When he was in his 20s, Minister of Economic Development and Trade, Deron Bilous recalls sitting down with a financial advisor and struggling to find worthy investments that aligned with his values.
Now, with the introduction of the Community Economic Development Tax Credit (CEDC) by the Government of Alberta on October 18, 2018, Bilous is looking forward to seeing others invest in businesses they believe in.
The CEDC Tax Credit is unique to the Government of Alberta’s preceding tax credits in that it “targets for-profit businesses operating in the community economic development sphere,” says Bilous’ Press Secretary Jean-Marc Prevost.
“These businesses usually find it hard to access affordable capital that is required to help them expand and innovate.” The Government of Alberta has allocated an annual budget of $3 million for CEDCs over three years, with a 30% tax credit available to investors.
“The CEDC tax credit program enables investors to move money from Wall Street and Bay Street onto main streets and local businesses across Alberta,” said Barb Davies, co-founder of Local Investing YYC, at a press conference held at Momentum on October 18.
Local Investing YYC is an investment cooperative providing capital to local businesses generating social, environmental and financial returns. It is in the process of registering as a CEDC. Investment shares in the cooperative are RRSP and TFSA eligible.
CEDCs will create a symbiotic relationship for Alberta’s socially-minded entrepreneurs, communities, and investors. “Investors interested in both financial and social returns now have the opportunity to do so locally. Small locally-owned businesses that generate community economic development and social impact can get access to affordable capital to expand their business or start new ones,” says Prevost. Local communities will also be able to improve their business environment as local businesses launch and grow to meet the needs of the community.
To be eligible for investments through a CEDC, a for-profit business must have fewer than 100 employees, be permanently established in Alberta, and be actively engaged in “eligible community business activities.” This includes increasing access to consumer goods and services that improve the community on an economic or social level, or by employing and training citizens that are facing social challenges such as poverty.
“We want to show Albertans that you can have a financial return while investing in a business that has a social benefit,” Bilous says. “It’s very exciting, and I’m proud of the work that my department has done to deliver this to the community.”
• Read the press release from the Government of Alberta here.
• Click here to learn more about CEDCs.
• Check out Local Investing YYC for future updates on how you can invest in local businesses in Calgary creating sustainable change.