|
Province registers labour-sponsored venture capital fund The Government of Newfoundland and Labrador announced today that a labour-sponsored venture capital fund has been registered to operate in the province. Innovation, Trade and Rural Development Minister Kathy Dunderdale made the announcement at a news conference with Rick Comerford, acting vice-president, Atlantic Canada Opportunities Agency, Newfoundland and Labrador (ACOA); Tom Hayes, president and CEO, GrowthWorks Atlantic Venture Fund; Reg Anstey, president of the Newfoundland and Labrador Federation of Labour; and Marilyn Thompson, chair, Newfoundland and Labrador Business Caucus. "Government made a commitment in the Blueprint to improve tax incentives to attract long-term venture capital investments in small and medium-sized enterprises. The GrowthWorks Atlantic Venture Fund will be a new source of venture capital for growing small and medium-sized enterprises in Newfoundland and Labrador, particularly in new emerging areas of the economy for enterprises that have good growth potential," said Minister Dunderdale. Investors in the fund will receive a provincial personal income tax credit of 15 per cent, to a maximum of $750 (for individuals investing in January and February of this year, the provincial tax credit can only be applied for the 2005 taxation year). Investors can also avail of a 15 per cent federal tax credit and the investment may be RRSP eligible. This is long-term patient capital to help local businesses grow and develop the provincial economy. "This fund will provide a new source of venture capital and improve the accessibility to investment capital for innovative entrepreneurs throughout Newfoundland and Labrador and Atlantic Canada," said Joseph McGuire, Minister for ACOA, who was not able to attend, but commented on this initiative. "Last November, I was delighted to announce a $10 million ACOA loan to GrowthWorks to establish a pan-Atlantic labour-sponsored venture capital fund. This was consistent with our government�s Speech from the Throne and our commitment to build a strong economy in all regions of the country." "GrowthWorks is extremely excited to be expanding our operations to Newfoundland and Labrador," said Mr. Hayes. "We see great opportunities to support entrepreneurs in this province. Our capital and advice in combination with their innovative ideas should result in opportunities to create a number of great new companies and help to diversify the provincial economy. We commend both levels of government and the Newfoundland and Labrador Federation of Labour for supporting this important economic development initiative." Under the new Labour-sponsored Venture Capital Tax Credit Act, GrowthWorks must maintain a permanent office in the province and employ a locally resident, full-time manager. A separate investment committee, with the majority of its members being residents of Newfoundland and Labrador, must be established with authority to approve investments. GrowthWorks Atlantic Venture Fund must invest at least 75 per cent of its locally-raised capital in the Province of Newfoundland and Labrador. "Labour has a major role to play in the economic development of our province, and we see this initiative becoming very successful in contributing to the diversification of our economy and providing increased employment opportunities for Newfoundlanders and Labradorians. The Newfoundland and Labrador Federation of Labour looks forward to participating in other similar collaborative opportunities that will move our province forward," said Mr. Anstey. "Venture capital funds invest in promising companies that demonstrate potential for future profit, but often are not yet profitable. These funds provide emerging enterprises with capital and an investment in the talent and technologies of today that will become the leading companies of tomorrow," said Dr. Thompson. "We congratulate our labour partners for taking a leadership role in this initiative." Investors that buy shares in the fund must hold the shares for a minimum of eight years in order to maintain tax credits. While the fund is registered with the Government of Newfoundland and Labrador, government does not guarantee funds invested in shares issued under the program. Labour-sponsored venture capital corporations (LSVCCs) are investment companies sponsored by unions to create jobs and help industries expand. Forty per cent of Canada�s venture capital comes from LSVCCs. Because venture capital investments entail a degree of risk, governments provide tax credits to offset the risk. Media contact:
About GrowthWorks* GrowthWorks (www.growthworks.ca) is a recognized leader in venture capital fund management with proven experience in the raising and managing of capital. GrowthWorksTM managed funds, including the Working Opportunity Fund, GrowthWorks Canadian Fund, GrowthWorks Commercialization Fund, and GrowthWorks Atlantic Venture Fund, have a combined $700 million in assets. GrowthWorks has a team of skilled and knowledgeable investment professionals with a combined 200 years of experience. The investment team has a proven track record of identifying, analyzing, and structuring investments in emerging sectors. GrowthWorks is a registered trademark of GrowthWorks Capital Ltd.
2005 01 19 10:40 a.m. |
|||||
|
|||||
