Eliminating the labour-fund tax credit upsets balance of financial ecosystem

Labour funds have a major impact on the Quebec economy and its financial ecosystem. Not only do they encourage workers to save for retirement, they help local businesses get ahead. For example, the money collected from the Fonds de solidarité’s more than 600,000 shareholders is invested in thousands of Quebec companies, enabling them to grow, modernize their equipment and venture into new markets. Some of these funds are also channelled into real estate projects that include affordable housing.

Besides offering patient capital, labour funds provide unsecured venture capital, complementing the financing available from banks, other financial institutions and private funds. This unique model has a proven track record. It is profitable for shareholders, the governments — which quickly recover the cost of the tax credits — and for business owners and their employees. It has also provided a stimulus to many sectors, including forestry, mining, aerospace, arts and culture, biotechnology, telecommunications, technology, services, real estate and affordable housing.

The last federal budget calls for phasing out the 15 per cent tax credit granted to labour fund shareholders. Eliminating this credit will upset the balance of Quebec’s financial ecosystem. We ask Finance Minister Jim Flaherty, on behalf of the 2,000 partner companies of the Fonds de solidarité FTQ, to reconsider his decision.

Jonathan Wener Chairman of the board and chief executive officer Canderel , Montreal

Philippe Hoste Chief executive officer Sonaca, Montreal

Phyllis Lambert Founding director Canadian Centre for Architecture President Fonds d’investissement de Montréal