What is a CEDIF?
HistoryIn 1993, the Province established the Nova Scotia Equity Tax Credit to encourage local residents to invest in Nova Scotia small businesses. As an incentive, the Province offered a personal tax credit of 30 per cent to encourage investors to participate. The Equity Tax Credit allows equity investment in corporations, co-operatives and community economic development initiatives. In the case of corporations, eligible investments must be newly-issued common voting shares without par value.
The success of the Equity Tax Credit led the Province to develop an enhancement to the program, Community Economic Development Investment Fund's (CEDIF's). In addition to the 30 per cent tax credit available under the Equity Tax Credit, investments in CEDIF corporations and co-operatives are:
- pre-approved holdings for a self-directed RRSP
- can attract investment through community solicitation
- assist, or develop local businesses within the community
The use of CEDIF is a new approach that will encourage the formation of capital pools throughout the many diverse regions of Nova Scotia. The tax credits and guarantees offered to investors in CEDIFs, under the Nova Scotia Equity Tax Credit program, should accelerate the pace at which communities develop and implement viable projects.