Building Community Through Business: CICs and the Future of Non-Market Housing in Nova Scotia
What does non-market housing look like when it blends a non-profit mission with private sector expertise? The answer may lie in Community Interest Companies (CICs), a hybrid business model that combines the entrepreneurial tools and practices of the private sector, with a legally defined social purpose.
Nova Scotia’s Community Interest Companies Act (2014) allows businesses incorporated under the provincial Companies Act to apply for CIC designation. In effect since 2016, the model enables companies to generate profit while being structurally bound to reinvest in community benefit.
While CICs can be created for a range of purposes, from health and environmental sustainability to cultural and social initiatives, this piece explores their untapped potential in the non-market housing sector: an innovative but still largely untested application of the CIC model in Nova Scotia.
What is a Community Interest Company (CIC)?
Modelled after similar legislation in British Columbia (Business Corporations Act) and the United Kingdom (Companies (Audit, Investigations and Community Enterprise) Act), CICs operate as socially driven enterprises. They can engage in for-profit activities and issue share capital, but must prioritize defined community purposes benefitting society as a whole, or benefitting large, specific groups/communities/populations.
Common examples of social enterprises include:
- Farmers’ markets
- Affordable, non-market housing
- Used clothing banks
- Businesses run by charitable organizations
Community Purpose Requirement
Nova Scotia’s CIC legislation requires enterprises to explicitly declare their community purpose within their incorporation documents and submit an accompanying Community Interest Plan. CICs must report annually on their progress toward fulfilling this stated purpose. Activities primarily political in nature, though not explicitly defined in the Act, are prohibited.
Financial Structure (Shares and ROI Limitations)
CICs can issue shares, enabling investors to receive limited financial returns. However, these returns are capped to ensure profits predominantly support the defined community purpose:
- Dividends to shareholders are capped at 40% of distributable profits annually.
- Interest payments on CIC-issued debentures are capped at 15% annually.
Asset Lock and Transfer Restrictions
CICs are required to reinvest their assets directly into their community mission. To maintain ongoing community benefit, CICs face strict restrictions against transferring assets below fair market value, except to designated “qualified entities” such as registered charities, non-profits, educational institutions, or government bodies. This asset lock remains in place even upon dissolution.
Taxation and Transparency
CICs pay standard corporate tax rates. They are obligated to publicly release annual financial statements and a detailed Community Interest Report, demonstrating how their operations have advanced their stated community objectives.
Implications for Non-Market Housing
Non-market housing refers to housing priced below market rates and made affordable through public or community-based supports. CICs offer a promising (and largely unutilized) model for delivering such housing in Nova Scotia.
- Non-Market Housing Classification:Housing developed by CICs would likely be classified as non-market housing (due to profit and asset-transfer restrictions), yet not traditionally non-profit. This provides flexibility in financing and operational approaches, paired with strong accountability measures.
- Long-term Affordability Protections: CICs are prohibited from freely selling assets on the open market. Upon dissolution, assets must be transferred to another qualified entity with a similar community purpose. This offers a key legislative safeguard for long-term preservation of housing affordability and community value.
Opportunities for Cross-Sector Collaboration
CICs could help address common challenges in the non-profit housing sector, including:
- Limited access to capital, equity financing, and development expertise
- Barriers to scaling projects or accessing private investment
By combining private-sector investment and industry expertise with the non-profit sector’s strengths in community engagement and resident support, CICs open the door to innovative, cross-sector partnerships. However, current legislation requires full ownership of assets, raising practical questions about how shared ownership models or joint ventures might function within this framework.
Sector Implications and Strategic Considerations
Rather than serving solely as intermediaries between private and non-profit entities, CICs represent an emerging “third sector” — a model that integrates market-based strategies with social purpose. This hybrid approach may be particularly appealing to:
- Non-profits seeking greater financial flexibility.
- Socially minded developers willing to trade maximum returns for measurable community impact.
CICs could also play a role in addressing Nova Scotia’s historically fragmented and siloed approach to affordable housing by fostering collaborative, cross-sector solutions. The provincial government has increasingly recognized the value of social enterprises in creating jobs, driving local economies, and attracting young entrepreneurs. Expanding the CIC model aligns closely with these broader economic and social policy goals.
Community Economic Development Investment Funds
Another promising, though currently under-explored, opportunity lies in the potential relationship between CICs and Community Economic Development Investment Funds (CEDIFs). CEDIFs are provincially-regulated investment vehicles that enable Nova Scotians, including non-accredited investors, to invest in local businesses while benefiting from a 35% tax credit. This fund (the first of its kind in Canada) has already been successfully used to finance affordable housing, as demonstrated by New Dawn Enterprises in Cape Breton. While it’s not yet clear whether CICs and CEDIFs can be fully integrated under current legislation, they appear highly aligned in spirit, intent, and structure.
It would seem a CEDIF could, theoretically, invest directly into a CIC, thus enabling community members to pool capital into a social-purpose enterprise that remains bound to reinvest profits in the public good. Whether this pathway is currently viable or would require legislative clarity remains uncertain, but the shared purpose and intent of both models suggests a unique and valuable opportunity warranting further exploration.
Next Steps
More research is needed to assess how CICs can best contribute to Nova Scotia’s non-market housing landscape. Everbloom, a Nova Scotia-based social enterprise, is currently the first CIC in the province pursuing this path, offering a valuable local-level case study. Their experience may shed light on both the opportunities and limitations of the CIC model in housing development in Nova Scotia.
Future work should consider:
- Documenting lessons from early adopters like Everbloom.
- Identifying legal, financial, and operational best practices.
- Exploring funding opportunities, particularly those which enable non-accredited investment, such as CEDIFs.
- Exploring how CICs can engage in effective, sustainable partnerships.
These efforts will be essential in determining how and whether a CIC model can become a scalable, community-driven solution to Nova Scotia’s housing challenges.
Katie Brousseau leads strategic policy planning work at Turner Drake. Katie brings a wealth of experience from the not-for-profit sector, with a focus on social enterprise, housing, and community development.
For questions or to explore how Turner Drake can support CICs, non-market housing, or social enterprise initiatives, please reach out to Katie directly at .