As at September 25, 2020Show prices
As at September 25, 2020Show prices
Labour-Sponsored Investment Funds, commonly referred to as “LSIFS,” are specialized venture funds designed to stimulate investment in small- and medium-sized private businesses. In Saskatchewan, LSIF-specific legislation allows investors in Labour-Sponsored Investment Funds to receive a 17.5% provincial tax credit and a 15% federal tax credit on their investment. If the investment is held within a registered investment vehicle, the shareholder will also receive a RRSP tax deferral commensurate with their marginal tax bracket.
The SaskWorks Venture Fund is a Saskatchewan-based LSIF. Since the Fund’s inception in 2001, SaskWorks has provided a unique opportunity for Saskatchewan residents to keep their investment dollars at home. The Fund invests exclusively in private Saskatchewan businesses, helping to grow our local economy and creating jobs in our province.
The SaskWorks Venture Fund is divided into two share classes: Diversified (Class A) and Resources (Class R). Shareholders may choose to place 100% of their investment dollars into one of the share classes or divide their investment between the two by any percentage they choose.
Since the Fund’s inception in 2001, SaskWorks has provided a unique opportunity for Saskatchewan residents to keep their investment dollars at home. There are three main benefits to investing in SaskWorks:
SaskWorks’ Diversified share class invests in carefully selected Saskatchewan-based companies that demonstrate geographic and sectoral diversity. The Diversified share class invests primarily in the oil and gas, manufacturing, and value-added agriculture industries. To view SaskWorks’ Diversified portfolio, click here.
SaskWorks Resources Share Class, introduced in 2004, provides shareholders with access to Saskatchewan’s oil and gas, mining, and alternative energy sectors. To view SaskWorks’ Resources portfolio, click here.
Saskatchewan’s income tax legislation was amended in 1990 to allow for the establishment of a Labour-Sponsored Venture Capital Program. Under this initiative, investors in Saskatchewan-based labour-sponsored investment funds are eligible to receive a 17.5% provincial tax credit and a 15% federal tax credit on their investment of up to $5,000 annually. If the investment is held within a registered investment vehicle such as an RRSP, the investor will also receive an RSP deferral based on their marginal tax bracket.
The tax credits associated with purchases made during March and December must be claimed for the year in which the purchase was made. The tax credits associated with purchases made during the 1st 60 days of the year (January 1st – March 1st) may be claimed for the previous or current tax year.
LSIF tax credits may not be carried forward.
You will receive two tax receipts: an RRSP receipt and a Government-issued T2C receipt. The T2C receipt is required in order to correctly claim your tax credit on both your Provincial and Federal tax returns.
Receipts are issued in mid-January for investments made between March and December of the previous year and periodically throughout January and February for RRSP season purchases.
To claim your tax credit, fill out your tax forms as follows:
Federal Tax Schedule 1
Labour Sponsored Tax Credit
Line 413 – Total Bought; Fill in your total investment in SaskWorks
Line 414 – Allowable Credit; Fill in the 15% Federal Tax Credit ONLY
Provincial Tax SK428
Line 65 – Labour Sponsored Tax Credit; Fill in the 17.5% Provincial Tax Credit ONLY
Line 61 – Investments and Venture Capital; do not fill in
Under the Labour-Sponsored Venture Capital Corporations act, a shareholder must hold their SaskWorks shares for 8 years.
After the legislated 8-year LSIF hold period has elapsed, an investor may redeem their shares in the SaskWorks Venture Fund without penalty. Please note: any tax clawbacks are waived in the event of a shareholder’s death.
Mature shares will remain invested in the Fund until the shareholder chooses to redeem them. Shareholders may also “roll” their mature investment back into the Fund; upon doing so, the shareholder will receive a second tax credit on their original investment.
Yes, you may redeem your investment at any time. If you redeem all or part of your investment prior to the expiry of the 8-year holding period, the tax credits received on the redeemed shares must be repaid to the Provincial and Federal governments. The amount of tax credits issued (32.5%) will be withheld from the amount payable.
SaskWorks Venture Fund can be added to your portfolio via a specially-licensed investment advisor. If you do not currently work with an advisor, please contact the Fund at (306) 791-4813 or firstname.lastname@example.org.
You may invest in SaskWorks in one of the following 3 ways:
SaskWorks Payroll Investment Plan (PIP) is a systematic contribution strategy that allows shareholders to invest in the SaskWorks Venture Fund with a lower initial cost outlay. Participants in the plan have a pre-determined amount deducted from their paycheque each pay period and redirected to their SaskWorks investment. Since the 32.5% combined tax credit and the RRSP tax deferral are received at source – that is, deducted from the income tax paid each pay period – participants pay less tax while investing in Saskatchewan’s top-performing labour-sponsored investment fund.
SaskWorks is managed by PFM Capital Inc., a Regina-based private equity investment management firm. Celebrating 30 years in 2019, PFM has raised over $911 million in capital. Learn more about PFM Capital at www.pfm.ca.
The more taxable income you have, the higher your marginal tax rate. You should therefore consider allocating future taxable income as evenly as possible between you and your spouse – commonly known as ‘income splitting’.
You are entitled to put all or part of your allowable annual and carried forward contribution eligibility into an RRSP in your spouse’s name. This may lower the combined income tax you and your spouse must pay each year when you withdraw your RRSP eligible savings during retirement.
As the contributor to a spousal RRSP, you benefit from the RSP tax deduction while building a retirement nest egg for your spouse. Amounts withdrawn from a spousal RRSP will be considered part of your spouse’s taxable income. A spousal RRSP is most beneficial in a situation where the plan-holder would otherwise have little retirement income while the contributing spouse would have a significant amount of income.
When SaskWorks is purchased in a spousal RRSP, either spouse is able to claim the tax credits. This means that in the first 60 days of the year, $20,000 could be contributed to the spousal RRSP with each spouse using tax credits on $5,000 contributions for the current and the prior tax year (assuming no prior investment).
SaskWorks are eligible for RRSPs, Spousal RRSPs, RRIFs and Spousal RRIFs.
No, SaskWorks cannot be purchased within an RESP.
No, SaskWorks cannot be purchased within a TFSA.
READ OUR PROSPECTUS > This offering is made only by prospectus. The prospectus contains important detailed information about the securities being offered. Copies of the prospectus may be obtained free of charge from your Investment Advisor or the agent, Industrial Alliance Securities Inc. (www.iavm.ca). Investors should read the prospectus and consult an Investment Advisor before making an investment decision.