Supporting Rural Development by Embedding Financial Capital: Community Investment Fund Programs

Date: May 13, 2022

Author: Ryan Gibson, Professor & Alex Petric, Research Assistant at the University of Guelph

​While businesses in rural Ontario can face challenges like changing local populations and rising supply chain costs, one major obstacle that can prevent rural business development is access to financial capital. Seed money (such as from loans and equity investments) is vital for starting and growing a business, and this may be hard to find in rural areas. Outside of Ontario, several provinces have experimented with programs to encourage local investment, and some of these have had promising success. Recently published research by Alex Petric and Ryan Gibson at the University of Guelph explores these programs—termed Community Investment Fund programs—and how they can be successfully implemented elsewhere.

Community Investment Fund programs aim to simplify investments in community initiatives. Businesses and organizations approved under these programs can accept equity investments from members of the community. These programs aim to provide new, local investment options for local residents whose money is often kept in larger financial institutions and invested outside of the community. Residents also receive tax credits based on investment size, as long as they are held for a minimum number of years. Thus, businesses receive funding to expand, and residents can diversify investments while supporting their communities. The table below outlines each of the provincial Community Investment Fund Programs studied in the article.



  Year Created  Tax Incentive  Refundable Tax Credit? Investment Limits  Minimum Investment Length  RRSP-eligible investment? 
Nova Scotia (CEDIF) 1999

35% tax credit

No Up to $50,000 5 years Yes
New Brunswick (CEDC) 2014

50% tax credit for individuals

15% tax credit for corporations


$1,000-$250,000 for individuals;

$1,000-$50,000 for corporations

4 years Yes
PEI (CEDB) 2011 35% tax credit No Up to $20,000 5 years Yes
Quebec (RIC) 1985 125% tax deduction N/A Unknown 5 years No
Alberta (CEDCTC) 2018 30% tax credit For individuals, not corporations Up to $200,000 5 years Yes
Manitoba (CEDTC) 2004 45% tax credit Yes Up to $60,000; tax credit must be under 10% of total available 3 years Yes

Navigating Community Investment Fund programs can sometimes be challenging, but when effective supports are in place, these programs can have strong participation that helps support local businesses and communities. Nova Scotia’s Community Economic Development Investment Fund (CEDIF) program has been particularly successful due to proactive government support, and it has helped grow businesses in sectors including agriculture, green energy, food services, and more. Community Investment Fund programs are especially effective among co-operatives that have an existing investor base, and they may provide options for business succession planning, where employees could collectively purchase a retiring owner. If effectively implemented, a Community Investment Fund program in Ontario could encourage rural creativity and sustainability using existing local assets.

The full publication, “Embedding rural capital? Community investment funds in Canada and their implications for rural communities,” is available through the international journal Community Development or by emailing either Alex ( or Ryan Gibson ( In addition, details can be found in a recent YouTube video highlighting the paper.