Genevieve Simms

The stock market has taken quite a tumble in the last month. Like a drug-fuelled high, it was only a matter of time before the credit- and fossil-fuelled euphoria came to an end. Now is a great time to rehab and reflect.

There are many contradictions to investing in the stock market. Corporations, by law, are mandated to maximize profits for shareholders. The problem is when these profits come at the expense of workers, communities and the environment. Can corporations become ethical and sustainable? Mark Anielski, author of The Economics of Happiness, believes that “without fundamental restructuring of corporate charters… there is little hope that such principles will be taken seriously.”

Yet North Americans continue to pour our retirement savings into the stock market. Canadians had almost $350 billion invested in the stock market as of the end of 2007. The five biggest banks on Wall Street handed out $39 billion US in bonuses this January. Despite a record loss, the former CEO of Citigroup received a bonus of $68 million US. This is peanuts compared to hedge fund managers. In 2007, one manager alone made $3.7 billion. Hedge fund managers don’t produce or invest in goods or services. They make outrageous sums wreaking havoc on the economy by speculating on currencies, commodities, stocks and real estate. We have invested our retirement savings into institutions that epitomize greed.

We even invest in our own demise. For example, some union pension funds invest in corporations that participate in union-busting activities, commit gross labour violations and significantly downsize labour. The Quebec Solidarity Fund (QSF) pension fund holds stock in Gildan, a company based in Montreal. Gildan has a 55 per cent share of the cotton T-shirt market in the United States. Since 2003, Gildan has moved about 500 manufacturing and sales and marketing jobs from Quebec to the Carribean. Despite horrific worker abuses at a factory in Honduras, Quebec union pension funds still own stock in Gildan. Stunningly, the stock market rewards such actions. These problems have put union pension funds in a bind. It is the fiduciary duty, though, of pension funds to act in the best interest of their investors, which is often interpreted as maximizing the rate of return on the investment.

What about investing in ethical mutual funds? The problem is the definition of ethical. Big banks and oil and gas companies, even tar sand companies are in the portfolio of stocks in ethical mutual funds. So where is someone supposed to invest then?

Its investment in Gildan aside, the QSF is an example of an initiative that is outside the narrow confines of the traditional investment box. Created in the midst of a recession in 1983, the QSF was created by unions to create and maintain jobs in Quebec. In 2008, the QSF had over half a million shareholders, with over $7 billion in assets. These investments have created, maintained and protected over 126,000 jobs in Quebec.

The QSF invests in small and medium-sized businesses and co-operatives. In addition, the QSF has created thousands of affordable housing units and, in 2007, invested $12 million in social enterprises — initiatives that use revenue for social and environmental purposes.

The QSF is an RRSP-eligible fund available to all Quebec taxpayers. Unlike a traditional RRSP, though, you are expected to put the money in and not collect until you retire. The reason is that most of the investments are not in the stock market, but in private companies. The goal is not to make a quick profit by trading currencies, commodities or stocks around the globe, but to patiently invest in local companies that make real goods and services.

Another goal of the QSF is to give shareholders a fair rate of return. Though the May 31, 2008 year-end saw a loss of 1.2 per cent, the previous four years saw an average annual rate of return of 5.8 per cent. On top of this, QSF investors are eligible for a 15 per cent tax credit from the government of Quebec and also a 15 per cent tax credit from the Canadian government.

It is time to stop short-term speculation. It is time to start making real productive investments that create sustainable, decent-paying jobs that produce goods and services that minimize our impact on the Earth.

Here in Alberta, we can learn from what the QSF tries to do, and take it to a new level. Unions, co-operatives, non-profits and progressive businesses and investors need to collaborate to create a fund to allow Albertans to invest in local renewable technologies, affordable and efficient housing, sustainable local organic food networks and other progressive initiatives.

David Wilson is an activist working for a more equitable and sustainable Calgary and works for a community economic development organization.