Taxpayers to directly fund economic development
Development funds provide 35 per cent tax break
Prince Edward Islanders will, in the coming weeks, get their first taste of tax breaks through investments in local Community Economic Development Funds.
Based on a model that has raised more than $50 million for businesses in Nova Scotia since 1999, the CEDFs provide a 35 per cent credit on P.E.I. income tax for investment in government-approved ventures.
The P.E.I. Co-op Council has been encouraging individuals, businesses and communities with economic development ideas to raise capital this way.
"People identify a great project or someone that is currently had to leave to find employment that maybe has a great idea that they want to start a business back on Prince Edward Island," said Council fund officer David Tingley.
"Who knows what can happen if we can ignite some spark in local communities here on Prince Edward Island?"
The first CEDF, PEI Farm Works, is expected to launch in a few weeks.
The PEI Bio-Heat Investment Fund, started by Atlantic BioHeat, won't be far behind. Fund consultant Mathieu Arsenault said PEI BioHeat wants to raise $300,000 to help fund an expansion of wood-chip burning boilers at provincial buildings.
Arsenault said the fund is a way to keep Islander's money at home.
"We would prefer to spread the wealth and give what we would give to the bank to Island investors," he said.
"Also I think it's a question of empowering people. A lot of the time people feel that they don't have control over the economic development, for instance. So this is one way that they can directly say 'OK, this is the type of economic development that I want.'"
The Department of Finance and PEI Securities Commission has to approve all Community Economic Development Fund offers, and strict reporting rules must be followed.
Tingley hopes eventually four to five million dollars a year will be generated on P.E.I. for new projects.
For mobile device users: Would you be interested in investing in a Community Economic Development Fund on P.E.I.?