRS Accounting Standards.
For the years ended December 31, 2024 and 2023
Notes to the Financial Statements
1
2
General Information
Basis of Presentation
The material accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the periods presented.
3.1 Financial Assets and Financial Liabilities
Classification
The Company recognizes financial instruments at fair value upon
initial recognition, plus transaction costs in the case of financial
instruments measured at amortized cost. Investment transactions
are recorded on the trade date. The Company measures securities
at fair value through profit or loss (FVTPL). The portfolio of
financial assets is managed and performance is evaluated on a fair
value basis. The Company and the Manager are primarily focussed
on fair value information and use that information to assess the
assets’ performance and to make decisions. The Company has not
taken the option to irrevocably designate any equity securities as
fair value through other comprehensive income. Consequently, all
investments are measured at FVTPL.
All other financial assets and liabilities are classified at amortized
cost or financial liabilities, as applicable, and are measured at
amortized cost and reflect the amount to be received or paid,
discounted, when appropriate, at the contract’s effective interest
rate.
Fair value measurement
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
When available, the Company measures the fair value of an
instrument using quoted prices in an active market for that
instrument. A market is regarded as active if quoted prices are
readily and regularly available and represent actual and regularly
occurring market transactions on an arm’s length basis. Publicly
traded securities are valued at the last traded market price on the
reporting date, where the last traded price falls within the day’s
bid-ask spread. In circumstances where the last traded price is not
within the bid-ask spread, the Manager determines the point within
the bid-ask spread that is most representative of fair value based
on the specific facts and circumstances. The Company’s policy is to
recognize transfers into and out of the fair value hierarchy as of
the date of the event or change in circumstances giving rise to the
transfer.
Unlisted securities that trade on an over-the-counter market and
other securities, in special circumstances where a market quotation
is not readily available or is considered inappropriate (such as a
stale price), are valued using available sources of information and
commonly used valuation techniques, using primarily observable
inputs. The Company considers observable inputs to be market
data that is readily available, regularly distributed or updated,
reliable and verifiable, and provided by independent sources.
The best evidence of the fair value of a financial instrument at
initial recognition is the transaction price, i.e. the fair value of
the consideration given or received, unless the fair value of that
instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without
modification or repackaging) or based on a valuation technique
whose variables include only data from observable markets.
3
Material Accounting Policies
21
2024 Annual Report | Canadian General Investments, Limited
3
Material Accounting Policies (continued)
3.2 Foreign Currencies
Assets and liabilities denominated in foreign currencies are translated
into Canadian dollars at period-end exchange rates. Purchases and
sales of investments, investment income and expenses are calculated
at the exchange rates prevailing on the dates of the transactions. The
Canadian dollar is the Company’s functional and presentation currency.
3.3 Investment Income
Dividend income is recorded on the ex-dividend date. Interest
is recognized on an accrual basis. Securities lending revenue is
recognized as earned.
3.4 Securities Lending
Securities lent are not derecognized in the Company’s statement of
financial position as the Company retains substantially all the risks
and rewards of ownership.
3.5 Cash
Cash is comprised of demand deposits with reputable
financial institutions.
3.6 Increase (decrease) in net assets from
operations, per common share
The increase (decrease) in net assets from operations, per common
share is calculated by dividing increase (decrease) in net assets
from operations by the weighted-average number of common
shares outstanding during the period.
3.7 Taxation
The Company qualifies as an investment corporation under Section
130 of the Income Tax Act (Canada) (the Act) and, as such, is subject
to a reduced rate of income tax on its net investment income other
than dividends received from taxable Canadian corporations. Taxes
paid on taxable dividends paid from corporations resident in Canada
are refundable on the payment of taxable dividends to shareholders
related to these dividends.
Income taxes are paid by the Company on net capital gains realized
at the rate of approximately 20% (note 9). These income taxes are
recoverable by the Company as long as it continues to qualify as an
investment corporation and pays out sufficient dividends related to
these realized gains. Refundable income taxes paid or recovered are
recorded as an expense or recovery in the period in which such tax
becomes payable or receivable.
In addition, temporary differences between the carrying values
of assets and liabilities for accounting and income tax purposes
give rise to deferred income tax assets and liabilities. The most
significant temporary difference is that between the reported fair
value of the Company’s investment portfolio and its adjusted cost
base (ACB) for income tax purposes. To the extent that the fair value
of the Company’s portfolio exceeds its ACB, a deferred tax liability
arises which is fully offset by the future refundable taxes available
to the Company as an investment corporation. Conversely, when the
ACB exceeds the fair values of the portfolio, a deferred tax asset is
generated. A deferred tax asset is also generated to the extent that
the Company has available and unutilized capital and non-capital
tax losses. However, these net deferred tax assets have not been
recorded in the statements of financial position since, with the
exception of refundable income taxes described above, the Company
does not record income taxes since it is, in substance, not taxable.
3.8 Investment in associates and subsidiaries
The Company has determined that it meets the definition of
“investment entity”. An investment entity is an entity that (i)
obtains funds from one or more investors for the purpose of
providing them with investment management services; (ii) commits
to its investors that its business purpose is to invest funds solely
for returns from capital appreciation, investment income, or both;
and (iii) measures and evaluates the performance of substantially
all of its investments on a fair value basis. The most significant
judgement that the Company has made in determining that it meets
this definition is that fair value is used as the primary measurement
attribute to measure and evaluate the performance of substantially
all of its investments.
Subsidiaries are entities over which the Company has control
through its exposure or rights to variable returns and has the
ability to affect those returns through its power over the entities.
As the Company meets the definition of an investment entity,
all subsidiaries, if any, are measured at FVTPL. The Company’s
investments may also include associates over which the Company
has significant influence and these are measured at FVTPL. As at
December 31, 2024 and December 31, 2023, the Company has no
investment in associates or subsidiaries.
3.9 Future accounting changes
In April 2024, the International Accounting Standards Board issued
IFRS 18, Presentation and Disclosure in the Financial Statements which
aims to improve the quality of financial reporting by introducing new
requirements which include new required categories and subtotals
in the Statement of comprehensive income and enhanced guidance
on grouping of information. IFRS 18 replaces IAS 1, Presentation of
Financial Statements. This standard is effective for annual periods
beginning on or after January 1, 2027, with early adoption permitted.
The Manager is currently assessing the impact of these new
requirements.
2024 Annual Report | Canadian General Investments, Limited
22
The preparation of the financial statements in conformity with IFRS
Accounting Standards requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which
the estimates are revised and in any future periods affected.
5.1 Financial Risk Factors
In the normal course of operations, the Company’s activities expose
it to a variety of financial risks: credit risk, liquidity risk and market
risk (including interest rate risk, currency risk and price risk). Market
prices and the fair value of investments in the Company’s portfolio
fluctuate on a daily basis as a result of changes in interest rates,
economic conditions, market and company news, political conditions,
natural disasters, and public health emergencies, including an
epidemic or pandemic. In general, the Manager seeks to minimize
the potential adverse effects of these risks on the Company’s
performance by employing professional, experienced portfolio
managers, by ongoing monitoring of the Company’s positions and
market events, and by diversifying the investment portfolio within
the policies and guidelines set by the Board of Directors of the
Company, in a manner consistent with the investment objective.
Pursuant to the Manager’s bottom-up selection mandate, security
selection is the primary criteria for managing risk. In order to
mitigate risk, depending on conditions, the Manager considers other
criteria such as asset class, industry, country and currency.
Credit risk
Credit risk is the risk that one party to a financial instrument will
cause a financial loss for the other party by failing to discharge an
obligation. The Company’s main exposure to credit risk may consist
of investments in debt instruments, including short-term securities,
bonds, preferred shares, interest and dividends receivable, amounts
due from brokers, securities on loan as part of the Company’s securities
lending program, as well as securities held in a separate control account
with the Company’s custodian or prime brokerage account, as part
of its borrowing facility. The fair value of debt instruments includes
consideration of the creditworthiness of the debt issuer. The carrying
amount of cash, interest and dividends receivable and other assets
represents the maximum credit risk exposure as at December 31, 2024
and December 31, 2023. As at December 31, 2024 and December 31,
2023, the Company had no investments in debt instruments.
Credit risk related to cash is considered low as it is held at AA-rated
Canadian banks (consistent with prior year). All transactions in
securities are settled/paid for on delivery using approved brokers. The
risk of default is considered minimal, as delivery of securities sold is only
made once the Company’s custodian has received payment. Payment
is made on a purchase once the securities have been received by the
Company’s custodian. The trade will fail if either party fails to meet
its obligation.
Credit risk with respect to the Company’s securities lending program
is considered minimal given the nature of the collateral, as well as the
indemnification provided by the agent administering the program
(note 13).
Credit risk related to the Company’s borrowing facility is considered
low given the credit worthiness of the prime broker (note 6).
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
As the Company is a publicly traded, closed-end investment fund with
a fixed number of common shares outstanding, unlike an open-ended
mutual fund, it is not exposed to the liquidity risk associated with
daily cash redemptions of securities. However, as part of a leverage
strategy, the Company currently has $200 million (December 31,
2023 – $175 million) borrowed through a borrowing facility. On June
12, 2023, the Company redeemed its $75,000,000, 3.75% cumulative,
redeemable Class A preference shares, Series 4. As at December 31,
2024, the leverage represented 13.8% of CGI’s net assets (December
31, 2023 – 15.1%).
Liquidity risk is managed by investing the majority of the Company’s
assets in investments that are traded in an active market and which
can be readily disposed of, and by retaining sufficient cash and cash
equivalent positions to maintain liquidity. Restricted and unlisted
securities, if any, are identified in the schedule of investment portfolio.
There was one unlisted security as at December 31, 2024 and two at
December 31, 2023.
Leverage decisions, whether in the form of a borrowing facility or
bond or preference share issues from treasury, are at the discretion of
the Company’s Board of Directors.
As at December 31, 2024 and December 31, 2023, all financial
liabilities of the Company fall due within twelve months.
Market risk
The Company’s investments are subject to market risk which is the risk
that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. The following include
sensitivity analyses that show how the net assets would have been
affected by a possible change in the relevant risk at each reporting
date. In practice, the actual results may differ and the differences could
be material.
4
Critical Accounting Estimates & Judgements
5
Financial Risk Management
23
2024 Annual Report | Canadian General Investments, Limited
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in market
interest rates. The Company’s interest-bearing financial assets and
financial liabilities expose it to risks associated with the effects of
fluctuations in the prevailing levels of market interest rates on its
financial position and cash flows.
Although the Company may invest in interest-bearing financial
instruments, the substantial majority of the Company’s financial
assets are non-interest bearing or have short maturities. As a result,
the Company is not subject to significant amounts of risk on its
investments due to fluctuations in the prevailing levels of market
interest rates.
As at December 31, 2024 and December 31, 2023, the Company had
no investments in debt instruments.
The Company’s most significant financial liability is its borrowing
facility with interest rates on these borrowings being short-term.
The amount of borrowings on the facility may be reduced at any time.
For the year ended December 31, 2024, a 1% increase or decrease
in the interest rate, with all other variables held constant, would
have resulted in the interest and financing charges increasing or
decreasing, respectively, by approximately $2,000,000 (December 31,
2023 – $1,750,000).
Currency risk
Currency risk arises from financial instruments that are
denominated in a currency other than the Canadian dollar.
The Company is exposed to the risk that the value of securities
denominated in other currencies will fluctuate due to changes
in exchange rates. Securities trading in foreign markets are
also exposed to currency risk, as the price in local terms in the
foreign market is converted to Canadian dollars to determine
fair value. The Company’s policy is not to enter into any hedging
arrangements.
As at December 31, 2024, the Company`s investment portfolio had
a 21.5% (December 31, 2023 – 22.8%) weighting in U.S. dollars. As
at December 31, 2024, had the Canadian dollar strengthened or
weakened by 5% in relation to all currencies represented in the
portfolio, with all other variables held constant, net assets would
have decreased or increased, respectively, by approximately
$17,739,000 or approximately 1.2% (December 31, 2023 –
$15,227,000 or approximately 1.3%).
Price risk
Price risk is the risk that the fair value of financial instruments will
fluctuate as a result of changes in market prices (other than those
arising from interest rate risk or currency risk), whether these
changes are caused by factors specific to an individual investment
or its issuer, or by factors affecting all similar instruments traded in
a market or market segment. All securities present a risk of loss of
capital. The Manager moderates this risk through careful selection
of securities and other financial instruments within the parameters
of the investment strategy and by maintaining a well diversified
portfolio. The maximum risk resulting from financial instruments
is equivalent to their fair value. The Company’s equity and debt (if
any) instruments are susceptible to other price risk arising from
uncertainty about future prices of the instruments.
As at December 31, 2024, a 5% increase or decrease in market
prices in the investment portfolio, excluding cash and short-term
securities, with all other variables held constant, would have
resulted in the Company’s net assets increasing or decreasing,
respectively, by approximately $80,570,000 or approximately
5.6% (December 31, 2023 – $66,248,000 or approximately 5.7%).
5
Financial Risk Management (continued)
2024 Annual Report | Canadian General Investments, Limited
24
Concentration risk
Concentration risk arises as a result of the concentration of exposures
within the same category, whether it is geographical location, product
type, industry sector or counterparty type. The following is a summary
of the Company’s concentration by sector in the investment portfolio:
Industry Sector
December 31,
2024
December 31,
2023
Industrials
23.4% 24.2%
Information Technology
23.0% 20.0%
Financials
13.4% 13.9%
Energy
12.3% 12.4%
Materials
11.2% 10.7%
Consumer Discretionary
9.7% 10.8%
Real Estate
4.2% 4.6%
Communication Services
0.7% 1.9%
Consumer Staples
0.0% 0.7%
Cash
2.1% 0.8%
100.0% 100.0%
Sensitivity analyses are provided for information purposes only. In practice, the actual trading results may differ from this sensitivity analysis
and the difference could be material.
5.2 Capital Risk Management
The Company considers capital to be composed of its equity, as
well as its borrowing facility. The Company’s primary objective
when managing its capital is to ensure that activities are carried
out in accordance with the investment objective of the Company,
as described in note 1. With respect to the borrowing facility, the
Company is required to maintain sufficient collateral in the form
of securities in an account with the Company’s prime broker, based
on margin requirements established by the prime broker. There
has been no event of default since the prime brokerage services
agreement was entered into effective May 12, 2021.
5.3 Fair Value Measurements
The Company classifies its investments within a fair value hierarchy,
based on the inputs used in their fair value measurement. The hierarchy
of inputs is summarized below:
Level 1: Unadjusted quoted prices at the measurement date in active
markets for identical assets
Level 2: Directly or indirectly observable inputs other than quoted prices
included in Level 1, such as quoted prices for identical or similar assets in
markets that are not active
Level 3: Inputs for the assets that are not based on observable market data
Level 2 investments include positions that are not traded in active
markets and/or subject to transfer restrictions, and valuations may
be adjusted to reflect illiquidity and/or non-transferability, which are
generally based on available market information and commonly used
valuation techniques.
All other financial instruments of the Company, which may include cash,
receivable on investments sold or payable on investments purchased,
interest and dividends receivable, accounts payable and accrued
liabilities, accrued dividends on preference shares, borrowing facility
and preference shares are carried at amortized cost. Except in respect
of the preference shares, amortized cost approximates fair value given
the short-term nature of the financial instruments.
5
Financial Risk Management (continued)
25
2024 Annual Report | Canadian General Investments, Limited
5
Financial Risk Management (continued)
(in thousands of dollars)
Level 1 Level 2 Level 3 Total
As at December 31, 2024
Financial assets at FVTPL:
Investments
1,360,930
- -
1,360,930
Investments pledged as collateral
250,469
- -
250,469
1,611,399
- -
1,611,399
As at December 31, 2023
Financial assets at FVTPL:
Investments
1,114,648
- -
1,114,648
Investments pledged as collateral
210,303
- -
210,303
1,324,951
- -
1,324,951
During the year ended December 31, 2024 and December 31, 2023, there were no investments transferred between the levels.
The Manager is responsible for performing fair value measurements included in the financial statements of the Company, including Level 3
measurements, if any. The Manager obtains pricing from a third party pricing vendor.
Subject to approval by the Board of Directors, the Company may
use various forms of leverage, including by way of a margin facility
with a prime broker or a loan facility with a bank.
The Company has a prime brokerage services agreement with a
Canadian chartered bank. Amounts borrowed under this agreement
bear interest at the Canadian Overnight Repo Rate Average
(CORRA) plus 0.42% per annum (CORRA plus 0.90% prior to June
1, 2024, and the one-month Canadian Dollar Offered Rate (CDOR)
plus 0.60% prior to May 1, 2024). The agreement requires the
Company to pledge securities as collateral for margin borrowings
and may be terminated immediately by the prime broker upon the
occurrence and continuation of an event of default, as defined in
the agreement, or by either party with 30 days’ notice.
As at December 31, 2024, the Company had pledged securities as
collateral to the prime broker equal to $250,469,000 (December
31, 2023 – $210,303,000) on the outstanding borrowings of
$200,000,000 (December 31, 2023 – $175,000,000) plus accrued
interest of $662,000 (December 31, 2023 – $894,000).
On June 6, 2024, securities pledged as collateral, which had been
held in a separate control account with the Company’s custodian,
were transferred to an account at the prime broker. Pursuant to the
prime brokerage services agreement, the prime broker may pledge,
lend or rehypothecate securities held in this account. As a result,
these securities are disclosed separately in the financial statements
as Investments pledged as collateral. Although the prime broker
did not have the ability to pledge, lend or rehypothecate securities
held in the separate control account with the Company’s custodian
prior to the transfer, the Company has presented the comparative
balance to enhance comparability with the current year’s
financial statements.
6
Borrowing Facility
2024 Annual Report | Canadian General Investments, Limited
26
The Company is authorized to issue, in series, a class of preference shares. On June 12, 2023, the Company redeemed its $75,000,000,
3.75% cumulative, redeemable Class A preference shares, Series 4. No shares are outstanding as at December 31, 2024 or December 31,
2023. As at December 31, 2022, these shares had deferred issuance costs, net of amortization, of $99,000.
7
Preference Shares
Common Shares
The Company is authorized to issue an unlimited number of
common shares. As at December 31, 2024, there are 20,861,141
(December 31, 2023 – 20,861,141) common shares issued and
outstanding with no par value.
Subsequent to December 31, 2024, the Company declared
a quarterly dividend of $0.27 per share payable on March 15,
2025 to common shareholders of record at the close of business
on February 28, 2025.
8
Share Capital
As at December 31, 2024, the Company had federal refundable capital
gains taxes on hand of approximately $17,353,000 (December 31, 2023 –
$7,672,000), which are refundable on payment of capital gains dividends
of approximately $124.0 million (December 31, 2023 – $55.0 million)
and Ontario refundable capital gains taxes on hand of approximately
$7,979,000 (December 31, 2023 – $3,934,000), which are refundable
on payment of capital gains dividends of approximately $139.0 million
(December 31, 2023 – $68.0 million).
As at December 31, 2024, the Company has no unused non-capital losses
for tax purposes (December 31, 2023 – $390,000).
The Company is also subject to a special tax of 38-1/3% on taxable
dividends received from corporations resident in Canada. This special
tax is refundable on payment of taxable dividends to shareholders at the
rate of $0.3833 for each $1 of such dividends paid. The Company has
$1,493,000 of refundable dividend tax on hand as at December 31, 2024
(December 31, 2023 – $1,991,000).
(in thousands of dollars)
2024 2023
Provision for (recovery of) income taxes on net investment income (loss) before
income taxes
Provision for income taxes based on combined Canadian federal and
provincial income tax rate of 39.5%
126,328 68,943
Increase (decrease) in income taxes resulting from:
Dividends from taxable Canadian companies
(7,759) (7,922)
Dividends on preference shares
- 500
Net change in unrealized gain on investments
(80,296) (41,300)
Non-taxable portion of net realized gain on sale of investments
(24,465) (14,543)
Increase (decrease) in refundable dividend tax on hand
(498) 1,371
Utilization of non-capital loss carryforward
(97) (5,838)
Differences arising from use of different cost bases for income tax
and accounting purposes
30 160
Income taxes recoverable on capital gains dividends paid to common shareholders
- (989)
Refundable income tax expense
13,243 382
9
Income Taxes
The Company’s refundable income tax provision during the year is determined as follows:
27
2024 Annual Report | Canadian General Investments, Limited
The Company incurs withholding taxes imposed by certain countries on investment income. Such income or gains are recorded gross
of withholding taxes in the statements of comprehensive income. Withholding taxes are shown as a separate item in the statements of
comprehensive income. During the year ended December 31, 2024, the average withholding tax rate paid by the Company was 15.0%
(December 31, 2023 – 15.0%).
In accordance with the Act, a corporation can qualify as an
investment corporation if certain tests are satisfied. One of the
tests is that the corporation cannot have specified shareholders.
A specified shareholder is generally a shareholder, who, along
with certain persons to whom the shareholder is considered to
be related, has a greater than 25% shareholding. The Company
has had specified shareholders since June 20, 1996. The specified
shareholder rules of the Act generally allow the Company to
maintain its investment corporation status as long as it does
not have any specified shareholders other than those specified
shareholders existing on June 20, 1996. In addition, the specified
shareholders as at June 20, 1996 cannot, after that date,
contribute capital or acquire additional shares of the Company
other than through certain specified transactions.
On June 10, 2024, draft legislation, which included the
implementation of an increase in the capital gains inclusion rate
from one-half to two-thirds for capital gains realized after June 24,
2024, was included in a Notice of Ways and Means Motion tabled
in the House of Commons. As this had not been tabled as a bill in
the House of Commons by the end of the year, this change was not
yet considered substantively enacted for accounting purposes.
However, on January 31, 2025, the Minister of Finance and
Intergovernmental Affairs announced that the federal government
was deferring the date on which the capital gains inclusion rate
would increase from one-half to two-thirds from June 25, 2024 to
January 1, 2026 which, if enacted, will result in income taxes paid on
capital gains increasing from approximately 20% to approximately
26.33%. There can be no assurance that the capital gains proposals
will be enacted in their current form, or at all.
10
Withholding Taxes
All of the Company’s financial assets were carried at amortized cost, with the exception of Investments which is carried at FVTPL. All
the Company’s financial liabilities were carried at amortized cost. All gains and/or losses recorded on the statement of comprehensive
income relate to investments measured at fair value through profit or loss.
11
Financial Instruments by Category
12
Related Party Information
Third Canadian General Investment Trust Limited (Third Canadian)
owns 36.6% of the common shares of the Company and is therefore
considered a related party. Jonathan A. Morgan and Vanessa L.
Morgan, both directors and executive officers of the Company,
beneficially own directly or indirectly or exercise control or
direction over an aggregate of 100% of the common shares of Third
Canadian. Including the holding by Third Canadian, Mr. Morgan and
Ms. Morgan together own directly or indirectly or exercise control
or direction over an aggregate of 52.5% of the outstanding common
shares of the Company, making them the ultimate controlling party.
Transactions With Related Entities
Management fees
The Company’s activities are managed by the Manager pursuant
to a management agreement dated July 18, 2018. Mr. Morgan and
Ms. Morgan together own directly or indirectly 100%, and are both
directors and executive officers, of the Manager. Management
fees are paid monthly to the Manager for services received in
connection with the management of the Company’s financial
accounts and investment portfolio, among other services. These
fees are calculated monthly at 1% per annum of the fair value of
the Company’s investments adjusted for cash, portfolio accounts
receivable and portfolio accounts payable. Values for fee calculation
purposes are determined on the basis of the financial statements of
the Company as at the last day of the applicable month.
During the year ended December 31, 2024, $16,925,000 (2023 –
$14,526,000) was paid to the Manager with $1,552,000 accrued and
included in accounts payable and accrued liabilities as at December
31, 2024 (December 31, 2023 – $1,260,000).
2024 Annual Report | Canadian General Investments, Limited
28
The Company participates in a securities lending program with its
custodian, CIBC Mellon Trust Company. Collateral is held by the
custodian as agent for the Company and generally comprises Canadian
or provincial government-guaranteed securities or obligations of other
governments with appropriate credit ratings, and other short-term
securities, of at least 105% of the fair value of securities on loan. In the
event that any of the loaned securities are not returned to the Company
and the value of the collateral held is less than the fair value of the
securities not returned, the custodian shall indemnify the Company for
any such shortfall.
At December 31, 2024, the Company had loaned securities with a
fair value of $113,023,000 (December 31, 2023 – $16,650,000) and
the custodian held collateral of $117,901,000 (December 31, 2023
– $18,099,000). This collateral is not reflected in the statements of
financial position and consisted of the following:
13
Securities Lending
Dividends
As a result of its ownership position in the Company, during the year ended December 31, 2024, Third Canadian received taxable dividends of
$7,630,000 (2023 – $5,493,000 of taxable dividends and $1,831,000 of capital gains dividends).
Key management personnel compensation
No compensation was paid or is payable by the Company to any executive of the Manager in his or her capacity as a director or officer of the Company.
During the year ended December 31, 2024, the independent directors of the Company received directors’ fees aggregating $282,000 (2023 –
$291,000) from the Company. No other compensation was paid or is payable to the directors of the Company for the year ended December 31, 2024,
except for compensation paid by the Company in respect of such persons acting as members of the Independent Review Committee for the Company,
aggregating $39,000 (2023 – $48,000).
December 31, 2024 December 31, 2023
Securities lending collateral
Corporate debt securities
0.1% 0.0%
Federal government debt securities
4.9% 31.5%
Provincial government debt securities
7.3% 50.9%
U.S. government debt securities
87.7% 17.6%
100.0% 100.0%
A reconciliation of the gross earnings from securities lending to the net earnings from securities lending is as follows:
(in thousands of dollars)
December 31, 2024 December 31, 2023
Gross securities lending earnings
819 100.0% 1,405 100.0%
Fees
(178) (21.7%) (338) (24.0%)
Withholding taxes
(217) (26.5%) (261) (18.6%)
Net securities lending earnings
424 51.8% 806 57.4%
CORPORATE INFORMATION
BOARD OF DIRECTORS
Marcia Lewis Brown
Board Director
A. Michelle Lally
Partner, Osler, Hoskin & Harcourt LLP
Jonathan A. Morgan
Executive Vice-President and Chief
Operating Officer,
Morgan Meighen & Associates Limited
Vanessa L. Morgan
President & Chief Executive Officer,
Morgan Meighen & Associates Limited
Sanjay Nakra
Board Director
Clive W. Robinson
Senior Vice-President,
Morgan Meighen & Associates Limited
Michael C. Walke
Chief Executive Officer,
Canadian Centre for Audit Quality
AUDIT COMMITTEE
Marcia Lewis Brown
A Michelle Lally
Sanjay Nakra
Michael C. Walke (Chair)
CORPORATE GOVERNANCE
COMMITTEE
Marcia Lewis Brown (Chair)
Jonathan A. Morgan
Michael C. Walke
INDEPENDENT DIRECTORS
COMMITTEE
Marcia Lewis Brown
A. Michelle Lally (Chair)
Sanjay Nakra
Michael C. Walke
OFFICERS
Vanessa L. Morgan, CFA
Chair
Jonathan A. Morgan, CIM
President & CEO
Frank C. Fuernkranz, CPA, CA, CFA
CFO
Christopher J. Esson, CPA, CA, CFA
Treasurer
Laura M. Jess, CIM
Secretary
OFFICE OF THE COMPANY
10 Toronto Street
Toronto, Ontario, Canada M5C 2B7
Telephone: (416) 366-2931
Toll Free: 1-866-443-6097
Fax: (416) 366-2729
e-mail: cgifund@mmainvestments.com
website: www.canadiangeneralinvestments.ca
MANAGER
Morgan Meighen & Associates Limited
Toronto
AUDITOR
PricewaterhouseCoopers LLP
Toronto
INDEPENDENT REVIEW COMMITTEE
Marcia Lewis Brown (Chair)
A. Michelle Lally
Sanjay Nakra
Michael C. Walke
CANADIAN REGISTRAR
AND TRANSFER AGENT
Computershare Trust Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario, Canada M5J 2Y1
Telephone:
Canada & U.S.: 1-800-564-6253
Overseas: 1-514-982-7555
Fax:
Canada & U.S.: 1-888-453-0330
Overseas: 1-416-263-9394
website: www.computershare.com/investor
To change your address, eliminate multiple
mailings or for other shareholder account
inquiries, please contact Computershare at
the above address. We are pleased to offer
you the convenience of Direct Registration
System (DRS), a system that allows you to
hold securities in ‘book entry’ form without
the need for a physical certificate. To
participate, simply send your share certificate to
Computershare along with a letter requesting
the deposit of the shares into DRS.
U.K. TRANSFER AGENT
Computershare Investor Services PLC
Bridgwater Road
Bristol, BS99 6ZY United Kingdom
Telephone: +44 (0) 370 702 0003
website: www.computershare.com/investor
STOCK EXCHANGE LISTINGS
The Toronto Stock Exchange
Trading Symbol:
Common Shares CGI
The London Stock Exchange
Trading Symbol:
Common Shares CGI
PUBLICATION
Net asset value per share (NAV) and/or market
price and market return are published daily/
weekly in various media in Canada and the U.K.
The Company posts ongoing top 10 portfolio
investments (priced at market), together with
current NAV and market return information
on its website. CGI also posts its top 25
holdings on its website on a quarterly basis.
Similar information is available directly from
the Company upon request.
DIVIDEND REINVESTMENT AND
SHARE PURCHASE PLAN
The Plan, administered by the Company’s
Canadian Transfer Agent, offers an efficient
method of acquiring additional shares. As well
as with reinvested dividends, shareholders
may purchase additional shares for cash
(minimum $100 – maximum $5,000) every
quarter. Shares are purchased on the open
market, with participants paying the average
cost while the Company pays all administrative
charges, including commissions. The Plan
may be used for self-directed RRSPs. Also, a
number of Canadian brokers offer dividend
reinvestment plans to CGI shareholders. Note:
U.S. shareholders are eligible for the dividend
reinvestment segment of the plan only.
ANNUAL MEETING OF
SHAREHOLDERS
The Annual General Meeting of shareholders
of Canadian General Investments, Limited
will be held Thursday, the 24th day of April,
2025 at 9:00 a.m. (Toronto time) at The
Albany Club, Sir John A. Macdonald Room, 91
King Street East, Toronto, Ontario, Canada,
M5C 1G3.
DIVERSITY POLICY
Information and disclosure with respect to
the Company’s policy on Board Diversity can
be found within the Company’s Management
Information Circular.
Managed by:
CANADIAN GENERAL INVESTMENTS, LIMITED
10 Toronto Street, Toronto, Ontario, Canada M5C 2B7
Telephone: (416) 366-2931 Toll Free: 1-866-443-6097 Fax: (416) 366-2729
e-mail: cgifund@mmainvestments.com
website: www.canadiangeneralinvestments.ca