Working Ventures also illustrates the capital retention principle in action. In the beginning, the CFL proposed that a cost-effective national infrastructure (and diversified national investment portfolio) was the best option for ensuring long-lasting venture capital sub-markets outside of central Canada.Endnote 45 This is what Working Ventures currently does in Saskatchewan, Ontario, New Brunswick, Nova Scotia and Prince Edward Island through contracts with provincial governments whereby it agrees to reinvest a fixed proportion (e.g., 60 percent) of capital obtained there.
Furthermore, some provincially-based funds have determined specialized economic development mandates. For example, the Fonds de solidarité acts as a general engine of Québec economic growth by investing in all industries and sectors. Working Opportunity, on the other hand, acts more as a financial agent of economic and job diversification in British Columbia by supporting projects in industries distinct from traditional resource extraction, such as forest products and mining. Like Working Opportunity, the Crocus Fund aims to expand chiefly high value-added sectors - it does not, for instance, invest in agriculture and other natural resources - while also maintaining indigenous ownership of existing Manitoba businesses.
Labour-sponsored funds are also having an impact on economically-disadvantaged regions and communities within provinces. In 1988, the Fonds de solidarité began a network of decentralized local and regional funds which spread co-investment projects throughout Québec. Nine current regional funds were jointly initiated by the Fonds de solidarité and three other Québec-based institutions and are administered by regionally-based investors who share a financial stake as well. These funds make investments beginning at $50,000.
Over the next few years, the Fonds de solidarité will expand the number of regional funds by sixteen with an injection of $100 million.
Local funds were established in collaboration with the Union des municipalités régionales des comtés. One half of fund capital is supplied by a $10 million central pool (SOLIDEQ) of the Fonds de solidarité with the rest coming from the municipalities where they reside and other sources. Administration practices are the same as regional funds, but local funds target even smaller deals of between $5,000 and $50,000. Directors of the Fonds de solidarité hope to eventually install a fund in every Québec municipality (there are ninety-six in all) and at least fifty before the end of the decade.Endnote 46
Local and regional equity pools are innovative financial instruments. First of all, they retain capital for community economic development, but as was discussed earlier, they also lever capital into specific localities. In addition, decision-making at this level is fairly autonomous, since the Fonds de solidarité has only one voice in a group of co-investors. Criteria that are in keeping with the former's mandate are determined up-front in an investment agreement. With the advent of new regional funds, experimentation in further devolution of decision-making may take place.