CVCA Responds to Budget 2017
The CVCA applauds Government of Canada’s commitment to strengthen Canadian innovation through additional venture capital support
Budget 2017 continues positive momentum for the private capital ecosystem in Canada; expanding on the success of VCAP, with new VCCI program delivering $400 million investment with matching funds up to $1.5 billion through BDC
Ottawa, ON – Mar 22, 2017 – The Canadian Venture Capital and Private Equity Association (CVCA) is pleased with the contents of the 2017 federal budget; particularly, a much needed $400 million investment supporting Canada’s innovation ecosystem through the new Venture Capital Catalyst Initiative (VCCI).
Today’s federal budget demonstrates the government’s assurance in strengthening the private capital sector to support innovative and high-growth Canadian businesses. By supporting BDC in its efforts to strengthen the private capital ecosystem in Canada; specifically venture capital, the government will be assisting in the development of a profitable, globally competitive and self-sustaining innovation industry.
“We are thrilled to have the government’s continued support,” said Mike Woollatt, CEO of the Canadian Venture Capital and Private Equity Association. “While we have some work to do in a review going forward as to the best way forward for VCCI, we are very pleased with an initiative like this specifically designed to catalyse Canadian venture capital.”
The VCCI has been announced off the heels of the successful Venture Capital Action Plan (VCAP) program. VCAP was implemented to leverage government funds with private sector investment and expertise; generating a significant and sustainable impact on the Canadian innovation ecosystem. The first set of funds were due to be fully committed within the next year. As a result, a renewal of a similar program was required.
Through private sector leverage, VCAP funds thus far have provided billions of dollars into hundreds of Canadian companies; exposing the Canadian innovation ecosystem, including venture capital, entrepreneurs, and technology to a whole new and returning set of investors and customers – a key step towards sustainability of the entire ecosystem. Not only are programs like the new VCCI integral in supporting the Canadian economy, if designed properly, will provide attractive returns to the government and Canadian taxpayers.
Support for venture capital produces a ripple effect through Canada’s economy. Government support addresses a key gap in the Canadian innovation ecosystem; funding promising Canadian businesses while creating high quality jobs, research and development, nurturing sales and growth, and attracting international investment.
Venture capital investment brings more than just the much-needed capital – venture capitalists’ posses the knowledge, experience and contacts that help their investments in Canadian businesses thrive.
We are also pleased to see that the tax expenditure review exercise has maintained those measures intended to support innovation and investment. The CVCA will continue to make this case through the ongoing review of tax expenditures that increases in taxes on investment is not the way forward.