C.B. firm aims to raise $1 million in share sale

By Bruce Erskine - The Chronicle Herald

Fri. Dec 18 - 2009

BCA Venture Capital Ltd., a Cape Breton investment firm, hopes to raise $1 million by selling shares in the business under the province's Community Economic Development Investment Fund program.

"It's a reasonable goal," said company director Greg MacLeod in an interview Thursday.

Mr. MacLeod is a Cape Breton University philosophy and business ethics professor and director of the university's Tompkins Institute for Human Values and Technology.

He is also the author of a book on the Mondragon worker co-op started in 1955 by a priest in the Basque region of Spain that has grown into an $18-billion business.

BCAVC is part of the BCA Group founded by Mr. MacLeod, which has been active in raising local investment money in Cape Breton for 20 years.

"Our sister companies have raised about $3 million," he said.

BCA Group refurbished and sold the former Clearwater plant in North Sydney to Louisbourg Fisheries, which employs more than 50 people.

It has also invested in Classic Frozen Foods, which will soon begin production at Sydport and is responsible for Wentworth Condominium, Bras d'Or Lakes Inn, A & B Mechanical, East Coast Rope and Polysteel.

Mr. MacLeod said BCAVC is looking at investing money raised from the CEDIF in biomass furnace technology being researched by the Tompkins Institute.

He said the furnaces could burn manure to create electricity out of methane gas.

The investment company is also looking at property development opportunities like the Wentworth Condominium project, Cape Breton's first condos, he said.

Under the terms of the CEDIF program, anyone buying a share in BCA Venture Capital gets a 35 per cent tax credit on the investment.

For example, someone investing $10,000 in BCAVC would get a $3,500 income tax deduction. If the money is borrowed, interest on the loan is tax deductible.

After five years, investors receive another 20 per cent tax credit if they leave their investment intact for another five years.

And investors with money in an RRSP can transfer those funds to a CEDIF and receive the tax credit without any penalties.

Mr. MacLeod said CEDIFs give small local companies an inexpensive way to sell shares and raise capital, noting that typical initial public offerings cost $50,000 to launch.

"It's an enormous challenge to attract investment outside Halifax," he said. "You need alternative investment structures."

He called the CEDIF program a tremendous opportunity for investors to put their "old musty RRSPs" to good use locally and to benefit from the generous tax breaks available. "It's good business and it's good socially," he said.

BCAVC is holding a CEDIF investment campaign at the Lyceum Building on George Street in Sydney from Jan. 4 to Feb. 28.

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