More Bang For The Buck
February 12, 2016 Peterborough, ON
The impact of the Community Futures Development Corporations’ lending on Ontario’s economy
The Conference Board of Canada (CBoC) undertook a research project for the Ontario Association of Community Futures Development Corporations (OACFDC) to determine the economic impact on Ontario of the lending services provided through the Community Futures Lending Program from 2009-2014.
This report, More Bang for the Buck – The Impact of the Community Futures Program on Ontario’s Economy, is an update to the CBoC’s June 2010 research report. This new research shows a continued positive impact. Again, it confirms what many involved in the Community Futures Program have long believed: “We find that the program, which is meant to ease credit conditions for small and medium-sized businesses in rural communities, has significant economic clout,” is the way the independent research organization, the Conference Board of Canada (CBoC) sums it up.
The Conference Board applied its well- tested Ontario econometric model, noting that from April 2009 to March 2015; the program disbursed $396 million in loans and raised a total of $ 1.142 billion in new capital investment funds—with just over $746 million in spending due to investments from owner’s equity and funds borrowed from third-party lenders. A total of 22,600 person-years of employment were created by the program over six years.
The report goes on to point out “for each $1.00 of direct lending through the program, real GDP is lifted by $4.50.” This is up from the $4.22 indicated in the last report. Excluding the potential boost to corporate income tax revenues, the federal government’s books would stand to improve by a cumulative $307 million over the 2009-14 periods. This compares favourably with the $122 million in federal contributions to support the Community Futures Program over the same time period.
“The key to this program has always been its grassroots focus. Decisions are made right here in Peterborough based on the current priorities of small business owners.” said Tonya Kraan, the General Manager of Community Futures Peterborough “The commitment of the staff and volunteers, who work with and for the entrepreneurs and communities they serve, proves that the Community Futures Program lending services is beneficial to Peterborough’s economy. Our $7,551,486 in lending over the 5 year period equals a $33,981,687 impact on real GDP in Peterborough County.”
About Community Futures Peterborough:
- Community Futures Peterborough is funded through the federal government and was established in 1985, with a mandate to administer a community loan fund in support of small and medium-sized businesses.
- The local impact of the lending activity by Community Futures Peterborough can be determined using the economic impact rule of thumb determined in the Conference Board of Canada‘s study of Ontario CFDCs. Total lending by Community Futures Peterborough from 2009 to 2014 ($7,551,486) x 4.5 = $33,981,687 impact on real GDP
- Community Futures promotes economic growth and diversification that creates and maintains jobs in the City and County of Peterborough. Community Futures Peterborough has disbursed loans to 672 small businesses totaling $26,004,390, helping them maintain and create 3344 jobs since its inception.