About Labour Sponsored Investment Funds

The Labour Sponsored Investment Fund Tax Credit began phasing out in 2009 and ended on December 31, 2011. You can still claim this credit if you are completing or amending your tax returns for years prior to 2012. Investment funds are still available for purchase without the tax credit refund.

A Labour Sponsored Investment Fund is a venture-capital corporation that encourages investment in small- to medium-sized companies. The corporation selling the Labour Sponsored Investment Fund must be sponsored by a labour union and allow the union to appoint members to the fund’s board of directors.

Any company that a Labour Sponsored Investment Fund invests in must:

  • have less than 500 employees
  • have less than $50 million in assets
  • pay 50% or more of its wages and salaries to workers in Ontario

How the credit worked

The Labour Sponsored Investment Fund tax credit was meant to help investors like you with the cost of buying a Labour Sponsored Investment Fund. Through the credit, you could have received up to 15% of the cost of your investment back.

To qualify for the credit, the Labour Sponsored Investment Fund must have been registered under the Ontario Investment and Employee Ownership Program.

The credit phased out beginning in 2009 and was no longer available after 2011. For investments made:

  • in or before 2009, the tax credit was 15%
  • in 2010, the tax credit was 10%
  • in 2011, the tax credit was 5%
  • after 2011, no tax credit is available

You could have received an additional 5% tax credit for investing in a Labour Sponsored Investment Fund that qualified as a research-oriented investment fund. To qualify as research-oriented, the fund should have held at least 50% of its investments in businesses where at least 50% of their expenses were from research and experimental development.

File your taxes to apply

The Labour Sponsored Investment Fund tax credit was delivered through the personal income tax system administered by the Canada Revenue Agency (CRA).

Filing for the first time

If you haven’t filed your 2011 or older income tax returns you can download a general income tax package for 2011 or prior years from the CRA. Complete the forms, including form ON428, and submit them to the CRA by mail or electronically.

If you’re unable to prepare your income tax yourself, the Community Volunteer Income Tax Program may be able to help you.

Changing a past return

To claim the credit for a prior year when you have already filed your tax return, you can submit an adjustment request online or by mail to the Canada Revenue Agency.

How to invest

You can invest in a Labour Sponsored Investment Fund through your bank or investment firm.

Before you invest, read all reports available on the Labour Sponsored Investment Fund to make sure you understand the risks and costs of your potential investment.

Other tax credits and benefits

You and your family could receive other Ontario tax credits.

Use the tax credit calculator to learn more.