On October 18th, in a joint announcement with Momentum and Local Investing YYC, the Government of Alberta officially launched the Community Economic Development Corporation (CEDC) tax credit program. Going forward, Albertans who invest in a registered CEDC will receive a 30% tax credit.
What is a CEDC?
CEDCs are investment funds that make it easier for everyday Albertans to invest their money in local businesses. There are two types of CEDCs: Community Economic Development Investment Funds and Opportunity Development Cooperatives. Through the CEDC program, these funds and cooperatives pool capital from investors, and then invest this money in community businesses that are addressing social challenges or spurring rural economic development.
Local Investing YYC is a Calgary-based example of a CEDC. As an investment cooperative, Local Investing YYC will provide everyday investors the opportunity to direct their investments to support local businesses that are addressing a community need by delivering positive social or environmental impact in addition to profit.
Why are we so excited about them?
By creating CEDCs and the associated tax credit program, the Government of Alberta is connecting local entrepreneurs who need capital to grow and thrive with everyday Albertans wanting to see their investments have a direct impact in their communities. CEDCs provide vital access to capital for entrepreneurs who are committed to operating their businesses in a way that creates social or environmental benefit – for example by hiring individuals who face employment barriers, by building locally-sourced, sustainable supply chains, or creating new living wage jobs. In other provinces, this model has been used to help co-operative coffee roasters, wind farms and other renewable energy projects to achieve success.
Through our own Business Development and Micro Lending programs, Momentum invests directly in individuals looking to start their own businesses, and last year, our portfolio of businesses created 122 jobs. We know that Momentum graduates struggle to access capital to grow their businesses and are pleased to see the Government of Alberta introduce a tax-credit incentive to connect these local entrepreneurs with investment from everyday Albertans.
For more information on the CEDC tax credit program, visit this page.
Interested to know more about Momentum’s policy work in this area? Take a look at this report on local investing.
For more information on our Business Development programs, click here.