An expert wonders if it is really the role of a foundation benefiting from generous tax credits to participate in the revival of Lion Électrique, which is on the brink of collapse.
In 2023, the Mirella and Lino Saputo Foundation, together with Vincent Chiara’s Groupe Mach, provided $90 million in financing to Lion Électrique. The loan then carried an interest rate of 11%.
At the end of November, Vincent Chiara did not rule out adding money to Lion, provided that public money was also reinjected into the Saint-Jérôme firm.
“If the family [Saputo] is there [et réinvestit dans l’entreprise]we’re going to be there with them. But to my knowledge, this is not done,” he told Journal.
Lion Électrique, which carries a long-term debt of US$293 million and whose coffers are almost dry, obtained the 1is December a reprieve from its lenders until December 16 to find a solution.
Problematic
Brigitte Alepin, who is a professor in the Department of Accounting Sciences at the University of Quebec in Outaouais, considers it very problematic that the Saputo foundation finds itself at the heart of the financial safeguard of the Saint-Jérôme electric bus specialist.
Tax expert Brigitte Alepin is closely interested in the rules governing foundations in Canada, which she considers too permissive.
Photo PIERRE-PAUL POULIN
“Taxpayers, when they agree to give a 53% tax credit [au bénéfice d’une fondation]if we told them: “[La fondation] will take this money and then invest it in Lion”, I’m not sure that they would agree to give this tax credit”, she insists in an interview with The Journal.
Alepin emphasizes that the objective of the Saputo foundation is to distribute “donations to various foundations for medical research and other charitable organizations.”
Inadequate rules
Generally speaking, the tax expert judges that the rules surrounding foundations in Canada are inadequate and do not sufficiently force foundations to spend on the causes they say they support.
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Photo provided by the SAPUTO FOUNDATION
Other controversies
This is not the first time that the Saputo foundation has found itself at the center of controversy.
In 2021, The Journal had reported that the Foundation had purchased $100 million worth of shares in the Saputo company, even though the two were linked to the same family. The objective was apparently to be able to receive the company’s dividend, but experts had raised a high risk of conflicts of interest.
The Foundation also held, at the end of 2020, 5.3% of the shares of TFI (another company linked to Saputo) and it could have had at that time up to 80% of its portfolio invested in companies close to the family.
Contacted by The Journal Regarding the investment in Lion, the Foundation’s executive vice president, Francesco Miele, indicated that it was premature to comment at this stage.
THE MIRELLA ET LINO SAPUTO FOUNDATION
- $1 billion in assets under management
- $42.4M donated
- Revenues of $186.7M
Figures for 2023. Source: CharityData.ca.
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