MONTREAL - The Solidarity Fund is a financial innovation in North America, and is one of few similar institutions in the world (Note 1). Created in 1983 by the Quebec Federation of Labour, the Fund was born into a period of deep recession in Quebec and Canada. "Full employment was a highly attractive prospect at the time," affirms Daoust. New ideas were needed, and the Quebec Federation of Labour had a solution: A new investment fund, sponsored by workers themselves, and with attractive tax rates for investors.
From the start, realities had to be tackled. "Firstly, there has to be a starting point, a trade-union open to such a project. Secondly, you need the will of the authorities and the government. Thirdly, it is critical that those in control of business and finance - those who, to a certain extent, hold the reins of the country's economy - do not kill off the idea before it has hatched." In the end, despite scepticism, the Fund received the support of all the actors involved.
The Fund seeks profitability, but it is considered first and foremost a "capital for development" fund, financial output representing only one part of the equation. The Fund's philosophy is founded upon a social logic which promotes the creation and maintenance of jobs. "Our end goal is, without any doubt, profitability, but beyond profitability, we seek the economic development of Quebec."
In 2003, the Solidarity Fund had over half a million shareholders. From active assets of 4.6 billion Canadian dollars, 2.6 billion were invested in 2,104 companies, to create, maintain or safeguard over 90,000 jobs in Quebec. Although the Fund had initially been blamed for investing in controversial companies, it is today respected as a financial institution which benefits not only the shareholders and the companies in which the Fund invests, but also the population of Quebec and Canada as a whole.
Guiding principles of the Fund
The Solidarity Fund has four guiding principles: to invest in suitable companies and provide them with services to create, maintain and safeguard jobs; to support the training of workers to allow them to increase their influence on the economic development of Quebec; to stimulate Quebec's economy through strategic investments; and to foster awareness and encourage workers to save for their retirement and contribute to the development of the economy by purchasing Fund shares.
As a result, workers have a role beyond the execution of tasks. They gain an insight into the operation of their company and its internal mechanisms, not only in terms of the microeconomics of the entreprise, but also the workplace, the region and Quebec.
Beyond the four initial guiding principles, the Solidarity Fund knew it had to develop other characteristics over its 20 year history - the reason for its success today.
The Responsables Locaux (Local Representatives) hold great pride in the Fund. "Voluntary workers are in charge of enrolling new members in their own workplaces. They play an important part because they work directly on the ground, at the centre of the companies. It's these [Responsables Locaux] who form the spine of the Solidarity Fund. Under the Fund, over 2,000 volunteers have received training, attended courses, taken part in all the public actions of the Fund (i.e. meetings) and have become, in their work environment, the experts, the people who have a good knowledge of the operation of the Fund."
The Fund does not make any investment in any company until it has a "social assessment" of working practices there. "It requires a meticulous examination of the operation of the entreprise with regard to its employees, its style of management, the employers' profiles, the working conditions, the working relationships, the production, competition and respect for the principal policies of the Federation, in particular as regards health and safety at work, and environmental laws."
Moreover, focusing much of their work on small and medium sized enterprises, the Fund set up regional structures which are - with the Responsables Locaux and the social assessment - at the front line of operations. The Solidarity Fund has 17 regional Funds, which can invest between 50,000 and 2 million Canadian dollars; 86 local investment companies, which have the right to invest between 5,000 and 50,000 Canadian dollars; and 43 specialized funds (agro-businesses, technologies, etc.).
The success of the Solidarity Fund is not limited to Quebec. Currently, it directs two projects on the African continent. "One is in Senegal and the other in Algeria. In the case of Senegal, it is due to be set up in the next few months. Protocols have been signed by our partners. It's extraordinary, in both Senegal and Algeria. The process we started two years ago is soon to come into action."
By acting with transparency, the Solidarity Fund proposes a new way of managing a sector of the economy, by founding a "participative economy" where all members are important actors.
Note 1: For more information on Labour-sponsored investment funds, see "Labour-sponsored investment funds: More jobs, more money and job security" at www.ilo.org/public/english/bureau/inf/features/03/funds.htm.