Introduction

The Canadian labour-sponsored investment fund concept has been around for twelve years now. For many observers (and particularly those outside of Québec), it seems like a more recent phenomenon that was unmistakable, at least, since 1990 when there began a steady and unabated proliferation in the number of funds. Actually, by the middle of 1995, labour-sponsored funds — also known in legal terms as labour-sponsored venture capital corporations — existed or were emerging in virtually all parts of Canada. Indeed, in June of 1995, as many as eighteen funds were either:

1. fully or near fully established, meaning that they have been raising capital, making investments, and developing programs for at least two years. This includes the (FTQ), inc., the national Working Ventures Canadian Fund, Inc., the Working Opportunity Fund (EVCC), Ltd., and the Crocus Investment Fund, Inc., of Manitoba. These funds are referred to periodically in subsequent pages as the “leading funds”;
2. in an early phase of institutional development, meaning they had just begun raising capital and making investments in 1994. This includes the Integrated Growth Fund, Inc., and the DGC Entertainment Ventures Corporation, Inc., both of Ontario, or;
3. in a phase of institutional start-up, meaning they are currently embarking on initial capitalization, etc., in 1995. This includes a total of twelve registered funds, eleven of which reside in Ontario — including Capital Alliance Ventures, Inc., the Canadian Medical Discoveries Fund, Inc., the First Ontario Labour-sponsored Investment Fund, Ltd., and the Vengrowth Investment Fund, Inc., — and one in New Brunswick, the Workers Investment Fund, Inc.

Today, only two provinces — Alberta and Newfoundland — have not introduced legislative frameworks to create and direct one or more labour-sponsored funds, assisted by federal and provincial tax and spending subsidies. Figure 1 identifies each of the eighteen funds, their official labour sponsors, and corresponding statutes, by jurisdiction. Additional fund inceptions are anticipated for 1996, situated chiefly in Ontario.

At the end of 1994, over 281,700 individual Canadians owned shares in six labour- sponsored funds. The net asset size of these funds, in aggregate, was $1.3 billion. By the end of the second quarter of 1995, this statistical profile had already changed markedly. Following sales associated with the season for contributions to registered retirement savings funds (RRSP’s), close to 378,600 Canadians (over 60 percent of whom live in Québec) owned shares in fourteen funds. And by the year`s end, the net asset size of the funds, in aggregate, rose to just over $2.0 billion.