Community Economic Development Investment Funds (CEDIF)
What is a CEDIF?
A CEDIF is a pool of capital, formed through the sale of shares (or units),
to persons within a defined community, created to operate or invest in
local business. It cannot be charitable, non-taxable, or not-for-profit,
and must have at least six directors elected from their defined community.
Share or Units. An investment fund is an entity that offers its shares or units to
various investors so as to provide a cost-effective means of obtaining
diversified investments. Income is earned primarily through interest,
dividends and capital gains. In recent years, the growth of financial
assets has skyrocketed. It is estimated that more than one-third of
Canadian households now own mutual funds.
Mutual Funds & RRSPs. Unfortunately for Nova Scotia, these funds draw far more capital from
the region than is ever re-invested locally. Statistics Canada data
indicates that approximately $600 million was contributed to RRSPs by
Nova Scotia taxpayers, however, less than two per cent of that is
estimated to have been re-invested in the Province. This is a problem
for communities in two ways: first, it is often difficult to attract
venture capital to invest away from their home location, and second,
each investment dollar spent in a community circulates through the
economy creating a beneficial ripple effect. Most of our investment
dollars are benefiting the Ontario economy (through the TSE).
CEDIFS Aims for Investment in Nova Scotia. Through the facilitation of the
formation of CEDIFs, we aim to increase the amount of capital
reinvested in Nova Scotia to 5% by the end of the year 2010. Having
local capital available for investment will reduce the size of the
financing hurdle for local entrepreneurs, thereby increasing the number
of projects undertaken. Further, people within these communities will
start to think more as entrepreneurs and may be more comfortable
establishing a commercial venture.
Benefits of Buying Shares in a CEDIF
For more information on CEDIF visit their website or download their brochure, click on the links below:
- 35 percent tax credit available under the Equity Tax Credit.
- Pre-approved holding status for a self-directed RRSP.
Funds Brocure 2010
Modified Extract from CEDIF Website.