Strategies Impact investing Development capital funds

(Québec residents only) and Community Economic Development Investment Funds (Nova Scotia residents only)

Québec’s development capital organizations invest in local businesses to spur economic development in regions across the province. These funds are unique to Québec. The development of these funds proved a crucial step in integrating the social economy into the mainstream socio-economic agenda and in developing grassroots social economy activities. Three development capital funds are currently available to individual investors: Fondaction CSN, Fonds de solidarité FTQ and Capital régional et coopératif Desjardins.

A Community Economic Development Investment Fund (CEDIF) is a pool of capital generated through the sale of shares (or units) to persons within a defined community and set up to operate or invest in local a business which must have at least six directors elected from the defined community. In many instances, these funds provide considerable social and environmental benefits, in addition to fulfilling local economic objectives. CEIDIFs are currently available only to Nova Scotia residents. Read more at http://www.novascotia.ca/econ/cedif/background/

Examples

Fonds de développement pour la coopération et l’emploi

CSN manages Fonds de développement pour la coopération et l’emploi, also known as Fondaction. This fund is devoted to the development of socially and environmentally responsible businesses. As set out in the fund’s mandate, 60% of all Fondaction assets must be invested in Québec. In 2014, Fondaction invested $619.9 million in more than a hundred SMEs and funds, thereby helping to sustain or create, either directly or indirectly, some 27 848 jobs.
(Source:
http://impactinvesting.marsdd.com/wp-content/uploads/2014/03/Impact-Investing-in-Canada-State-of-the-Nation.pdf page 28).

One Québec company included in the Fondaction portfolio is Bio Spectra which develops and manufactures environmentally friendly cleaning products marketed under the Attitude® brand name. The company has enjoyed Ecologo certification since 2008, and the entire product line has been free of carcinogens since 2012. For more information about companies in the Fondaction portfolio, click on the following link: http://www.fondaction.com/entreprise/financer-votre-eentreprise.php?exemples=investissements&categorie=option9&categorie2=option16#exemples

 

Fonds de solidarité FTQ Solidarity Fund

The FTQ manages the Fonds des sSolidarités FTQ, a labour- sponsored fund which that invests patient capital in Québec ois entrepreneurs in accordance with a broader its larger mandate to contribute to of enhancing community economic development in Quéebec. An example of one of the funds that the Fonds de solidarité was involved in financing is a fund for farmers. In 2010, Fonds de the FONDS de solidarité FTQ, the Government of Québec and Desjardins Capital joined forces to create The Fonds d’investissemennet pour la relève agricole (FIRA), a $75-million private fund established to support sustainable agriculture and the upcoming encourage the next generation of Québec farmers in Quebec. The program provides patient or long term patient capital in the form of subordinated loans or farmland lease agreements to enable young farmers to of farmland, allowing young farmers time to establish themselves and their ir agricultural businesses in the early years.
(Ssource: http://impactinvesting.marsdd.com/wp-content/uploads/2014/03/Impact-Investing-in-Canada-State-of-the-Nation.pdf p.31)

For a complete list of companies included in the Fonds de Solidarité portfolio, view see recent fund the most recent reports at:
http://www.fondsftq.com/fr–ca/financement/~/link.aspx?_id=E87A6F2719374EC48A5642691BED0D62&_z=z

FTQ 

Capital régional et coopératif Desjardins

The primary goals of Capital régional et coopératif Desjardins’ main objective are is to raise development capital in all regions of the province, for all regions of Québec. One of its priorities is to meet the capital needs of cooperatives, and to invest in the resource rich regions such as of Québec, namely, Abitibi-Témiscamingue, Lower Saint Lawrence, Bas-St-Laurent, North Shore, Côte-Nord, Gaspésie/Magdalen Islands, — Îles-de-la-Madeleine, Mauricie, Northern d-du-Québec and Saguenay/ — Lac-St-Jean.

For a comprehensive A complete listing of companies included in this e portfolio, click on the following link: can be found here.

DESJARDINS 

Strengths and Weaknesses

Strengths

  • Enables the general public to invest in small- and medium-sized businesses in the province, thereby boosting investment in ing in the local economiesy
  • Labour funds and CEDIF investments entitle investors to significant tax credits

Weaknesses

  • Only a limited number of labour fFund s have a limited number of shares that can be sold to the general public each very year during RRSP season.
  • The labour funds have lengthy ong holding requirements (illiquidity)
  • Capital development funds are available only available to Quéebec residents, and CEDIFs are only available to residents of Nova Scotia residents.