The Canadian Connection: Storing Your Gold in Gold Country
By Rich Checkan
Managing Director of International Depository Services of Canada (IDS), a non-bank precious metals storage firm in Toronto, explained to me how IDS infuses safety and security into their storage process. I have worked with Robyn and IDS at their Delaware and Canada facilities for many years. I know you will be interested in what she has to say.
Rich: What brought IDS to Canada?
Robyn: The IDS Canadian facility was established five years ago to meet client demand for geopolitical diversification through a storage option close to home, yet still offshore. Toronto gave us the perfect environment. Not only are we geographically close to the U.S., but Canada has traditionally been friendly to gold investing. Perhaps because of its resource rich history and the fact it still remains home to many mining companies and operations., Canada is very accepting of gold.
Rich: Does this make a difference for U.S. citizens storing gold?
Robyn: Surely. Unlike the U.S., Canada does not have a history of confiscation. There are currently no reporting requirements to the Canadian government when stored in Canada. If I may use the term, Canada is ‘neutral’ when it comes to gold.
Rich: You maintain a very high level of security at the facility, increasingly important today. How do you achieve that?
Robyn: We use a system based on standards similar to those for the manufacturing of highly technical and valuable products. Every part of our facility and operation must adhere to UL(C)® standards. This dictates everything from security instrument placement, quality of equipment, maintenance, etc. We have also worked closely with our insurer to make sure our facility at a minimum meets industry standard but often exceeds.
Rich: What is the level of insurance for a client's holdings?
Robyn: We provide all risk insurance through the world’s leading specialty insurance providers. But, there is more to our insurance than that. Many storage facilities only insure the value; we also take into consideration standard bullion fabrication cost. You may not realize that replacing precious metals often requires a fabrication fee, not just the underlying asset value.
Rich: Do you offer allocated and unallocated storage?
Robyn: No. The only storage we offer is allocated and fully segregated. The title to our stored metals is with the client alone, never our company. All precious metals are held in custody for the client as bailment and off out balance sheet. In other words, the exact metal that the client stores with IDS is the metal they will get back when they withdraw. Consequently, they cannot become subject to the claims of any IDS creditor.
Rich: Can clients visit the facility?
Robyn: Yes, of course. Proximity is one of our strong suits. Visitors are welcome to conduct their own audit of their own metals at our facility within a secure viewing area. Just remember that clients must meet our security requirements before access to any secure area is granted. Many of our clients also store metals at our facility in Delaware, do an audit in the morning in Delaware, and hop on a plane and do an audit in Toronto in the afternoon. Storing at both locations also allows for a convenient opportunity to transfer between.
Rich: What types of products can be stored in IDS of Canada?
Robyn: We suggest you store metals which are exempt from the 13% sales tax (HST) the Canadian government collects on most goods and services. Fortunately, precious metals which meet certain minimum purity standards are not subject to the tax, and that’s most bullion products except palladium. Additionally, bullion bars by recognized refiners are zero rated. As long as the brand trades on an exchange, it’s considered recognized.
Here are the minimum purity requirements for coins:
Rich: With the many storage choices available, what do you feel differentiates IDS of Canada from the other locations?
Robyn: In addition to security, IDS is designed to cater to precious metals, not cash and valuables transport. We operate at the cutting edge of online technology. Our platform, IDS Vault Direct™, allows clients to:
- Access accounts 24 hours a day, 7 days a week
- Review transactional activity
- Authorize transfers and out-shipments without having to scan or fax documents
- Give notice of incoming shipments
- View and download account statements and reports
- Track shipments and deliveries
- See the value of their holdings, online
Rich: What would you say is your client profile?
Robyn: We have institutional clients, national mints, high net-worth individuals and those with retirement accounts as small as 1,000 ounces of silver. Because we work with many IRA custodians, we get quite a bit of IRA storage. Set up is extremely easy and fees are based on the amount in the account, not the type of account.
If you have been reading our email alerts and newsletter, you know we have been highlighting some of the very best domestic and offshore private storage facilities we know. Although we think it best to start with direct storage yourself, at some point, it makes sense to diversify your storage needs with the professionals.
After all, the cheapest way to store precious metals is yourself… until they are lost or stolen. Then, it’s the most expensive method.