by Janet Wallace
“Buy Local.” It’s a common yet valuable message. It’s easy to see the advantage of supporting local businesses, particularly in rural Albert County. When we buy goods or services from small businesses in our area, we help provide income not just for those entrepreneurs, but also employment for their staff (possibly our neighbours) and help keep local services available in our community.
“Buy Local.” It’s a common yet valuable message. It’s easy to see the advantage of supporting local businesses, particularly in rural Albert County. When we buy goods or services from small businesses in our area, we help provide income not just for those entrepreneurs, but also employment for their staff (possibly our neighbours) and help keep local services available in our community.
How can you do more than just buying local?
Consider investing in local businesses. This can not only help a business thrive but perhaps expand to offer more goods and services, or extend its season. In rural Albert and rural Westmorland Counties, we have a new opportunity to support local businesses - by investing in the Grass Roots Community Economic Development
Co-operative (CEDC).
What is a Community Economic Development Co-operative?
According to the Grass Roots CEDC website, a Community Economic Development Co-operative (CEDC) “is a pool of money raised by selling shares to individuals in a defined community." Funds are controlled by a group of direc- tors, selected from within the membership, at an annual general meeting.
Right now, Grass Roots CEDC is working to reach its goal of raising at least $150,000. Once funds are raised, the Co-op will invite small businesses to apply for financing. The Investment Selection Committee will review applications based on the established criteria.
A recent economic impact study showed that CED investment funds not only have a huge impact on the growth and development of the businesses they invest in, but also generate significant spin-off benefits. For example, if financing enables a restaurant to remain open for three months longer than usual, the result will be more income going back into the community in terms of more employment for workers and more purchases from local farms, bakeries, and other suppliers.
Grass Roots needs to raise $150,000 in order to move forward. To help understand why local residents might want to invest in the CEDC, I contacted Joanne Butland, one of the board members.
Joanne has deep roots in rural Albert County. Born and raised here, she has children (including a couple successful entrepreneurs) and grandchildren in the area. Joanne describes herself as “semi-retired, self-employed.” For most of her working life, she has been self-employed in the fishing industry. Joanne's concern for her community is the reason she volunteers to be on Grass Root's board of directors and why she hopes other people will invest in the CEDC.
According to the website, Grass Roots CEDC intends to "invest in the start-up, growth and expansion of viable businesses in rural communities of Westmorland and Albert counties that: create and maintain well-paying permanent jobs have a strong business plan and a demonstrated market for their products/services are innovative, seek to develop new products and services, or reduce reliance on imports are committed to ethical business practices contribute to building the local economy"
Why invest in Grass Roots?
“Small businesses are key to our community,” Joanne says. “We need to give them whatever support we can to help them succeed. They often need financial partners to back them in order to pursue their businesses’ potential.”
Capital investment from Grass Roots can help “all types of ethical businesses that will create reasonable long-term employment,” she adds. In particular, with financing from Grass Roots, “young entrepreneurs can really make their business plans work.”
“A lot of people have investments and have no idea where their money is invested,” Joanne mentions. She wants to put her money into ethical investments, some- thing that gives back to the community or is good for the environment and society, but has had trouble finding these...until now.
“We’re all stewards of our environment and community,” Joanne says. “Giving back for me provides purpose and a way to express my appreciation for where I live.”
While investing in Grass Roots has many social benefits, there is also a great tax incentive. As stated on the website, “New Brunswickers who invest in a CEDC receive up to 50% of their investment back (to a maxi- mum of $125,000 per year) through a non-refundable provincial income tax credit. Investors must leave their investments in the CEDC for four years to receive the total tax credit.”
In simple terms, Joanne explains that for every $1000 you invest in Grass Roots, your tax bill can be reduced by $500. Moreover, the money can be put into an RRSP or TFSA, which has other tax benefits. If all goes well, you will also generate income on your investment.
But, Joanne states upfront, it is a risky investment. Many applicants might not qualify for regular financing, like that from banks. There is no guarantee that you will get any return on your shares or even get your money back if businesses fail. That said, Joanne adds that a similar model in Nova Scotia, called FarmWorks, has been “very successful in terms of economic return to the community, as well as to investors; it’s a win-win.”
“We can’t always be looking to the government for money,” she continues. “Hopefully this will bring more investment by bringing more pride. You feel pride in that you help develop a business, and we think that you’ll be more likely to buy from it.”
Where to go from here
If you’re interested in learning more or investing, you can visit www.grassroots.coop. You can also talk to the Investment Coordinator, Alaina Lockhart, or one of the board members, including the president, Wendy Keats (Wendy.Keats@grassroots.coop), and local board members Joanne Butland from Riverside-Albert or Kevin Bulmer from Alma.
“Invest in the place that you love,” concludes Joanne. “This could really be a win-win for rural Albert County."
Consider investing in local businesses. This can not only help a business thrive but perhaps expand to offer more goods and services, or extend its season. In rural Albert and rural Westmorland Counties, we have a new opportunity to support local businesses - by investing in the Grass Roots Community Economic Development
Co-operative (CEDC).
What is a Community Economic Development Co-operative?
According to the Grass Roots CEDC website, a Community Economic Development Co-operative (CEDC) “is a pool of money raised by selling shares to individuals in a defined community." Funds are controlled by a group of direc- tors, selected from within the membership, at an annual general meeting.
Right now, Grass Roots CEDC is working to reach its goal of raising at least $150,000. Once funds are raised, the Co-op will invite small businesses to apply for financing. The Investment Selection Committee will review applications based on the established criteria.
A recent economic impact study showed that CED investment funds not only have a huge impact on the growth and development of the businesses they invest in, but also generate significant spin-off benefits. For example, if financing enables a restaurant to remain open for three months longer than usual, the result will be more income going back into the community in terms of more employment for workers and more purchases from local farms, bakeries, and other suppliers.
Grass Roots needs to raise $150,000 in order to move forward. To help understand why local residents might want to invest in the CEDC, I contacted Joanne Butland, one of the board members.
Joanne has deep roots in rural Albert County. Born and raised here, she has children (including a couple successful entrepreneurs) and grandchildren in the area. Joanne describes herself as “semi-retired, self-employed.” For most of her working life, she has been self-employed in the fishing industry. Joanne's concern for her community is the reason she volunteers to be on Grass Root's board of directors and why she hopes other people will invest in the CEDC.
According to the website, Grass Roots CEDC intends to "invest in the start-up, growth and expansion of viable businesses in rural communities of Westmorland and Albert counties that: create and maintain well-paying permanent jobs have a strong business plan and a demonstrated market for their products/services are innovative, seek to develop new products and services, or reduce reliance on imports are committed to ethical business practices contribute to building the local economy"
Why invest in Grass Roots?
“Small businesses are key to our community,” Joanne says. “We need to give them whatever support we can to help them succeed. They often need financial partners to back them in order to pursue their businesses’ potential.”
Capital investment from Grass Roots can help “all types of ethical businesses that will create reasonable long-term employment,” she adds. In particular, with financing from Grass Roots, “young entrepreneurs can really make their business plans work.”
“A lot of people have investments and have no idea where their money is invested,” Joanne mentions. She wants to put her money into ethical investments, some- thing that gives back to the community or is good for the environment and society, but has had trouble finding these...until now.
“We’re all stewards of our environment and community,” Joanne says. “Giving back for me provides purpose and a way to express my appreciation for where I live.”
While investing in Grass Roots has many social benefits, there is also a great tax incentive. As stated on the website, “New Brunswickers who invest in a CEDC receive up to 50% of their investment back (to a maxi- mum of $125,000 per year) through a non-refundable provincial income tax credit. Investors must leave their investments in the CEDC for four years to receive the total tax credit.”
In simple terms, Joanne explains that for every $1000 you invest in Grass Roots, your tax bill can be reduced by $500. Moreover, the money can be put into an RRSP or TFSA, which has other tax benefits. If all goes well, you will also generate income on your investment.
But, Joanne states upfront, it is a risky investment. Many applicants might not qualify for regular financing, like that from banks. There is no guarantee that you will get any return on your shares or even get your money back if businesses fail. That said, Joanne adds that a similar model in Nova Scotia, called FarmWorks, has been “very successful in terms of economic return to the community, as well as to investors; it’s a win-win.”
“We can’t always be looking to the government for money,” she continues. “Hopefully this will bring more investment by bringing more pride. You feel pride in that you help develop a business, and we think that you’ll be more likely to buy from it.”
Where to go from here
If you’re interested in learning more or investing, you can visit www.grassroots.coop. You can also talk to the Investment Coordinator, Alaina Lockhart, or one of the board members, including the president, Wendy Keats (Wendy.Keats@grassroots.coop), and local board members Joanne Butland from Riverside-Albert or Kevin Bulmer from Alma.
“Invest in the place that you love,” concludes Joanne. “This could really be a win-win for rural Albert County."
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