Community Fund to Grow Cranberry Industry

Nova Scotians have an opportunity this RRSP season to put their dollars into a homegrown venture and watch their investments flourish.

Developers of the West Nova Cranberry Venture Fund Ltd. have been holding public meetings across nine western counties this month to explain the purpose of the fund and to seek investors willing to support cultivation of a new cranberry industry. The venture capital fund is one of Nova Scotia's first community development corporations, launched under the Community Economic Development Investment Fund program.

"Investment funds like West Nova Cranberry are fundamental if Nova Scotians are to grow their communities from within," said Economic Development Minister Gordon Balser. "I commend the fund's developers for having the vision and taking the initiative to use this creative approach to tap into what could be considerable opportunities for developing a long-term sustainable industry in our province."

The developers of the fund are a group of Nova Scotians with a mix of agricultural, business and professional backgrounds who share a common belief that western Nova Scotia is prime cranberry-growing country. Several sites in the Annapolis Valley are already underway, and three peat sites on the South Shore have been approved for development.

Growing cranberries, however, requires a large initial investment. On average, it takes about five years for full production. The payoff for investors isn't likely to hit full potential until year seven, said Jeannie Cruikshank, regional vice-president of the Canadian Council of Grocery Distributors and a member of the fund's board of directors.

"However, patient capital does not mean a low return," she said. "We see investors as people like ourselves --those who would like to diversify their investment portfolios into a fund that has potential for above-average returns while at the same time investing in local Nova Scotia businesses and in the economic development of rural communities."

The West Nova Cranberry fund's goal is to attract between 25 and 40 investors willing to invest a minimum of $2,500. Shares are offered for sale until Feb. 29.

Investors in community economic development funds can qualify for tax advantages. Nova Scotians who buy shares receive a 30 per cent tax credit and can treat them as investments in self-directed RRSPs. In addition, the province guarantees the last 20 per cent of investments against loss for the first four years.

What this means is that, for example, a person in the 42 per cent tax bracket who invests $2,500 in the West Nova Cranberry fund will receive a tax credit of $750 and, if the investment is in an RRSP, a further possible tax benefit of $1,050. The province guarantees another $500 of the investment for four years. The tax credit, RRSP tax benefit and guarantee add up to $2,300 of the total $2,500 investment.

The province's Community Economic Development Investment Fund program was developed in part to encourage Nova Scotians to invest at home. Every year, residents invest more than $600 million in RRSPs. However, less than two per cent of that amount finds its way back into the province as reinvestments.

The West Nova Cranberry Venture Fund Ltd. is the third fund approved under the program. BCA Investment Co-operative Ltd. of Sydney was launched in November to raise up to $2 million to invest in Cape Breton, and Concrete Investments Ltd. of Windsor was approved in December to finance a local concrete company. More than 25 other groups are at varying stages of developing community investment funds.

The funds can be used to assist or develop businesses within the community. Investments must be in profit-making ventures, and cannot be made to charitable, non-taxable or not-for-profit organizations.

The West Nova Cranberry fund will hold its remaining meetings in:

• Halifax, Feb. 21, 7 p.m., Lord Nelson Hotel, South Park Street
• Digby, Feb. 22, 7 p.m., Digby Fire Hall, First Avenue
• Church Point, Feb. 23, 12:30 p.m., Jodrey Centre, Highway 1
• Yarmouth, Feb. 23, 7 p.m., South West Shore Development Authority, 368 Main St.
• Chester, Feb. 24, 7 p.m., 151 King St., Committee Room