Mr. Rajotte, members of the Standing Committee on Finance, good morning. I would like to thank you for having us here today.
My name is Yvon Bolduc, and I'm the chief executive officer of the Fonds de solidarité FTQ. With me is Mr. Mario Tremblay, the vice-president of public and corporate affairs at the Fonds de solidarité FTQ. This morning we are presenting the joint brief of the Fonds de solidarité FTQ and the FTQ, the Fédération des travailleurs et travailleuses du Québec.
Our brief will focus on a single topic: the importance of the venture and development capital industry in Quebec. Why is this important? It's important for the employment, innovation and productivity of companies. We will also speak about the importance of the existence of these workers' funds, which play so important and fundamental a role that the program is recognized in Quebec and across Canada.
The Fonds de solidarité FTQ was created in 1983 to address concerns about employment and economic development. I would like to thank the two levels of government for sustaining the Fonds de solidarité FTQ and other workers' funds for close to 30 years now. I want you to know that we are part of the solution. Actually, the fund has net assets of about $8 billion. We have a record high of more than 583,000 shareholders who represent 14% of the Quebec labour force. Fifty-eight per cent of the investors are unionized, while the remaining 42% are not.
The solidarity fund currently provides funding for 2,129 businesses, primarily SMEs in all regions of Quebec. The value added of those businesses amounts to almost 8% of Quebec's total GDP.
Over the past 10 years, the Fonds de solidarité FTQ has directly invested close to $6 billion in businesses and specialized private funds, including $1.5 billion in sectors such as the new economy and life sciences, making the fund a leader in venture capital in Quebec.
However, I think that the private investment industry has recently gone through several bad years, especially in fundraising, with 2010 and 2011 being particularly weak. Quebec was less affected by this decrease. Venture capital funds established in Quebec accounted for 42% of all commitments in Canada, far outstripping the ratio between the Quebec and Canadian economies.
Quebec's strong financial support for SMEs stems primarily from the ability of labour funds, especially the Fonds de solidarité FTQ, to attract Quebeckers' retirement savings and use those savings, which constitute a new source of funding, directly to provide equity funding for private companies or by contributing to independent private funds.
I'd like to quote Gregory Smith, president of the Canada Venture Capital Association, who said:
Quebec has been a leader. But no one province or one fund can prop up the entire industry. You need to work in collaboration. If all the provinces had a strategy as robust as Quebec, you'd see a market pickup.
I'd like to point out that, because the labour fund model, especially where it is well structured and complements other financial institutions, helps promote and develop saving habits and allows those savings to provide equity funding for private businesses, we endorse and approve of the recommendation made by the Standing Committee on Finance in its December 2009 report, which was to increase the labour-sponsored funds tax credit to 20% of eligible investments.
This proposal is especially responsible in difficult financial and economic times, because the tax credit not only supports a program that is vital to the future of Canadian businesses, but also enables both levels of government to recover their investments in an average of three years, according to studies carried out in 2010 by the Montreal firm SECOR and Regional Data Corp. in Ottawa. This would ensure strong support for the funding of businesses, venture capital and innovation, and would encourage saving for retirement, which has become a major issue for all Canadians and all governments in Canada.