Stephen Harper, state venture capitalist
By Stephen Gordon - Monday, January 14, 2013 - 0 Comments
(Ryan Remiorz/CP)
To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead.
Prime Minister Stephen Harper, December 7, 2012
We will provide the resources needed to put Canada’s venture capital industry on the path to sustainability and ensure Canada’s high-potential firms have the resources they need to succeed.
Prime Minister Stephen Harper, January 14, 2013
Today’s announcement of the Venture Capital Action Plan (VCAP) is a great example of a policy solution in search of a problem. In point of fact, the Prime Minister’s announcement didn’t actually explain what the problem was that the new program was to solve; that was left to the press release issued by Canada’s Venture Capital and Private Equity Association (CVCA):
[T]he domestic pool of capital allocated and available for venture capital has decreased and significantly lags the demand for venture capital, and as a result, far-reaching measures, such as those announced today, are called for
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Canada: A tech leper no longer?
By Chris Sorensen - Thursday, April 1, 2010 at 9:00 AM - 4 Comments
Easing rules on U.S. backers could be a boon to tech start-ups
Photograph by Mike Cassese/ Reuters
There has been plenty of hand-wringing about the need for Canada to develop a high-tech economy, one that encourages entrepreneurs to follow in the footsteps of Mike Lazaridis and Jim Balsillie, who built BlackBerry-maker Research in Motion into a global success story. But the effort has been long on talk and short on action. Until now. The Conservative government has finally taken a hatchet to some of the red tape that prevents budding young companies from accessing sufficient U.S. venture capital, the lifeblood of start-ups.
Previously, U.S. venture capital firms were forced to complete untold hours of tedious paperwork every time they wanted to cash out of a Canadian company and realize any profits. Section 116 of the tax code withheld 25 per cent of the returns from the sale of any company backed by American venture capital funds until each investor—which could number in the thousands—proved they were a foreign citizen. The process, which isn’t applied to Canadian venture capital firms investing in the U.S., routinely held up the sale process by several months, or even years, driving away potential investors.
Michael Arrington, a prominent American technology blogger, commended Ottawa’s move by suggesting Canada has finally become “less of a leper colony for tech entrepreneurs.” He wasn’t kidding. Deal activity in the venture capital market last year fell to its lowest level since the mid-1990s, according to the Canadian Venture Capital and Private Equity Association. Roughly $1 billion was invested across the county in 2009, down nearly 27 per cent from a year earlier. At the same time, the average Canadian firm with venture capital backing received about $3.1 million last year, less than 40 per cent of the dollars poured into their American counterparts. So while the federal government has taken an important step toward closing the gap, it will be some time before we can truly consider Canada a Silicon Valley of the North.
