The Canadian Venture Capital Association (CVCA) recently made
its Submission to the Federal Government's Innovation and
Growth Agenda (the "Submission"). The
Submission responds to a call made earlier this year by the
Minister of Innovation, Science and Economic Development for input
from Canadians on six areas of action relating to entrepreneurship,
growth, and productivity. This input will be used to develop the
Minister's Inclusive Innovation Agenda and give effect to his
vision of Canada as a global centre of innovation.
The CVCA represents individuals and firms participating in the
venture capital and private equity industry, and seeks to increase
industry awareness through market research and networking
opportunities. CVCA members invest in and mentor Canadian companies
across innovation and growth sectors.
In preparing the Submission, the CVCA held a series of
roundtables and consulted with hundreds of industry participants.
The Submission considers (i) the contribution of venture capital
and private equity to innovation, productivity gains and growth in
Canada and the U.S.; (ii) gaps between the Canadian and U.S.
venture capital landscape; and (iii) recommendations to enhance
Canada's innovation and growth agenda.
Venture Capital Action Plan 2.0
A key recommendation of the Submission addresses financing
problems for high growth innovative companies and proposes that the
government establish a second phase of the Venture Capital Action
Plan (VCAP) referred to in the Submission as "VCAP 2.0".
VCAP successfully attracted private capital to the venture capital
industry. VCAP 2.0 would, according to the CVCA, reinforce the
financing chain and provide the continuity needed for scale-ups and
increased self-sustainability in the Canadian venture capital
As part of VCAP 2.0, the Submission suggests that the government
(i) identify performing managers funded by VCAP to help move them
forward; (ii) support larger funds and special growth funds to
scale-up companies; and (iii) embrace new managers to build the
industry. To preserve the foundational progress made, the
Submission insists that VCAP 2.0 be implemented before 2018, as
VCAP will be fully committed by mid-2017.
Talent and Immigration
Another key recommendation from the Submission concentrates on
the problem of a talent shortage in management, sales and
marketing, engineering and product management, and suggests
possible changes to our immigration laws as a solution.
The Submission encourages the government to reflect on and
re-evaluate the process by which work permits are delivered to
non-residents in innovative sectors, and to revisit the
requirements for work permit and landed immigrant status in certain
circumstances. The CVCA suggests that refining the work permit
process might prevent more companies from leaving Canada to access
better quality talent.
Additional recommendations in the Submission include enhancing
tax incentives for venture capital investments, prioritizing
investment in cleantech companies, developing talent in Canada,
expanding corporate involvement in the Canadian innovation
ecosystem and upgrading our digital infrastructure.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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