| Type | Company created by special legislation |
|---|---|
| Industry | Development capital Venture capital Business financing |
| Founded | June 23, 1983 |
| Headquarters | Montreal, Quebec, Canada |
| Area served | Quebec |
| Key people | Yvon Bolduc President & CEO |
| Products | Registered Retirement Savings Plan |
| Website | www.fondsftq.com |
The largest labour-sponsored fund in Canada, the Fonds de solidarité FTQ (“Fonds”) is a Québec development capital organization whose overriding mission is to invest in local businesses to further the economic development of all the regions of [[Québec].
Created by the Fédération des travailleurs et travailleuses du Québec (FTQ) – Québec’s biggest labour body, the Fonds de solidarité FTQ was created on June 23, 1983 through legislation enacted by the province’s National Assembly.
As of May 31, 2011, the Fonds held $8.2 billion in net assets, had 583,235 owner-shareholders, and had helped create, maintain and protect 160,789 jobs.[1]
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Headquartered in Montréal, the Fonds de solidarité FTQ has a network of independent organizations that includes the Fonds régionaux de solidarité FTQ [regional solidarity funds], the Fonds locaux de solidarité FTQ [local solidarity funds] and the Fonds immobilier de solidarité FTQ [real estate solidarity fund]. Its investment network also includes 80 specialty funds.
Found across all the regions of Québec, the 16 Fonds régionaux can make investments of up to $2 million.
Managed by the CLD (Centre local de développement) [local development centre], the 87 Fonds locaux make investments of up to $100,000 in partnership with the Fédération Québécoise des Municipalités.
The Fonds immobilier de solidarité FTQ invests in real estate projects.
The Fonds’ core mission is to further Québec’s economic growth by creating and protecting jobs through investments in local businesses across all sectors of the economy. Part of its mission is also to encourage its owner-shareholders to save for retirement and to provide them with a reasonable return, which is in addition to the tax benefits granted by the two levels of government.
The Fonds de solidarité FTQ was constituted on June 23, 1983 by an act of the Québec National Assembly, then headed by the Lévesque government. The Fonds’ objectives are to:
Most of the Fonds’ investments take the form of unsecured loans in Québec small and mid-sized enterprises (SME).
In keeping with its mission, the Fonds makes investments in all types of businesses, with or without a guarantee. However, in any given year, the proportion of unsecured investments in eligible companies must represent, on average, at least 60% of its average net assets of the previous year.
For the year ended May 31, 2011, the Fonds had invested $733 million in Québec companies. It is a partner, either directly or through one of its network members, in over 2,000 Québec businesses.
The only development capital organization with sector expertise, the Fonds invests in the most important sectors of the Québec economy.
As at May 31, 2011, the Fonds had $5.2 billion invested in 2,129 Québec companies. Since 1983, the organization has invested $9.8 billion.
The Fonds de solidarité FTQ specializes in 25 sectors of the Québec economy:
Fonds shares, which are eligible for the Registered Retirement Savings Plan (RRSP), can be purchased by any Québec taxpayer either through payroll deduction – available in unionized companies or government organizations (an FTQ-affiliated or other union), – preauthorized withdrawals, or a lump sum payment. Anyone can purchase Fonds shares.
In its 28-year history, the Fonds has sold $10.8 billion in shares.
The Fonds relies on a network of over 2,000 local representatives (LRs), unionized employees who promote the Fonds RRSP in their workplace.
Fonds shares are a popular investment because in addition to the tax benefits individuals obtain for buying an RRSP, they also receive two additional tax credits: 15% from each government (Québec and Canada) on the first $5,000 invested each year. Fonds shares can’t be sold before retirement except under certain conditions such as loss of employment, participation in the federal government’s Home Buyers’ Plan, and disability.
In June 2010, SECOR and Regional Data Corporation conducted a study on the economic impact of the Fonds’ investments in Québec SMEs. Taking into account only direct tax receipts (income and other taxes) collected as a result of these investments, the study showed that the provincial and federal governments recovered the tax credits granted to Fonds shareholders in 3.4 years. When parafiscal receipts (CSST, RAMQ, QPP, etc.) were factored in, the recovery period was 2.7 years.
The Fonds’ operations are overseen by a management committee composed of the President and CEO and five other executives. The governance framework is completed by various committees and boards.
The Fonds also has codes of ethics and professional conduct for its employees, executives and directors. Among other things, these codes are designed to avoid conflict of interest situations.
During its 2011 fiscal year, the Fonds adopted two new charters: the Board of Directors Charter and the Executive Committee Charter.