International Forum on the Social and Solidarity Economy

International Forum on the Social and Solidarity Economy

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 Port Hood Beach Sunrise RV Park Raise Capital- Close Offering- Make Investment (s) 3/18/2018 2

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. 3/18/2018 Marigold Cultural Centre, Truro 3

www. ccwf. ca Watts Wind Energy 1. 5 mw Vensys v 77 wattswindproject. 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. ) 3/18/2018 4

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 3/18/2018 5

Potential CEDIF Opportunities Specific Investment(s) Blind Pool Template Documents Define Community Partners Directors Pilot Example: • Just Us • Unique • Cranberries • Watts Wind Energy 3/18/2018 Development Team Examples: • BCA and New Dawn • Baie Chedabucto • Black Business • Northeastern Community Investment Inc. 6

8 Lessons Learned Business Leadership • Board of Directors Requirements to Create • Defined community • Min 5 directors; $100 K; 25 investors Expect the Unexpected • Delays, unforeseen challenges Successes & Failures Additional Rounds of Financing Market for Shares • NCII; Just Us; Marigold; • Production Schoolhouse; 4 Eversports • Many CEDIF examples • Just Us has done 7 offerings • Liquidity- no market to sell shares • The “right” investor(s) IPO & Tax Issues Valuation 3/18/2018 • Difficulty finding valuation for CEDIFs 7

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; 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 3/18/2018 8

“CEDIF is a wonderful and innovative community investment tool” Chris Payne, MBA, CMA Nova Scotia Economic Development (tel) (cell) Email: Website: 3/18/2018 902 -424 -1259 902 -430 -6469 paynecj@gov. ns. ca www. gov. ns. ca/econ/cedif 9