Kimberley residents may soon be able to invest in and access a Community Investment Co-op (CIC) within the East Kootenay-Columbia area.
Mayor Don McCormick has been attending the Community Business Planning Sessions and received a request for the City to participate by signing a Memorandum of Understanding and provide a financial contribution of $2500.
On Monday, April 23, 2018, Kimberley City Council approved the request at a Regular Council Meeting.
In a report to Council, City CAO Scott Sommerville explained that a CIC is a for-profit Co-operative that raises capital from local residents, and then invests this capital in area businesses. CIC’s give residents the opportunity to move a portion of their investment portfolios into the places they live, work, and play. This enables residents to become partners in locally driven economic development, which leads to stronger and more sustainable economies.
McCormick explained on Monday that there has been discussion for quite some time around setting up a community investment fund.
“Loans would be given out to local businesses to start up, expand, and basically to contribute to the success of the community,” McCormick said. “The general feeling is that a ton of money is put into RRSP’s every year by British Columbians and, for the most part, all of that money goes elsewhere.”
He added that RRSP funds end up in places other than the province, such as Toronto. He also pointed to Creston’s CIC, which has been in operation for just over a year, has ten investors and has raised $350,000 in that time (an average of about $3500 per investor). With their format, there is a maximum investment of $5000.
“Two loans have been given out [in Creston] and are in good standing and there’s more than five applications in the pipe line. It’s become a bit of an active go-to,” said McCormick. “It’s important to understand that this isn’t the first port of call for a company looking for money…”
He went on to say that the CIC Kimberley is participating in will cover four different sub-regions: Revelstoke, Columbia Valley and Golden, Kimberley and Cranbrook, and the Elk Valley.
“Right now, every two weeks we’re having a two-hour business planning session to make preliminary decisions on how all of the stakeholders would like to see this organized,” McCormick explained. “We’re building up to a framework, basically, that will then become legal. There’s a lot of steps to go through when you’re setting up an investment pool. Kimberley and the other communities are providing a pool ($2500/each) that will fund the organization to the end of this year. It’s not expected that we’ll have anything in place until the start of 2019.”
There will be governance on the fund, says McCormick, so people don’t loose their money, and there will be a plan for dividends to be distributed to investors at a rate similar to GIC’s.