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New investment fund launched in support of Lunenburg's waterfront

by Robert Hirtle

 LUNENBURG - A new fund has been created that will give the public an opportunity to invest in the Lunenburg waterfront.

 The Covey Island Boatworks Investment Fund Ltd., developed under the provincial government's Community Economic Development Investment Fund (CEDIF), is designed to encourage Nova Scotians to invest in their home province.

 Covey Island general manager Al Hutchinson said that currently, less than two per cent of the $660 million Nova Scotians invest annually remains in the province.

 "Essentially, the way it works is, there are government incentives behind this program and there are equity tax credits made available through the province of 60 per cent based on various hold periods, and then they are RRSP eligible, as well," he explained. "In many cases, potential investors will recoup through the tax incentives a hundred per cent of their investment and then they'll be left with the shares and the distribution of earnings through dividends … that the company makes."

 Mr. Hutchinson said the program has been around for a few years, and a number of companies have taken advantage of it.

 "We're looking to raise some capital for Covey Island for our initiative here, in establishing a yard in Lunenburg," he said. "But after talking to the Lunenburg Waterfront Association and understanding their goals and their direction, we felt that this type of investment fund could also help other companies that want to establish or expand in Lunenburg."

 To that end, Mr. Hutchinson said Covey Island has "kind of opened it up and created a fund that could be targeted at different businesses, not just our own."

 Individuals purchasing shares, which will be offered at the price of onedollar each, will be entitled to a 30 per cent equity tax credit for this RRSP season.

 "And you can actually go back three years and forward four years … based on the provincial taxes you've paid," he explained.

 He said individuals who currently have a self-directed RRSP fund also have the opportunity to redirect those investments into the Covey Island fund and they would be entitled to the equity tax credit, as well.

 Mr. Hutchinson said there will be a limit of 20 per cent of the fund which can be directed at any one investing corporation, and the amount that would ultimately be made available would be determined by the fund's board of directors.

 Potential companies could include such entities as boat manufacturers and repair companies, a marina, fishery-related businesses, sail lofts, rigging services, chandlery, shipwright training and education, sail-training schools, boat sales and brokerage.

 Mr. Hutchinson said that it ishoped that a public offering of shares will be carried out each year, which will help the province achieve its goal of increasing the amount of investment made in Nova Scotia by Nova Scotians from two per cent to five per cent by 2010.

 Lunenburg Waterfront Association president Jim Eisenhauer said his group is pleased to see the initiative, "and supports the idea of CEDIF with the objective of stimulating business and economic activity on Lunenburg's waterfront."

 South Shore-St. Margarets Member of Parliament Gerald Keddy believes the new fund will not only play an active role in the revitalization of the waterfront, but will provide investors with the opportunity to see their money "working at home, in the community."

posted on 02/17/09
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