THE ECONOMIC-IMPACT OF LABOR-SPONSORED VENTURE CAPITAL CORPORATIONS -A CASE-STUDY FROM QUEBEC

The Fonds de Solidarite des Travailleurs du Quebec is Canada's oldest labour-sponsored venture capital corporation. Like other such investme nt funds it enjoys a substantial tax advantage for promoting labour-fr iendly policies, including worker education and participation. While c ritics fear that these funds may crowd our other investors, Laliberte' s case study suggests otherwise: most of the firms that dealt with the Fund had been unable to raise capital elsewhere or were attracted by its emphasis on improved industrial relations. He makes a convincing a rgument that such funds help firms restructure and make a net contribu tion to the economy, justifying a subsidy.