In last month’s budget, the United Kingdom announced a 30% tax relief-rate for social investment. The Social Economy Alliance (SEA), a network of over 150 organizations (including social enterprises, co-operatives, universities, housing associations, crowd-funders, social investors, think tanks and charities) is optimistic that the tax relief will help spur greater investment in the UK’s social economy. They have reason to believe this, as over £8.7 billion has been invested to over 20,000 businesses during the past 20 years through similar tax incentive schemes.
The social investment market in the UK has been a source of inspiration for Canadian governments who are interested in supporting the development of innovative economic approaches to solving complex social and environmental issues. With other tax incentive measures already in place in various provinces of Canada (e.g. Nova Scotia, New Brunswick) time will tell whether other jurisdictions in Canada will adopt similar tax incentives. In the meantime, there is growing evidence that tax incentives are helping to level the playing field, making investments in charities and social enteprises as attractive as traditional market investments.
Resources
- UK Budget 2014
- UK Social Economy Alliance response
- “Why social enterprises should be celebrating on budget day”, The Guardian
- CCEDNet webinar recording: Community Economic Development Investment Funds
- New Brunswick Introduces CED Investment Fund Tax Credit
- Development of Federal Tax Credits to Support Community Investment in Canada
- Creating Capital Pools to Support Social Enterprise Development in Manitoba
- CEDIFs: Mobilizing Community Capital for Co-op Development in Manitoba
