FAQ

Where is the money going? What is it being used for?

All potential Innovation Fund investments are studied, vetted and approved by the New Dawn Innovation Fund Advisory Investment Committee. The committee is appointed by the Board of Directors.

Board members for 2015 include:

Chair: Doug Lionais, CBU Associate Professor
Secretary/Treasurer: Rankin MacSween, President of New Dawn Enterprises
Marie Walsh, CBRM CFO
Maureen Sullivan, Entrepreneur
Diane Kelderman, President, Nova Scotia Co-op Council
Bob Pelley, Innovacorp
Mary Anne Vuletich, CBRM
Steve Lilley, President, Protocase
Dave Gills, President Gillis Building Supply
Jerry MacNeil, Retired Entrepreneur
Father Ora McManus, New Dawn Enterprises

The 2015 Innovation Fund Advisory Committee includes:

Chair: Doug Lionais, CBU Associate Professor
Secretary/Treasurer: Rankin MacSween, President of New Dawn Enterprises
Marie Walsh, CBRM CFO
Diane Kelderman, President, Nova Scotia Co-op Council
Bob Pelley, Innovacorp
Steve Lilley, President, Protocase

After researching and vetting applicants for investment, formal recommendations for investment will be made and information about the companies will be shared on the New Dawn website and sent to investors.

In the past, investments of the Innovation Fund have included those in Protocase, Marcato Digital, Nova Stream and Halifax Biomedical. The Innovation Fund intends to continue its focus on locally-based, innovative, export-oriented, technology companies.

Investment Process:

Potential investment recipients must be active for-profit businesses based in Cape Breton and listed with the Nova Scotia Registry of Joint Stock Companies.

All potential New Dawn Innovation Fund investments are reviewed and approved by the Innovation Fund board.

Prospective investees must meet all lending criteria, including the provision of three years of financial statements and Canada Revenue Agency Tax Returns.

Following approval of a five-year investment, New Dawn CEDIF businesses must submit annual financial statements for board assessment and pay interest monthly.

 

What is the dividend or interest rate?

A dividend is a distribution of profits by a company to its shareholders. The money invested by New Dawn, on behalf of its shareholders (investors) generates profit and part of this profited is in turn distributed to shareholders (investors) as dividends.

The New Dawn Innovation Fund cannot guarantee a specific dividend or interest rate. The rate depends on the success of the businesses and activities that the fund is invested in over five years. Historically, however, New Dawn CEDIFs have paid between a 2% and a 4.3% dividend.

Dividends are paid to investors every six months. New Dawn CEDIFs have been paying dividends since 2006 and have issued a total of $1,200,000 in dividend payments to investors.

How long is my money invested for? What if I want to withdraw earlier?

When purchasing CEDIF securities your money is invested for five years.

You can withdraw you money before five years but will have to repay a prorated portion of the 35% non-refundable provincial tax credit to the province of Nova Scotia. New Dawn has a 100% redemption rate – all investor requests for redemptions at five years have been met.

After five years you will be given the option to roll-over your investment for another five years, if the CEDIF meets certain conditions, or redeem your investment.

Investments rolled-over (reinvested) after five years qualify for an additional 20% non-refundable provincial tax credit. After ten years investments qualify for a further 10% non-refundable provincial tax credit, again, if the CEDIF meets certain conditions. On an investment of $1,000 this means an added $300 tax credit or a total of $650 in tax credits on a $1,000 investment over fifteen years.

If you have placed your CEDIF in a self-directed RRSP account it will be subject to the same withdrawal policies and penalties as all other RRSPs.

What is the 35% non-refundable provincial income tax credit? What form is used to claim the credit?

Instead of reducing your taxable income like a tax deduction does, non-refundable tax credits reduce your taxes owing.

On a $1,000 CEDIF purchase, your 35% non-refundable tax credit amounts to $350. If you owe, for example, $1,000 in provincial income taxes, the $350 provincial equity tax credit would reduce your taxes owing to $650.

The tax credit can be carried back three years or forward seven years on your tax return and is claimed on form #T1285. New Dawn can provide you with a copy of this form during your visit. 

Is my investment guaranteed?

No, investments are not guaranteed. With your investment you have purchased common shares in the New Dawn Innovation Fund which represent a percentage ownership of this company. The success of your investment in New Dawn Innovation Fund is dependent on the investments in turn made by the Fund.

All potential investments are reviewed and approved by the New Dawn Innovation Fund board.

Prospective investees must meet all lending criteria, including the provision of three years of financial statements and Canada Revenue Agency Tax Returns. Following approval of a five-year loan, New Dawn CEDIF businesses must submit annual financial statements for board assessment and pay interest monthly.

When can I expect to receive receipts and other paperwork for my investment?

Receipts for RRSP CEDIF investments are mailed directly to investors from their RRSP trustee. These generally arrive a few weeks after your investment paperwork is complete.

Equity Tax Credit receipts are processed and sent by the Province of Nova Scotia directly to investors. The Province issues these receipts by the end of March so that the credit can be applied, if desired, to 2014 Tax Returns.

How do I transfer existing RRSPs from other financial institutions?

When you initiate the process of purchasing a CEDIF through New Dawn you will complete a Request to Transfer RRSPs form which will then be sent to the Canadian Worker’s Federation (CWCF) who acts as New Dawn’s RRSP Trustee. The CWCF will follow up with your financial institution or financial institutions to make all necessary arrangements.

Are there any fees?

No. You will not have to pay any initial or annual management fees. New Dawn pays the full management fee charged by the Canadian Workers Cooperative Federation (CWCF) for its RRSP trustee services.

Any actions taken on your own (i.e. requesting duplicate statements from the CWF) may result in fees for which you are responsible.

What can I expect from the New Dawn Innovation Fund throughout the year?

In your first investment year, the money that has been raised through the investment campaign is typically lent out in June after final approval from the province has been received. Consequently, you will receive your first dividend cheque the following December/January.

In each subsequent year, you will receive by mail a dividend letter and cheque (if you have non-RRSP CEDIFs) or a dividend letter indicating the amount earned and deposited in your RRSP account (if you have self-designated RRSP CEDIFs) in July and January.

New Dawn also places an ad in the Cape Breton Post in July and January indicating that dividends have been issued and the dividend rate.

With your annual January dividend you can also expect to receive an invitation to our investors’ luncheon held in January or February.

You will receive your last cheque six months after the five year anniversary of your investment. You receive ten cheques over five years with the first and last cheques having been delayed by six months.

What is the Canadian Workers Cooperative Federation?

The Canadian Worker Cooperative Federation (CWCF) is the RRSP trustee for New Dawn CEDIFs. The CWCF has been New Dawn’s RRSP trustee for the last three years.

The Canadian Worker Co-operative Federation is a national, bilingual grassroots membership organization of and for worker co-operatives, related types of co-operatives (multi-stakeholder co-ops and worker-shareholder co-ops), and organizations that support the growth and development of worker co-operatives. CWCF was incorporated in 1992.

In order to set up a self-directed RRSP (or transfer existing RRSPs from other financial institutions into a self-directed RRSP) an individual creates a self-directed contract under a federal government approved plan. The CWCF has such a plan which has been registered through Concentra Trust.