International Forum on the Social and Solidarity Economy

International Forum on the Social and Solidarity Economy

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Q: The Basics…what is a CEDIF?A: Access to “patient” Capital

• Company or co-operative• Set up to raise investment capital• Minimum 6 directors • Elected at AGM and make

investment decisions on behalf of the shareholders

• Minimum $100,000 & 25 investors• Average Fund is about $500,000

Raise Capital- Close Offering- Make Investment (s)

Port Hood Beach Sunrise RV Park

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Investment Incentives to Investors

• NS personal income tax credit of 35%- as of January 1, 2010

• Rollovers (5)= 20%; (10)= 10%• Carry back (3)/ forward (7 yrs.)• Maximum annual tax credit

now $17,500 ($50,000 investment)

• Does not reduce ACB of investment. Marigold Cultural Centre, Truro

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Watts Wind Energy1.5 mw Vensys v77wattswindproject.com/

For-profit company or co-operative, set up to raise/invest capital

Active Business Income

Tax credit of 35% [$50,000/ $17,500]

Rollovers / Adjusted Cost Base

Carryback (3 yrs.)/ forward (7 yrs.)

www.ccwf.ca

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Will People Invest in this venture?

Now 48 CEDIFs:• Manage than $40 million in assets • more than 5,000 individual investor’s• 9 Funds paying dividends annually• Tax credits – financial incentives

• Community owned and controlled

* Blind Pools raise capital to invest into business in the community but do not know the investments prior to raising capital

vs. Funds which invest into one business

Potential CEDIF Opportunities

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8 Lessons Learned

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Closing Comments

• CEDIF-> unique to Nova Scotia but not much longer– Prince Edward Island launched its program this July– New Brunswick– Alberta

• Getting through the process is not quick or easy…nor should it be• Understand the CEDIF program, rules, requirements, and nuances• Partnerships very important; community buy-in• Identified financing gap at $100,000 to $1,000,000; capital needs

outside this range may be better served by other tools

New Social Enterprise Fund- partner with local Credit Unions to deliver access to capital; up to $2 million pilot program

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“CEDIF is a wonderful and innovative community investment tool”

Chris Payne, MBA, CMANova Scotia Economic Development

(tel) 902-424-1259(cell) 902-430-6469

Email: [email protected]: www.gov.ns.ca/econ/cedif