About the Program
Community Economic Development Business Program Overview
The Community Economic Development Business program is coordinated by the Department of Finance and Municipal Affairs under the Community Development Equity Tax Credit Act and regulations.
The program provides a method for Islanders to invest in economic development within their community. Through the program, an approved CEDB may obtain equity financing from Islanders.
The Province of Prince Edward Island provides a personal income tax credit, known as a Community Development Equity Tax Credit, to individuals investing in the approved CEDB. This investment is also eligible for RRSP tax deductibility.
Businesses that are eligible for registration as a CEDB include corporations and assocations pursuant to the laws of Prince Edward Island.
The CEBD raises capital by issuing shares to individuals, and in turn invests that capital in eligible local businesses that meet the following criteria:
- Involved in active business;
- Have less than $15 million in assets;
- Have less than 100 full-time employees;
- Have at least 75% of the wages and salaries paid in the province of PEI;
All trading and distribution of securities in Prince Edward Island is regulated by the office of the Superintendent of Securities under the PEI Securities Act and regulations. CEDBs are also subject to Local Rule 45-508 respecting Community Economic Development Businesses.
Securities by CEDBs to local investors must be fully paid non-redeemable, non-retractable, non-convertible voting shares that are unrestricted in profit sharing or participation upon dissolution.
Local residents over 19 years of age, who invest in a CEDB on or after July 4th, 2011 will be eligible for a PEI income tax credit.
Beginning with the 2011 taxation year, the tax credit is calculated at 35% of the investment made by the individual to a maximum annual investment of $20,000 (maximum annual credit $7,000).
Investments must be held for at least five years to earn the full value of the tax credit. Investments in CEDBs held for less than five years will be subject to a pro-rated reduction of the eligible tax credit.
Tax credits can be carried forward seven years or back three years. Tax credits may not be carried back before 2011.
For full program details, download the PEI Community Development Equity Tax Credit Information Guide [PDF File]
For questions or for more information, please contact the CEDB Coordinator at (902) 368-4030.
For information on PEI securities regulation pertaining to CEDBs, contact the office of the Superintendent of Securities at (902) 368-6288.