Addressing Canada's Commercialization Crisis and Shortage of Venture Capital: Will the Federal Government’s Solution Work?

Abstract

Lack of funding is a major challenge to innovation in Canada’s emerging technology industry. This article will focus on this supply-side challenge within the complex venture capital ecosystem and discuss: i) the current shortage of venture capital available to commercialize Canada’s R&D; ii) the causes and consequences of that venture capital shortage; iii) how the federal government will address this shortage through its innovative 2013 Venture Capital Action Plan, which commits $400 million and seeks to raise at least another $800 million from outside investors; and iv) how a separate decision in the federal 2013 budget to phase out federal tax credits for labour-sponsored venture capital funds could imperil the 2013 Venture Capital Action Plan.

Keywords

• 2013 Venture Capital Action Plan
• Canada
• commercialization
• labour-sponsored venture capital corporations
• VC
• venture capital