Northern Ontario Grow Bonds
The McGuinty government is moving to implement its Northern Prosperity Plan -- a range of targeted initiatives aimed at stimulating growth, job creation and a better quality of life for Northern Ontario. The plan is based on four pillars: Strengthening the North and its Communities; Listening to and Serving Northerners Better; Competing Globally; and Providing New Opportunities for All.
One of the key Northern Prosperity Plan components, announced in the 2004 Budget, is a proposed Northern Ontario Grow Bonds pilot program. The Northern Ontario Grow Bonds pilot program would foster prosperity and private-sector job creation by giving northerners an opportunity to invest in their own economic future.
The proposed program hopes to raise up to $20 million through provincially-guaranteed bonds to residents of Northern Ontario, with the proceeds being used to fund loans to small and medium-sized businesses in the North.
The necessary legislation was recently introduced, and if passed by the end of 2004, bonds could be issued in the spring of 2005.
Northern Ontario Grow Bonds
The Northern Ontario Grow Bonds pilot program would be made available to the residents of Northern Ontario, who would have the opportunity to invest in a safe and competitive savings instrument while contributing to local business growth and the economic well-being of the North.
Grow Bonds would be fully secure and would be guaranteed 100 per cent by the provincial government.
The selling period would be two-to-three weeks in duration. Northern residents would receive advance notice of the 2005 Grow Bond issue through a widespread promotional campaign in the North.
The Ontario Financing Authority (OFA) of the Ontario Ministry of Finance would oversee the Grow Bond issue. The OFA is the agency responsible for all provincial borrowing and debt management activities.
By increasing the total amount of capital available for business start-ups and expansions in the North, Grow Bond loans would attract and retain investment and create jobs in Northern Ontario. It is also hoped they would serve to demonstrate to commercial financing institutions in Northern Ontario that higher-risk small- to medium-sized companies in the North merit consideration for financing.
The government proposes that loans to eligible businesses generally be in the range of $125,000 to $1 million, complementing existing or planned government loan assistance programs available to northern businesses.
Businesses would have to be located in Northern Ontario, and eligible projects would have to result in an increase in permanent, full-time employment within the core activities of the business supported by Grow Bonds loan funds. Businesses would also be expected to repay their loans within five years.
Complete parameters for eligibility would be developed through regulations and communicated in the near future.
Both the Northern Ontario Heritage Fund and the proposed Grow Bonds pilot program are complementary elements of the Northern Prosperity Plan. Their activities would be coordinated to ensure no overlap or duplication.
This initiative builds on other Northern Prosperity Plan initiatives underway, such as:
- $256 million for the Northern Highways Program
- A renewed Ontario Northland Transportation Commission (ONTC)
- Northern Development Councils
- The Ontario Mineral Industry Cluster Council, which is working to foster a rising standard of living from Ontario's mineral industry and win more prosperity for communities.