Cape Bretoners Give Back to Community
For investors like Joan Harriss, putting money in a community development fund is an old idea reborn to meet today's needs.
Neighbour helping neighbour was how businesses were started and expanded when she was growing up, said Mrs. Harriss, whose grandfather and father founded J.A. Young and Son of Sydney, a shipping and insurance enterprise. Mrs. Harriss was also active in business for more than 45 years.
"I know today is rough in Cape Breton; we've read the horror stories," she said in a recent interview. "A community fund is one way, in my opinion, that Cape Bretoners are going to pull themselves out of the hole -- by going into their back pocket."
Many others, it appears, share her opinion. In five months, to the end of the most recent RRSP-buying season, more than 200 Cape Breton residents -- including Mrs. Harriss -- had dug into their back pockets for $869,000 to invest in BCA Investment Co-operative Ltd.'s community development fund. The money -- almost 75 per cent above BCA Investment's initial $500,000 target -- will in turn be invested in Cape Breton businesses.
"I put money in that fund for the same reasons that my folks, and their friends, did long ago when their friends and neighbours needed help with a business venture," said Mrs. Harriss, 80. "It's about hope, about helping ourselves, and about giving back to the community."
Avvie Druker, chairman of the BCA fund campaign, said he's gratified by the confidence and support shown by investors.
"Despite economic uncertainty, Cape Bretoners saw merit in redirecting some of their retirement investments to support local enterprise and create employment," said Mr. Druker. "It's an example of the community's determination to forge a new beginning and recognition of the importance of locally based development."
Mr. Druker said the fund's board of directors is currently examining several investment opportunities. The volunteer board is made up of a dozen business, church and community leaders and others.
BCA Investment Co-operative's fund was launched under Nova Scotia's Community Economic Development Investment Fund program approved last fall. Nova Scotians who buy shares in a community economic development fund receive a 30 per cent tax credit and can treat the shares 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. Many investors in the BCA fund, for example, were eligible for up to $750 in tax credits on each $1,000 invested.
Two other community development funds successfully closed Feb. 29. Investments in the West Nova Cranberry Venture Fund Ltd. will be used to develop a cranberry industry in western Nova Scotia over the next several years. The Concrete Investments Ltd. fund supports plans by a Windsor company, Gordon Shaw Concrete Products, to expand and increase its product line.
"The developers and investors of these funds are to be congratulated not only for their effort in making them a success, but for their commitment to building their own communities," said Economic Development Minister Gordon Balser. "Communities know and understand their own economic needs and are in the best position to work toward fulfilling those needs. The provincial government knows this and sees itself in a supporting role by developing such programs as the community investment funds."
The Community Economic Development Investment Fund program was launched in part to encourage Nova Scotians to invest at home. Every year, residents invest more than $600 million in RRSPs, but less than two per cent finds its way back into Nova Scotia ventures.
The funds can be used to assist or develop businesses or industries within a community. Investment must be in profit-making ventures, and cannot be made in charitable, non-taxable or not-for-profit organizations. More than 25 groups across Nova Scotia are developing a community fund.
For Mrs. Harriss, this time-honoured spirit of co-operation may be the best way for many communities across the province to regain prosperity.
"This was how I was brought up."