What type of building will be purchased?

For its first property, the Co-operative intends to purchase a multi-unit residential property with existing tenants, and without the immediate need for significant repairs, renovations, or site remediation. By purchasing this property, we will preserve permanent affordability through community ownership.

In addition to member investments, what are the other expected sources of funds to purchase the first property?

Union Co-operative intends to apply for mortgage financing with CMHC Mortgage Loan Insurance. Additional funds are anticipated from investments by charitable foundations as loans.

What's the difference between a Membership Share and a Preference Share?

Every member owns one Membership Share. It means you are an owner of the Co-operative, and can vote or run for the Board. It's like a Common Share in a business corporation. A Preference Share is an investment share. It earns board-declared dividends and provides the capital needed to purchase our first property.

Do I have to invest in preference shares if I become a member?

Only members can invest in preference shares, but members do not have to invest in preference shares. We happily welcome members regardless of whether they purchase preference shares.

Why do I have to become a member to invest in preference shares?

We think ownership matters. Members are not just investors, they are the force behind the Co-operative’s mission of creating permanent affordability through community ownership.

What is the minimum investment I can make in preference shares?

Preference shares cost $25 each and are sold in lots (e.g., bundles or groupings) of 40, which means that the minimum investment in preference shares is $1,000. You must be a member to purchase preference shares (member shares are $500).

What forms of payment do you accept?

You can purchase shares by cheque, E-Transfer, or Pre-Authorized Debit (also called Electronic Fund Transfer), or by transferring funds held in an RRSP account. You cannot purchase shares with a credit card.

What is ‘escrow’ and why does it matter?

When you invest in Union Co-operative, the funds will be held in trust by the escrow agent (a lawyer who is responsible for ensuring that the invested funds are only used in accordance with the escrow agreement). The escrow agreement ensures that invested funds are used to acquire, manage, and operate the first property (e.g., not for pre-acquisition staffing or legal costs). The use of an escrow is intended to reduce the risks for an investing member.

It is important to note that preference shares will only be issued once funds are released from escrow (e.g., once the first property is purchased). It will take time to raise the funds, locate a suitable property, complete due diligence, and close on the property. The Board of Directors will work quickly to acquire the first property, but an investing member should be prepared that invested funds will not earn a return while in escrow.

How much money will I make each year?

Preference shares earn annual Board declared dividends. That means that each year the Board of Directors will review the financial performance of the organization and determine the amount that can be distributed to investing members, while ensuring that the properties are well taken care of and healthy reserves are maintained. It is important to note that investing members are not guaranteed to receive a dividend each year (e.g., due to high acquisition costs in the year that the Co-operative acquires the first property).

For non-registered accounts (e.g., not held in an RRSP), declared dividends will be paid by cheque or direct deposit to your bank account, depending on the option selected when you purchase your preference shares. For registered accounts (e.g., investments held in the Canadian Worker Co-op Federation’s self-directed RRSP program account), declared dividends will be paid directly to your Canadian Worker Co-op Federation account.

Selecting direct deposit helps to reduce the administration costs of the Co-operative. It is important to contact us if your address or banking information changes.

When and how can I get my money back?

Preference shares are long-term investments. Members may request the redemption of preference shares five years after they are issued. If the total amount requested for redemption by all investing members exceeds the funds available for redemption in a given year, then preference shares will be redeemed in the order in which the requests are received.

Funds to redeem shares will come from the sale of additional shares and/or debentures, refinancing properties, and from operating surpluses.

Is this a risky investment?

An investment in Union Co-operative’s first project will not be right for everyone, and it does carry risks. See the Offering Statement (and specifically Section 7 – Risk Factors) for a detailed discussion of risks.

The Co-operative is targeting social investors who are willing to accept a lower financial return and increased risks, in exchange for the possibility of non-financial social returns, such as the affordability of rents.

If investing is not right for you right now, that is ok! There are many ways to support Union Co-operative, including as a volunteer, sharing information about the Co-operative with friends, and reaching out with ideas for potential properties or ways that we can increase our impact within the community.

How does the self-directed RRSP option work?

The Canadian Worker Co-op Federation (CWCF) is a national organization that developed a program so that co-operative securities (e.g., preference shares) can be held in a self-directed RRSP, with Concentra Trust as the trustee. Union Co-operative is an Associate Member of CWCF, a membership type available to non-worker co-operatives, which provides access to the RRSP program.

An investing member may transfer funds from an existing RRSP (e.g., held at a credit union or bank) to the CWCF self-directed RRSP account, or an investing member may purchase a preference share and then transfer the share certificate into a self-directed RRSP account. The same limits (e.g., annual contribution limits, maturity date) that apply to registered contributions generally apply to this self-directed plan.

Is there an annual fee?

The individual plan-holder owes an annual account fee (currently $55 but subject to change at the discretion of CWCF). Preference shares from other eligible co-operatives may also be held in the account. To illustrate the impact of this fee, a dividend of 2% requires a preference share investment of $3,000 to earn a sufficient return ($60) to cover the account fee.

What happens with my dividends?

Any dividends are paid directly to the CWCF account, where they will be held as cash until the holder (1) purchases additional shares at Union Co-operative or a different co-operative that is participating in the CWCF self-directed RRSP program, (2) transfers the cash to another RRSP, or (3) withdraws the cash from the RRSP. It is important to note that transfers and withdrawals may result in fees charged by CWCF.

Can I invest via a TFSA, LIRA, RRIF, RPP, or RESP?

Union Co-operative's preference shares can be held in a self-directed RRSP thanks to a program offered by the Canadian Worker Co-operative Federation and Concentra Trust. We are not currently able to accept investments from other types of registered funds (e.g., TFSA, LIRA).

Who owns Union Co-operative?

Union is a co-operative that is owned by its members. There are two membership groups: Community Members and Tenant Members. A Community Member may become a Tenant Member upon becoming a tenant of the Co-operative, and a Tenant Member may become a Community Member if they decide to move.

What is expected of a member beyond investing?

Members are not expected to perform operational tasks. We will contract qualified professionals to complete property management, repairs, and maintenance.

Members are invited to participate in governance decisions. There are also volunteer opportunities for members who would like to support community and member engagement, research, marketing, and other organizational activities. Please let us know if you would like to be actively involved and we can find an opportunity that is enjoyable for you and valuable to the continued development of Union Co-operative!

Will we sell the properties to generate profit for members?

No! Union Co-operative is acquiring properties for permanent affordability through community ownership. We will not sell properties to generate a profit for our members. The foundational documents (articles and by-laws) require that if the Co-operative is ever dissolved that, after paying back all debts and redeeming all outstanding shares, all the proceeds will be donated to a registered Canadian charity. It is expected that the Co-operative will adopt additional policies to prevent the sale of properties at the expense of our social purpose.