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MESSAGE FROM THE CHAIRMAN OF THE BOARD AND THE PRESIDENT AND CEO

Trust

On the following pages you will find the overall results of the Fonds de solidarité FTQ for the latest financial year ended May 31, 2013. The Fonds generated a positive return for the ninth consecutive six-month period, despite still difficult and uncertain global economic conditions. We are therefore proud of our achievements, our return of 5.3% and our net earnings of $458 million. We were thereby able to increase the value of our shares to $27.98 as at July 5, 2013.

The Fonds: values first

For 30 years now, the Fonds de solidarité FTQ has significantly contributed to Québec’s economic development. Even before the notions of sustainable development and corporate social responsibility, which we fully adhere to, were created, the Fonds’ mission and activities were already built around economic and social concerns and priorities. The Fonds was founded on values of social and economic solidarity: promoting jobs, training workers, developing the Québec economy through strategic investments and helping workers adequately prepare for retirement.

In addition, since its creation, the Fonds has designed tools and adopted exceptional practices, such as the social audit and economic training for workers in the workplace, to thoroughly manage its investments and turn them into what is today called responsible investments. It created, trained and deployed an extensive network of local representatives (LRs) to represent it and promote retirement savings to workers in Québec companies.

This multi-faceted mission the Fonds adopted in 1983—which was an innovation at the time—was a significant challenge! And 30 years later, we are pleased to be able to say that we successfully met the challenge. This is why our 2,395 partner companies and our hundreds of thousands of shareholders appreciate the Fonds.

A major contribution to financing companies

During the last financial year, the Fonds invested a total of $521 million. Including its network of regional funds, the Fonds invested in 137 companies in more than 25 industries, including both technology and traditional industries.

The proportion of the Fonds de solidarité FTQ’s net assets that is committed in Québec companies in the form of unsecured investments—therefore at risk—exceeds 66%. The Fonds supports SMEs: it helps them grow and position themselves in their markets in an increasingly competitive and challenging international context.

The investments of the Fonds and its network have led to creating, maintaining or protecting 170,915 jobs in partner companies as at May 31, 2013.

From 2004 to 2013, the Fonds has committed $5.5 billion of unsecured risk capital to partner companies!

During the financial years 2004 to 2013, i.e. a 10-year period, the Fonds has committed $5.5 billion of unsecured risk capital (development capital) to partner companies. Of this amount, $2.2 billion have been invested in venture capital either directly in private companies ($1.2 billion) or indirectly in private funds ($1.0 billion) in Québec and Canada (see the chart). If we include the massive investments we have made in Québec companies over the 30 years the Fonds has been operating, the number of jobs created, maintained or protected would stand today at over half a million!

Grateful partners

Over the years, and especially in the last one, Québec entrepreneurs have told us how much they appreciate us. Many of them, from many regions of Québec, confirmed that without the Fonds’ support and trust, they would not have been able to face international competition. Many would not have been able to keep their decision-making centres in Québec, while others would probably no longer have been able to continue operating.

Thanks to the patient capital the Fonds provided these companies, often during economic downturns, thousands of workers were able to keep their jobs, and thousands of others were offered one.

Since the creation of the Fonds, the number of jobs created, maintained or protected would stand today at over half a million!

A major contribution to developing retirement savings

Where does the Fonds de solidarité FTQ get the money it invests in companies? Essentially, it comes from its shareholders’ savings. Over the last 30 years, the Fonds created the largest pool of retirement savings invested in private companies in Québec.

Most importantly, since the 1980s, when it was created, the Fonds has contributed to creating a better savings “culture” in Québec, the habit of regularly contributing to an RRSP among hundreds of thousands of workers.

Despite all this, there still remains a lot of progress to make on this front, and the Fonds is working at it every day. In fact, according to the Innovating for a Sustainable Retirement System Report (also called the D’Amours Report), written by a committee of experts at the request of the government of Québec, 1.9 million workers do not participate in any kind of group retirement plan, which represents 47% of all workers in Québec. Almost one in two Quebecers will therefore not have any income from a group retirement plan when they retire. That is very disturbing.

Therefore, based on this report, we need to “support workers in their efforts to save more for retirement.” And that’s exactly what the Fonds de solidarité FTQ does. Encouraging workers to save for their retirement is an integral part of our mission. The Fonds now has more than 615,000 shareholders and it is there for them, to convince them of the need for saving and to encourage them to set up individual retirement savings that will let them have decent living conditions when they retire.

Over the last 30 years, the Fonds created the largest pool of retirement savings invested in private companies in Québec.

A question of trust

If the Fonds de solidarité FTQ has reached the strategic size it has today, it is because it earned the trust of its shareholders, partner companies and financial partners.

This trust lets us support large sections of the Québec economy and encourage middle-class workers to save for retirement while contributing to Québec’s economic development.

We would like to thank our shareholders, partner companies and financial partners for the immense trust they have placed in us over the years. We would also like to thank the members of the Board of Directors and other governing bodies of the Fonds for their important contribution. A warm thank you also goes out to the employees of the Fonds and its network as well as to the LRs for their work and unwavering commitment to the Fonds’ mission.

Rest assured that we will continue to work competently and creatively to meet Quebecers’ expectations.

  • Michel Arsenault
  • Chairman of the Board of Directors
  • Yvon Bolduc
  • President and CEO