{"id":891238,"date":"2026-10-22T21:52:11","date_gmt":"2026-10-22T21:52:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/891238\/"},"modified":"2026-10-22T21:52:11","modified_gmt":"2026-10-22T21:52:11","slug":"ottawa-kicks-off-process-to-give-1-75-billion-boost-to-venture-capital-sector","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/891238\/","title":{"rendered":"Ottawa kicks off process to give $1.75-billion boost to venture capital sector"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Industry Minister M\u00e9lanie Joly speaks during a news conference in Toronto last month. She is set to announce on Thursday how Ottawa will allot $1.75-billion to support the VC sector.Arlyn McAdorey\/The Canadian Press<\/p>\n

The federal government kicked off a long-awaited process Thursday to inject $1.75-billion in fresh money into Canada\u2019s venture capital industry to fund fast-growing startups, part of a broader effort led by Prime Minister Mark Carney to bolster Canada\u2019s economic independence and growth at a time of global uncertainty.<\/p>\n

\u201cCanada needs to do two things at once right now,\u201d said Industry Minister M\u00e9lanie Joly at a press conference at the Toronto headquarters of Waabi Innnovation Inc., which has raised venture capital from Canadian and foreign investors. In addition to defending traditional industries targeted by U.S. President Donald Trump\u2019s trade war, \u201cwe also need to move from defence to offence\u201d by backing \u201cthe companies that will drive our prosperity tomorrow.\u201d<\/p>\n

Last November\u2019s budget proposed $1-billion over three years for Business Development Bank of Canada (BDC) to launch the fourth iteration of a venture capital (VC) support program started by Stephen Harper\u2019s Conservative government 13 years ago, recommitting an amount first proposed in the December, 2024, fall economic statement when Justin Trudeau was prime minister. The latest version of the program, called Venture and Growth Capital Catalyst Initiative (VGCCI), is much larger than its three predecessors, which ranged in size from $390-million to $450-million.<\/p>\n

The budget also proposed $750-million for a new program \u201cto support Canadian firms facing early growth-stage funding gaps.\u201d <\/p>\n

Third startup group joins battle to convince Ottawa how to spend $750-million on innovation<\/a><\/p>\n

Ms. Joly said VGCCI would include a $700-million allotment to \u201cfunds-of-funds\u201d managers \u2013 funds that finance VC firms, which in turn back growing companies directly. Like its predecessors, VGCCI funding comes on condition that recipient funds-of-funds raise matching capital from private investors \u2013 $3 for every $1 from Ottawa. <\/p>\n

The government money is an investment, not a grant, though Ottawa only gets its share of returns after fellow investors are paid out.<\/p>\n

VGCCI is also committing $200-million to domestic VC fund managers that back Canadian life sciences companies and $100-million for emerging, or less-seasoned, fund managers, particularly those focused on strategic sectors or located outside traditional VC hubs. Those recipients will need to raise at least $1 for every $1 from government.<\/p>\n

Under the new $750-million program, government will provide $675-million through BDC to Canadian investors that fund later-stage domestic companies to help them \u201cscale and remain anchored\u201d here, plus $75-million to support nascent companies that are raising seed- or even earlier-stage financing. <\/p>\n

The size and scope of that $75-million commitment is a setback for the National Angel Capital Organization, which represents angel and other early-stage investors. It had pressed Ottawa with $750-million work of asks to fix what it said was a huge funding gap at the earliest stages. NACO called for $500-million to match investments made by early-stage financiers, plus $250-million to fund \u201coperational infrastructure\u201d to help \u201cstabilize and professionalize\u201d investors.<\/p>\n

Private investors, founders, urge Canada to remove barriers to attract foreign capital<\/a><\/p>\n

Nonetheless, NACO chief executive officer Claudio Rojas said in an interview: \u201cWe see this as being a positive development and a starting point,\u201d that could lead to further support. <\/p>\n

The government also faces questions about how quickly it can get the money moving. It kicked off a call Thursday for expressions of interest for the $700-million fund-of-funds program; applicants have three months to apply. Previous programs have moved slowly, frustrating industry participants, taking 18 months from budget announcement to selection of fund managers. It\u2019s now 22 months since the federal government first announced the $1-billion funding for VGCCI, and the winners likely won\u2019t be chosen until spring 2027.<\/p>\n

Benjamin Bergen, CEO of the Canadian Venture Capital and Private Equity Association (CVCA), urged the government to move quickly and enable fund managers \u201cto raise on market schedules\u201d rather than political timelines. He suggested Ottawa could create perpetual \u201cevergreen\u201d funds like those in Britain and Germany that wouldn\u2019t be subject to sluggish government process. Ms. Joly told the The Globe and Mail she was \u201calways open to new ideas\u201d including such a structure. <\/p>\n

Four funds-of-funds have received money under VGCCI\u2019s predecessor programs: Teralys Capital of Montreal, Toronto-based Northleaf Capital and Kensington Capital, and the Canadian arm of Boston-based HarbourVest Partners. HarbourVest managing partner John Toomey last month called the funding initiative \u201cone of the most successful public-private projects on the planet,\u201d during a CVCA event in Toronto during the week of Mr. Carney\u2019s Canada Investment Summit.<\/p>\n

As for the new $750-million initiative, the government is only now seeking stakeholder input for its proposed program design. <\/p>\n

There could also be continued debate about how much and for how long the government should continue to bankroll private capital providers. Some Canadian funds, including Radical Ventures, Vistara Growth and Plaza Ventures, have thrived without drawing any support from VGCCI\u2019s predecessors. Ms. Joly said she believed governments \u201chave a greater role to play\u201d intervening in markets as an investor, financier, customer and support. <\/p>\n

VGCCI\u2019s progenitor program was devised to rebuild the VC sector by luring pension funds and other institutional investors back to the domestic VC space after they retreated in the late 2000s. But the \u201cMaple 8\u2033 – Canada\u2019s largest pension fund managers, including Canada Pension Plan Investment Board – still face criticism for not funding the domestic venture capital sector as much as many would like.<\/p>\n

Ms. Joly addressed the giant funds directly, urging them during her remarks to back promising Canadian companies in such areas as artificial intelligence, quantum computing life sciences and advanced manufacturing. (Several pension funds have backed Canadian quantum developers). \u201cOur entrepreneurs are ready to be bold, our government is ready to be bold,\u201d she said. \u201cThe question is, are you?\u201d<\/p>\n

But behind the scenes, Ms. Joly and her officials have been pressing the Maple 8 to participate in the VC programs. She told The Globe said she\u2019d spoken with several in recent months and suggested some could jointly form a fund-of-funds to access the matching government funding. \u201cI think we\u2019ll have good news in the coming weeks regarding that,\u201d she said. \u201cI\u2019m very optimistic\u201d they will participate.<\/p>\n

Many industry participants have credited the program with helping to rebuild a domestic early-stage funding market that posted poor returns through the 2000s before being decimated by the credit crisis and 2008-09 recession. <\/p>\n

That rebuilding effort is required again, some industry observers say. The amount of VC financing deals and dollars raised by domestic fund managers has declined since 2021, and there remain notable homegrown financing gaps for young companies from early to late stages, say industry observers. <\/p>\n

\u201cWithout deeper pools of local capital and more effective exit pathways, Canada risks capturing only a fraction of the economic value generated by its most promising companies,\u201d BDC said in a May report on the VC industry.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Industry Minister M\u00e9lanie Joly speaks during a news conference in Toronto last month.…\n","protected":false},"author":2,"featured_media":891239,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[2428,2416,2429,4,2408,2430,28,103,2407,2422,2423,2418,2409,2406,101,526,158,192,2421,2414,2441,2410,2411,2420,2417,149,983,2431,2413,2436,2437,2439,2434,2438,2432,2435,2412,2425,2426,111,2424,2433,2415,74,2427,2419,194,965,2440],"class_list":["post-891238","post","type-post","status-publish","format-standard","has-post-thumbnail","category-entrepreneurship","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-entrepreneurship","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/891238","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=891238"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/891238\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/891239"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=891238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=891238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=891238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}