The BC Chamber agreed wholeheartedly with two policies submitted by the Columbia Valley Chamber of Commerce at their recent Annual General Meeting (AGM) in Victoria, BC.
The local Chamber of Commerce sends representatives each year to the AGM. However, this was the first year they have submitted resolutions to the assembly.
“We were anticipating that we would be successful,” shared Susan Clovechok, executive director of the Columbia Valley Chamber of Commerce.
The policies were first submitted to a policy review committee, which helped hone them to be clear and concise, and to answer questions raised in the process. So the local members walked in feeling fairly confident the motions would pass. Mrs. Clovechok even advocated for the motions during the AGM, attending small group sessions to ensure the 220 delegates had any questions answered prior to the vote.
“Once we had made all the changes and the policy review committee recommended, we were confident the policies would be successful,” shares Mrs. Clovechok.
The focus of both policies is on enabling local investment in the province. The first policy proposed amendments to an existing securities law, which would make it easier for co-operative corporations in B.C. to raise capital from their members. This would directly benefit a new type of co-operatives in BC, the Investment Co-op, whose purpose is to direct new, or pre-existing, investment capital from local residents into local ventures with community impact. The second policy was a recommendation to create a deliberate Local Investment program and corporation for B.C., similar to the Nova Scotia Community Economic Development Investment Fund. These models come with an attractive tax credit, to encourage residents to keep money circulating in their own province.
“Investment models enable residents to invest in their own communities rather than stock markets,” explains Eden Yesh, a leading practitioner and advocate for investment co-ops and branch manager of Kootenay Employment Services Invermere (KES). “A co-op’s sole purpose is to help local businesses start up and expand with mentorship and financing from the members.”
He says while investment tools have been around for a while in other provinces, the Investment Co-op model in B.C. is still quite new. Mr. Yesh helped establish the first rural investment co-operative in Creston, which was incorporated on December 30th 2016, with 107 founding members submitting incorporation documents to the BC registrar. In the first two months of 2017, Creston’s Investment Co-raised more than $300,000 from their members and have it pooled in the community’s Credit Union.
“Kootenay Employment Services for the past three years has developed significant local investing capacity and networks around the province and country,” shares Mr. Yesh.
On Wednesday, May 31, KES submitted a proposal to the Rural Dividend program of British Columbia to hold Community Investment presentation in up to six Kootenay communities and help replicate the Creston model in two other Kootenay communities by the end of 2018.
Back in January, KES hosted a community investment discussion at Circle Café in Invermere. Mr. Yesh reports there were more than 60 people who came out to hear about the concept. He has also had great support from the local Chamber of Commerce when entertaining discussions about establishing an Investment Co-op for the Columbia Valley.
“We’ve had a lot of support letters from the Columbia Valley including local government representatives, First Nations, the Chamber of Commerce and the Community Foundation,” Yesh lists.
The latest support from the Chamber came in presenting these two policies to the B.C. Chamber AGM. The Columbia Valley Chamber of Commerce policies address improving capital raising exemptions for B.C. Co-operatives, removing restrictions and mobilizing rural investment capital.
“Right now if you have an Investment Co-op, you can only have sell investment shares to 150 members, and members can only invest $5,000 maximum into the Co-op – ever,” explains Mrs. Clovechok. “It’s really limiting.”
In the policy document, the Columbia Valley chamber states, “Loosening the red tape would permit investors to make the choice to invest their own funds in their communities.”
While the $5,000 limit per investor was intended to limit risk, that number has not been changed since 2001 even though other financial indicators have increased significantly.
“The administrative costs associated with small investment amounts are inefficient and frustrating. A higher limit would not significantly increase investor risk,” states the report.
They also want to shorten the time requirement for when an investor is allowed to buy investment shares.
The second resolution addresses the difficulty businesses often find in accessing financing in rural communities. In multiple Business Retention & Expansion studies, coordinated by the Columbia Basis Rural Development Institute, they found ‘access to financing’ was a leading barrier to business expansion in our region. Mrs. Clovechok says when the Chamber did their business walk in the fall of 2015, they heard the issue of access to funding brought up by many business owners.
“We have businesses in our community that are really poised to grow. And sometimes if you can’t grow you end up atrophying,” says Mrs. Clovechok. “We have businesses ready to go to the next level; they need funding and support from their community members.”
She says the Chamber sees many advantages to having a local investment co-op, and remarks, “It takes ‘buy local’ to a whole new level!”