This page is for Canadian co-operatives, credit unions, social good investors, and individuals considering an investment in the Stirchley Co-operative Development (SCD) Community Bond.
This guide is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The SCD bonds have not been registered under any Canadian provincial securities legislation and may not be offered or sold in Canada absent an applicable prospectus exemption. Prospective Canadian investors should consult their own legal, tax, and financial advisers before investing.
At a Glance
| SCD Community Bond | Canadian Community Bond (e.g. Indwell) | |
|---|---|---|
| Interest rate | Up to 3.5% per annum | 3.5% – 5% |
| Minimum investment | £20,000 (~C$36,800) | $1,000 – $50,000 (varies by series) |
| Currency | GBP (British pounds sterling) | CAD |
| Prospectus filed | No — exemption required | No — NI 45-106 exemption |
| RRSP / TFSA eligible | ❌ No — foreign bond, not a qualified investment for registered plans | ✅ Yes — certain series eligible (e.g. Indwell Series C) |
| Secondary market | None (non-transferable) | None (non-transferable) |
| Security | Varies by amount (see below) | Generally unsecured; backed by issuer’s assets |
| Canadian tax reporting | Complex (Form T1135, foreign income, foreign tax credit) | Standard T5 slip |
| Impact focus | Social housing & worker co-ops in Birmingham, UK | Affordable housing in Ontario, Canada |
The SCD bond offers a comparable interest rate to Canadian community bonds, but carries additional complexity, currency risk, and the significant drawback of not being eligible for RRSP or TFSA registered accounts — a key benefit that Canadian community bond investors expect.
Why Invest from Canada?
Principle 6 — Co-operation Among Co-operatives
The International Co-operative Alliance’s Principle 6 calls on co-ops to work together locally, nationally, and internationally. Canada has one of the strongest co-operative movements in the world — from housing co-ops and credit unions to worker co-ops and the Canadian Worker Co-operative Federation (CWCF). Investing in SCD is an act of inter-co-operative solidarity — channelling capital from the Canadian co-operative movement to a project that embodies the same principles in the UK. It puts Principle 6 into practice across borders.
A proven model — with a Canadian precedent
Canada is the global leader in community bonds for affordable housing. Indwell Community Homes in Hamilton, Ontario has demonstrated that community bonds can finance supportive, deeply affordable housing at scale — raising $5 million through five bond series with interest rates of 3.5%–5%, and with certain series eligible to be held in RRSPs and TFSAs . The CMHC has profiled this model as a solution to pre-development financing .
SCD is building the same model in Birmingham — community-owned, permanently affordable, democratically governed. Canadian investors who understand community bonds from their own context will recognise SCD immediately.
A compelling story of community resilience
SCD was founded in 2016 by local people in housing and worker co-operatives. After years of planning, construction began in 2023. The contractor went into liquidation in 2024. Construction restarted, but in March 2026 the housing association partner reversed its commitment to hand ownership to SCD. The community fought back — and is now raising £1–2 million through this bond offer to buy back the building and keep it in co-operative hands.
Read the full press timeline on the In the Press page.
Impact aligned with the UN Sustainable Development Goals
| SDG | Target | SCD Contribution | Indicator |
|---|---|---|---|
| SDG 7 — Affordable & Clean Energy | 7.2 — Increase share of renewable energy | Renewable electricity generation, heat pumps, no gas connection | kWh renewable energy generated annually |
| SDG 8 — Decent Work & Economic Growth | 8.3 — Promote productive employment | Purpose-built premises for 3 worker co-ops, shielding from gentrification | Number of worker co-op jobs sustained |
| SDG 10 — Reduced Inequalities | 10.2 — Empower and promote social inclusion | 10% of all social rent housing in Birmingham (2020–2025) | Number of social rent homes delivered (39) |
| SDG 11 — Sustainable Cities & Communities | 11.1 — Access to adequate, affordable housing | 39 permanently affordable, car-free homes | Number of households housed |
| SDG 13 — Climate Action | 13.1 — Strengthen resilience | Zero-carbon-ready building fabric; protection from energy price shocks | Estimated annual CO₂ savings vs. standard build |
Eligibility & Legal
Can a Canadian person or Canadian co-operative invest?
SCD is seeking legal counsel to determine the appropriate prospectus exemption under Canadian securities law for Canadian investors. Securities regulation in Canada is provincial — each province and territory has its own securities commission and its own rules. A prospectus exemption valid in Ontario may not apply identically in British Columbia or Québec.
Until the applicable exemption is confirmed, no offer is being made to Canadian persons.
The most likely prospectus exemptions
Section 2.3 — Accredited Investor Exemption (NI 45-106)
The most commonly used exemption for private placements in Canada. Under National Instrument 45-106, section 2.3, securities can be distributed to “accredited investors” without a prospectus .
| Feature | Detail |
|---|---|
| Who qualifies | Individuals meeting financial thresholds (see below), plus certain entities (financial institutions, registered advisers, etc.) |
| Investment limit | None — accredited investors can invest any amount |
| Offering document | No formal offering memorandum required (but advisable) |
| Risk acknowledgement | Required for individuals qualifying under financial thresholds (paragraphs j, k, l of the accredited investor definition) |
| Resale restrictions | Securities are subject to a hold period under NI 45-102 |
What is an accredited investor in Canada? Key individual thresholds under NI 45-106, s. 1.1:
- Net financial assets over C$1,000,000 (individually or jointly with spouse)
- Net assets over C$5,000,000 (individually or jointly)
- Annual net income over C$200,000 (individually) or C$300,000 (jointly with spouse) in each of the two most recent years, with reasonable expectation of exceeding that in the current year
- Certain professional designations (e.g. Chartered Financial Analyst) also qualify under recent amendments
Section 2.9 — Offering Memorandum Exemption (NI 45-106)
This exemption allows distribution to both accredited and non-accredited investors, provided an offering memorandum is delivered to the purchaser .
| Feature | Detail |
|---|---|
| Accredited investors | No investment limit |
| Non-accredited investors (“eligible investors”) | Generally limited to C$10,000 per 12-month period across all OM-exempt investments, unless the purchaser obtains suitability advice from an eligibility adviser, in which case the limit increases |
| Offering document | Required — must follow the prescribed form (Form 45-106F2 for non-qualifying issuers, or Form 45-106F3 for qualifying issuers) |
| Risk acknowledgement | Required from all purchasers |
This is the most practical route for SCD — it allows both accredited and non-accredited Canadian investors to participate, though non-accredited investors face strict investment limits that are well below the SCD minimum of £20,000 (~C$36,800). In practice, the offering memorandum exemption would primarily serve accredited Canadian investors unless SCD introduced a lower minimum for this exemption.
Provincial variations matter
Key differences across provinces:
| Province | Notable differences |
|---|---|
| Ontario | Does not adopt section 2.5 (Family, Friends and Business Associates) in its local rule; relies instead on Ontario-specific s. 73.1(1) of the Securities Act |
| Québec | Administered by the Autorité des marchés financiers (AMF); French-language requirements for offering documents |
| British Columbia | Has its own local exemptions and interpretation provisions in NI 45-106 |
| All provinces | The accredited investor definition and OM exemption are substantially harmonised, but filing and form requirements vary |
SCD’s legal counsel will need to determine which provinces to target and ensure compliance with each applicable commission’s requirements.
Can a Canadian co-operative or credit union invest?
Potentially yes — certain entities qualify as accredited investors under NI 45-106, including:
- Financial institutions (banks, credit unions, trust companies)
- Registered advisers or dealers under National Instrument 31-103
- Entities with net assets of at least C$5,000,000 as shown on their most recent financial statements
A Canadian credit union or worker co-operative meeting the C$5,000,000 net asset threshold could invest as an accredited investor. Smaller co-ops may still qualify under the offering memorandum exemption, subject to the C$10,000 investment limit for eligible (non-accredited) investors.
Legal confirmation from SCD’s Canadian counsel is required before any entity investment proceeds.
Is the SCD bond eligible for an RRSP or TFSA?
No. The SCD bond is a foreign-issued debt instrument denominated in GBP. For a security to be a “qualified investment” for an RRSP, TFSA, or other registered plan under the Income Tax Act, it must meet the conditions set out in Regulation 4900 .
Canadian community bonds like Indwell’s Series C qualify because they are issued by a Canadian charity and have obtained an independent legal opinion confirming qualified investment status under Regulation 4900(1)(j) . SCD’s bond — issued by a UK co-operative — does not meet these criteria.
This is a significant disadvantage for Canadian investors. One of the primary attractions of community bonds in Canada is the ability to hold them in registered accounts and earn tax-free or tax-deferred interest. The SCD bond cannot offer this. Interest will be fully taxable in the year it is received.
Tax & Reporting
Is the interest income taxable in Canada?
Yes. Canadian residents are taxed on their worldwide income, including interest received from foreign sources . Interest earned on SCD bonds must be reported on the investor’s Canadian tax return.
How to report:
- Convert the GBP interest amount to Canadian dollars using the Bank of Canada exchange rate in effect on the day the interest is received
- Report the converted amount on Line 12100 (Interest and other investment income) of the T1 General return
- If UK withholding tax was deducted, the investor may claim a foreign tax credit on Form T2209 to avoid double taxation, subject to the Canada–UK tax treaty provisions
Will UK withholding tax be deducted?
Under UK domestic law, companies making payments of UK-source interest must generally withhold tax at 20%. Under the Canada–UK Double Taxation Convention (signed 1978, modified by the MLI effective from 1 January 2020 for withholding taxes), Article 11 caps withholding tax on interest at 10% of the gross amount .
This means:
| Scenario | Withholding rate |
|---|---|
| No treaty declaration filed | 20% (UK domestic rate) |
| Treaty declaration filed (Canada–UK Convention, Article 11) | 10% (treaty cap) |
To benefit from the treaty rate, the investor must provide the appropriate treaty declaration form to SCD before interest is paid. A Canadian investor would then claim a foreign tax credit for the 10% withheld, avoiding double taxation.
Do I need to file Form T1135?
Very likely, yes. Form T1135 (Foreign Income Verification Statement) must be filed by Canadian resident individuals, corporations, and certain trusts that, at any time during the year, own specified foreign property costing more than C$100,000 .
An SCD bond is a specified foreign property — it is a debt obligation held outside Canada.
Key details:
| Feature | Detail |
|---|---|
| Threshold | Total cost amount of all specified foreign property exceeds C$100,000 at any point in the year |
| Filing deadline | Same as the tax return deadline (generally 30 April, or 15 June for self-employed individuals) |
| Simplified reporting | Available if total cost is between C$100,000 and C$249,999 |
| Detailed reporting | Required if total cost is C$250,000 or more — must report each property individually with country, maximum cost, and income |
| Penalties for failure to file | C$25/day, up to C$2,500 per return; if the CRA issues a demand to file and the taxpayer fails to comply, the penalty rises to C$2,500 plus 5% of the cost amount of the foreign property, with a minimum of C$24,000 |
The SCD minimum investment of £20,000 (~C$36,800) alone will not trigger T1135 filing — but if the investor holds other foreign assets (U.S. stocks, foreign bank accounts, other foreign bonds) that bring the total above C$100,000, filing is required. A single investor with an SCD bond and a U.S.-domiciled brokerage account could easily exceed the threshold.
Currency & Payment
What is the currency risk?
SCD bonds are denominated in British pounds sterling (GBP). All interest payments and principal repayment will be made in GBP. A Canadian investor bears full currency (foreign exchange) risk:
- If GBP depreciates against CAD between the date of investment and the date of repayment, the CAD value of both interest and principal will be reduced
- Conversely, GBP appreciation would increase the CAD return
- There is no currency hedging provided with the bond
Historical context: GBP/CAD has fluctuated significantly in recent years — from approximately C$1.70 in early 2022 to below C$1.60 at points in 2024. A 10% currency movement in either direction would add or subtract roughly 10% from the investor’s CAD-denominated return, dwarfing the 3.5% annual interest rate.
How will interest and principal be paid?
Payments will be made in GBP by bank transfer. Details of the payment mechanism are set out in the bond offer document. Canadian investors should confirm with their bank that they can receive GBP wire transfers and understand any fees their bank may charge for receiving foreign currency payments and converting to CAD.
Risks
Is the bond secured?
It depends on the investment amount:
- Under £150,000 (~C$276,000): No security offered — the bond is unsecured
- £150,000 – £500,000 (~C$276,000 – C$920,000): Tertiary charge — ranks behind both the first and second charge holders
- Over £500,000 (~C$920,000): Secondary charge — ranks behind the first charge holder only
In the event of default, unsecured and tertiary charge bondholders are the last to be repaid and may lose some or all of their investment.
Can I sell or transfer the bond?
No. SCD bonds are non-transferable. There is no secondary market. The bond cannot be sold, assigned, or transferred to another party. The investment is illiquid — capital is locked in for the full term of the bond.
What happens if SCD defaults?
If SCD is unable to make interest payments or repay principal, bondholders’ recourse depends on the level of security:
- Secured bondholders (secondary or tertiary charge) have a legal claim on the underlying assets, but only after higher-priority charge holders have been satisfied
- Unsecured bondholders rely solely on SCD’s ability to pay and have no claim on specific assets
There is no deposit insurance (CDIC or equivalent) or government guarantee on this investment. Investors could lose some or all of their principal.
Key risks summarised
- Currency risk — GBP/CAD fluctuations can erode or enhance returns; historical volatility exceeds the interest rate
- Liquidity risk — bonds are non-transferable with no secondary market
- Credit risk — SCD may default; unsecured bonds have no asset backing
- Construction risk — the project has experienced contractor liquidation and repeated delays
- Interest rate risk — the fixed 3.5% rate may not keep pace with inflation
- Tax and regulatory risk — Canadian tax and reporting obligations are complex; T1135 penalties are severe
- Legal risk — the applicable Canadian prospectus exemption has not yet been confirmed; investment may not be possible for all Canadian persons
- No registered plan eligibility — unlike Canadian community bonds, SCD bonds cannot be held in RRSPs or TFSAs; interest is fully taxable
Co-operative Principles
The International Co-operative Alliance defines seven principles that guide co-operatives worldwide. SCD lives all seven — and this bond is Principle 6 in action.
| Principle | How SCD Lives It |
|---|---|
| 1. Voluntary & Open Membership | 200+ households applied; 20 selected; open to all who share the values |
| 2. Democratic Member Control | One member, one vote — residents and worker co-ops govern SCD |
| 3. Member Economic Participation | Members contribute capital through bonds; surplus reinvested in the community |
| 4. Autonomy & Independence | SCD is a non-profit Registered Provider, controlled by its members |
| 5. Education, Training & Information | Cookery school, cycle training, arts space — community education embedded in the building |
| 6. Co-operation Among Co-operatives | This bond is Principle 6 in action — international co-ops funding co-op development across borders |
| 7. Concern for Community | Community hub, café, hall — public access to co-operative life in Stirchley |
Comparable Projects
Community bonds for affordable housing are a proven model — and Canada leads the world. These projects demonstrate what is possible when co-operatives and communities raise capital together.
Indwell Community Homes — Hamilton, Ontario, Canada
Indwell is a charity that develops and operates supportive, affordable housing for vulnerable populations, supporting over 1,000 tenants across Southern and Southwestern Ontario. It offers five community bond series with minimums from $1,000 to $50,000, interest rates of 3.5%–5%, and 3 or 5-year terms. Series C ($10,000 minimum) is eligible to be held in RRSPs and TFSAs . The closest Canadian parallel to what SCD is building in Birmingham.
Leeds Community Homes — Leeds, UK
Raised £360,000 through a community share offer to purchase 16 permanently affordable homes. Supported by the Community Shares Booster Fund and Co-operatives UK. Demonstrated that community-led housing finance works at scale in the UK.
East Bay Permanent Real Estate Cooperative — Oakland, California, USA
Uses community bonds to finance affordable housing for low-income residents. A North American example of the same model — community-owned, permanently affordable, democratically governed.
Tapestry Community Capital — National, Canada
Not a housing project but the infrastructure behind many of them. Tapestry is Canada’s leading community bond platform, providing issuance, compliance, and investor management services to non-profits, charities, and co-ops . They have supported over $140 million in community bond issuances across Canada. Securities laws in every Canadian province and territory recognise community bonds and provide a prospectus exemption which allows qualified issuers to deal directly with investors .
How to Invest
- Download the Bond Offer Document (PDF)
- Review the Investment Step-by-Step Guide
- Consult your own legal, tax, and financial advisers — especially regarding:
- The applicable Canadian prospectus exemption (accredited investor or offering memorandum)
- Canadian tax reporting obligations (Form T1135, Line 12100, foreign tax credit)
- Currency risk and bank transfer logistics
- Contact SCD to confirm eligibility and discuss the investment process for Canadian persons
- Complete the application and arrange payment (in GBP)
Questions?
Contact SCD directly via the email address on the bond offer page. For Canada-specific legal or tax questions, consult your own qualified advisers — SCD cannot provide Canadian legal or tax advice.
Stirchley Co-operative Development Limited (Registration number 4496) is registered under the Co-operative and Community Benefit Societies Act 2014. SCD is a Registered Provider of Social Housing regulated by the Regulator of Social Housing in England.