Download D6_02-CEDIF

International Forum on the Social
and Solidarity Economy
Q: The Basics…what is a CEDIF?
A: Access to “patient” Capital
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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)
8/3/2017
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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.
8/3/2017
Marigold Cultural Centre, Truro
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www.ccwf.ca
Watts Wind Energy
1.5 mw Vensys v77
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.)
8/3/2017
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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
8/3/2017
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Potential CEDIF Opportunities
8/3/2017
Specific
Investment(s)
Blind Pool
Template Documents
Define Community
Partners
Directors
Pilot Example:
Development Team Examples:
•Just Us
•Unique
•Cranberries
•Watts Wind Energy
•BCA and New Dawn
•Baie Chedabucto
•Black Business
•Northeastern Community Investment Inc.
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8 Lessons Learned
Business Leadership
Requirements to Create
Expect the Unexpected
Successes & Failures
Additional Rounds of Financing
Market for Shares
• Board of Directors
• Defined community
• Min 5 directors; $100K; 25 investors
• Delays, unforeseen challenges
• NCII; Just Us; Marigold;
• Production Schoolhouse; 4Eversports
• Many CEDIF examples
• Just Us has done 7 offerings
• Liquidity- no market to sell shares
• The “right” investor(s)
IPO & Tax Issues
Valuation
8/3/2017
• Difficulty finding valuation for CEDIFs
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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
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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
8/3/2017
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“CEDIF is a wonderful and innovative
community investment tool”
Chris Payne, MBA, CMA
Nova Scotia Economic Development
(tel)
(cell)
Email:
Website:
8/3/2017
902-424-1259
902-430-6469
[email protected]
www.gov.ns.ca/econ/cedif
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