Ottawa moves to strengthen venture and growth capital investment in Canada

They’re the kinds of software or AI suppliers you see on enterprise vendor shortlists.

Ottawa is putting $675 million behind later- and growth-stage Canadian companies, where access to enough capital can determine whether they can keep scaling here. 

Canadian firms need customers willing to move from pilot to IRL contract. Capital can help them grow, but it doesn’t answer the whole question.

What does it take to keep more homegrown companies scaling here?

What happened

Mélanie Joly, minister of industry, announced the $1.75-billion Venture and Growth Capital Plan in Toronto on Oct. 22. 

First, Joly shared the $1-billion Venture and Growth Capital Catalyst Initiative, with $700 million for a fund-of-funds stream (leveraging private venture capital), $200 million for life sciences, and $100 million for emerging fund managers, including those outside traditional venture hubs. 

She followed that announcement by unveiling the $750-million Early and Growth Stage Investment Strategy.

This strategy puts $75 million toward pre-seed and seed companies, and $675 million toward later-stage companies, to help them scale and remain in the country.

The Business Development Bank of Canada (BDC) will manage investments on the government’s behalf.

“We need to give entrepreneurs more options to access capital early, scale their businesses and keep them here,” says Isabelle Hudon, president and CEO, BDC.

Added Joly, “In a more complex and unpredictable global economy, Canada is investing in Canadian champions to compete globally, create jobs and strengthen Canada’s position as a leader in venture capital.”

The context, and why this matters now

Both the catalyst initiative and investment strategy were funded in Budget 2025. 

According to the government’s backgrounder, previous federal venture programs invested $1.2 billion, which helped fund managers raise $3.7 billion, and supported more than $6.4 billion in investment in Canadian companies.

Capital is just one piece of the puzzle keeping a company building in Canada.

In June, Startup Genome CEO JF Gauthier argued that governments need to “stimulate local corporate demand” by connecting startups with corporations willing to become early customers.

That makes procurement part of the growth story too. A company can raise capital, but somebody still has to buy what it is selling.

Your move, enterprise buyers.