| From The Power of the Purse Labour Sponsored Investment Funds (LSIF) LSIFs were designed for unions to become a player in the economy in job creation and job retention. Union members invest in these funds, as a way of investing in funds that support workers interests to create jobs, and provide funds for economic development in their own communities. A unique feature of the sponsoring unions and federations of unions, and the funds are therefore seen as an opportunity for unions to have a strong role in regional development. The model for LSIFs is the Quebec Federation of Labour's Solidarity Funds which was legislated by the provincial goverment in 1983, with generous start-up grants from both the federal and provincial governments. It was designed to provide investment capital for small and medium-sized Quebec businesses in the midst of a recession, as an incentive to stay in Quebec and create jobs. Since then, LSIFs have sprung up across Canada starting with Working Ventures, a fund administered by the Canadian Federation of Labour and, again, funded generously by the Federal government. At the provincial level, many Federations of Labour have initiated LSIF's, in New Brunswick, Manitoba, British Columbia. In Ontario, however, by legislation passed by the NDP goverment, individual unions may sponsor a fund. CUPE and CAW were opposed to the idea of a fund. Steel with its experience of an employee buy out at Algoma, were stongly in favour of starting a fund supporting companies with positive labour practices. The OFL as a consequence took a position that involment in venture capital funds was a decision of the individual affiliate. The legislation is structured in this way to leave the decision up to individual unions. CAW has been opposed to LSIFs on the grounds that they may undermine pension plans, and that the rate of return on the investment that working people put into LSIFs is not adequete. LSIF's , CAW maintains may wrongly be viewed as an alternative to pension plans that are at least partly funded by their employer. Also, CAW has felt strongly that goverment and the corporate sector are responsible for job creation, and workers should not be investing in areas of the economy that may hold risk for their investment, in order to create badly needed jobs. It does need to be noted that, although all monies in the fund are not invested in small business, the purpose of the fund is to provide financial support for small to medium sized businesses, some of which fail. Therefore the rate of return on the investment is lower. The net result in Onatrio of this debate over the merits of LSIF's, is that here has been a proliferation of LSIF's which are sponsered in name only by Unions, but are otherwise venture capital funds, run by Bay Street for the benefit of the corporate sector and not for workers. There are, however, some true labour-sponsored investment funds in Onatrio: the First Ontario Fund is one. The Labour sponsores of this fund are the USWA, CUPE Hydro, SEIU and CEP. The remaining sponsor is the Ontario Worker Co-operative Federation of Onatrio. First Ontario with the Solidarity Fund of Quebec, the Working Opportunity Fund of B.C. the Crocus Fund of Manitoba, and the Workers Investment Fund of New Bruswick have drawn up a defining statement of principle for LSIF's to bring to the fore the committment to job retention and job creation, as well as providing an equitable return to shareholders. I |