Montréal, June 4, 2014 – The capping of labour fund shares announced in the 2014-2015 Québec Budget will reduce the ability of the Fonds de solidarité FTQ to help SMEs, particularly in the regions. The Fonds de solidarité currently finances close to 2,400 partner companies, mainly SMEs, of which 80% have fewer than 100 employees and 70% are in the regions, outside major urban centres. Over the 10-year period ending May 31, 2013, the Fonds committed close to $5.5 billion in investments. The cap will also reduce Québec workers’ capacity to save for retirement.
“By proposing to cap the number of shares that can be issued, the government is reducing the Fonds de solidarité FTQ’s ability to invest in SMEs. Considering the government’s objectives for job creation, economic development and SME support, this proposal is surprising, particularly since all the parties in the National Assembly reaffirmed their endorsement of labour funds in March 2013 and that this was never mentioned during the election campaign. Further, the government itself recognizes in the budget that ‘tax-advantaged funds are essential tools in the financing chain’ ” said the Fonds de solidarité FTQ’s Chair of the Board, Robert Parizeau.
The Fonds will make the necessary representations to get the government to ensure that it remains in a position to continue its economic development and retirement planning mandates. It will be recalled that in the aftermath of the 2013 federal budget, over 110,000 Québec workers and more than 200 businesses and organizations came out in support of labour funds, sending petitions, emails and briefs to the Department of Finance.
The tax credits totalling 30 % remain unchanged for the 2014 fiscal year. Further, the cap will have no effect whatsoever on the return offered by Fonds shares, nor on the Fonds’ capacity to buy back shares. It will be recalled that according to a Secor study made public in 2010, the tax and incidental tax revenue associated with the investments made by the Fonds de solidarité allow the Québec government to recover the cost of the tax credit in as little as 2.1 years.
On another front, the Government of Québec’s proposal concerning the Fonds’ governance is another step that will allow the labour-sponsored fund to continue putting in place other elements of its new governance following the nomination of an independent Chair of the Board and the creation of the Governance and Ethics Committee and the Human Ressources Committee. The quick adoption of the bill will allow for the definitive implementation of these measures.
About the Fonds de solidarité FTQ
The Fonds de solidarité FTQ helps drive our economy. With net assets of $9.7 billion as of November 30, 2013, the Fonds is a development capital investment fund that channels the savings of Quebecers into investments in all sectors of the economy to help further Québec's economic growth. Its investments, in all sectors of the economy, contribute to the creation and maintenance of businesses and development in Quebec. The Fonds is a partner, either directly or through its network members, in close to 2,400 companies. With its more than 615,000 owner-shareholders, it has helped, on its own or with other financial partners, to create, maintain and protect more than 170,000 jobs. For more information, visit www.FondsFTQ.com.
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Information for media representatives only:
Patrick McQuilken
Senior Advisor, Media Relations and Communications
Fonds de solidarité FTQ
Phone: 514 850-4835
Mobile: 514 703-5587
Email: pmcquilken@fondsftq.com
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