Investing your money in Québec to make a positive impact
If buying local is important to the local economy, so is investing local. In the following article, we explain how local investments can benefit you and the province.
It's important that your investments suit your investor profile, financial objectives, and savings horizon. But the financial products you choose can also align with your personal values, not to mention have a positive impact on the economy and society. We spoke with four local specialists to help us understand what investing in Québec really means.
- Éric Desaulniers, General Manager, Fonds locaux de solidarité FTQ, S.E.C.
- Odrey Robillard, M.Sc., M.Env., Senior Advisor, Sustainable Development and Responsible Investment, Fonds de solidarité FTQ
- Rosalie Vendette, B.A.A., M.A., expert in sustainable finance at DecodESG
- Sébastien Lafontaine, B.A.A., Financial Planner and Mutual Fund Representative, FlexiFonds de solidarité FTQ
Respecting your values
When we choose to buy local, we want to know exactly where our money is going: does the product or service, company, or retailer align with our values? When it comes to investing locally, the same principle applies. Ask yourself whether the savings product, the intermediaries who manage your money, and the recipient of your investment align with your values.
For some, these values or beliefs are environmental protection, sustainable development, social involvement, or positive economic impacts for a neighbourhood, city, province, or country. Others might want to support the development of a specific activity sector that interests them. Ultimately, keeping your money local is one investment option among many, but it seems to be drawing attention.
"People tend to worry about the return on their investments and where their money is going. But the social and economic impacts are just as important," says Rosalie Vendette. "Every investment decision we make will have consequences, whether it's today or in the long term."
Odrey Robillard believes that, by reflecting on our values, we can determine our investor personality and make financial decisions that support our convictions.
"You have to choose your investments based on who you are. Make sure that you agree with the product's investment philosophy, goals, and results—and not only when it comes to returns," says Robillard.
Think about local investments like you do local purchasing
While there's been a growing awareness of buying local in Québec, saving and investing locally has been slower to catch on.
According to Vendette, it's mainly a question of tangibility. "Spending is a concrete gesture, whereas investing is about building the economy of tomorrow. While there are immediate benefits, a big part of investing locally is ensuring future economic spin-offs in Québec, and not elsewhere. That makes it less tangible, but no less important."
"Today's young people are asking questions about the environmental, social, and local implications of their investments, and they're more demanding than previous generations," says Vendette. "With generational transfer, young people will inherit and therefore take up more space on the financial market. Attitudes are changing. Now's a good time to develop sustainable consumption and investment habits," she says.
With arrival of local investments on the market, more transparency is required from the institutions and entities that manage savings products and vehicles in Québec and Canada.
"We need to get people to think about the consequences of their financial decisions," says Robillard. "Apart from return and risk, there are always environmental or social impacts that savers should consider. People seem more and more interested in their investments. It's only a matter of time before the market begins to better communicate the benefits of each product and offer greater transparency."
If you choose a local investment product that aligns with your values, will you make less money?
"Investing in Québec doesn't mean sacrificing your returns for the sake of your beliefs," says Sébastien Lafontaine. "Rather, it's a way to achieve your savings goals while creating social value."
Supporting and stimulating Québec's economy
By saving locally, you encourage local entrepreneurs and businesses. They might even be based nearby or employ your friends or family members. "It's much easier to identify with an organization we really know, that makes the products we consume every day and creates jobs throughout the province," says Éric Desaulniers. Supporting Québec's economic development by choosing local investment products means being part of a network of local culture. "It also affects entrepreneurs who are closer to their customers, markets, and investors," he says.
After being at the forefront of investments made in 86 regional county municipalities (RCMs) in Québec, Desaulniers can testify to the strength of such a network. "At Fonds locaux, we invest time, resources, and money in local economic development organizations that support local businesses. We're also the driving force behind many small and medium-sized businesses that actively participate in their region's economy and make Québec shine."
Being part of this economic cycle also pays off for the Québec investor. "By choosing to invest locally, we make sure that the money we earn stays here, in Québec," says Sébastien Lafontaine. It's a way of supporting the regional economic fabric.
Diversifying your investments
For Lafontaine, another advantage of investing locally is the diversification of your investment portfolio. "When you invest in the Canadian market as a whole, you invest primarily in resource and financial companies. By investing more specifically in Québec companies, you have access to the industrial and basic consumption sectors, among others." That's why he believes investing locally is a good way to diversify your investments. This is even more important when it comes to managing risk. "We're always looking for a good return, but we also have to limit the risk. Since each sector reacts differently to market fluctuations, investing in a mix of growth and defensive industries can help balance our portfolio," he says.
At the end of the day, investing locally is a win-win situation for businesses, the economy, and you. Looking to invest? Discover local savings products, ask questions, and learn about the positive effects your savings can have!