Montréal, May 14, 2013 – With the federal government planning to gradually eliminate the tax credit for investments in labour-sponsored funds made up of the Fonds de solidarité FTQ and the Fondaction CSN, the Board of Trade of Metropolitan Montreal published its Report on the Importance of Labour-Sponsored Funds to the Economy of Metropolitan Montréal today.
“After the 2013-2014 federal budget was tabled, the Board of Trade voiced its concern about the government’s decision to eliminate the tax credit for labour-sponsored funds,” says Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal. “It became crucial to study the numbers and gain a clear understanding of the weight of the Fonds de solidarité FTQ and the Fondaction CSN in our economy. In light of this analysis, we have concluded that the federal government must review its decision; it needs to understand that our economy draws enormous benefit from the efforts of these two pillars of our financial ecosystem.”
The report establishes that, as investors, the labour-sponsored funds help create a dynamic venture capital and growth environment for the economy, one that is able to meet the needs of the market and entrepreneurs in Montréal and Quebec. “Whether directly or through specialized funds, labour-sponsored funds invest throughout the business life cycle: from start-up to maturity,” Mr. Leblanc says. “They support the start-up and development of innovative businesses and the creation of tens of thousands of well-paid jobs every year.”
“The contribution of labour-sponsored funds is invaluable for our economy,” Michel Leblanc says. “These funds make long-term investments in small and medium-sized businesses in sectors that tend to be less well served by private funds. What’s remarkable is that their investments are countercyclical, because they maintain a high level of investment during economic slowdowns. Plus, the return on investment for the federal government is amply recouped, whether in terms of tax and quasi-tax revenue or recovery time.”
“Over $2.3 billion is currently invested directly in companies in the Montréal metropolitan area,” Mr. Leblanc says. “And given their investments through specialized funds, labour-sponsored funds have helped create or maintain more than 35,000 jobs in the city. Not to mention the leverage effect that these funds have on private funds.”
The report also addresses the issue of savings, showing that thanks to these tax credits, labour-sponsored funds offer more than 700,000 shareholders of the Fonds de solidarité FTQ and the Fondaction CSN access to savings. “A good number of shareholders in these funds save more regularly and diversify their sources of retirement savings, behaviour that has to be encouraged given the demographic challenge facing Quebec as a whole and the low savings rate among Quebecers,” Mr. Leblanc says.
You can consult the report by clicking here.
About the Board of Trade of Metropolitan Montreal
The Board of Trade of Metropolitan Montreal is made up of some 7,000 members. Its mission is to represent the interests of the business community of Greater Montréal and to provide individuals, merchants, and local businesses of all sizes with a variety of specialized services to help them achieve their full potential in terms of innovation, productivity, and competitiveness. The Board of Trade is Quebec's leading private economic development organization.
Advisor, Media Relations
Board of Trade of Metropolitan Montreal
Tel.: 514 871-4000, ext. 4015
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