Thank you, Mr. Chair and committee members.
My name is Julia Deans, and I'm the CEO of the Canadian Youth Business Foundation.
We're a national not-for-profit organization. We were established in 1996 to help young Canadian entrepreneurs launch successful businesses. We have a successful track record of advancing economic growth by supporting young entrepreneurs as they build businesses, and also in developing the entrepreneurial skills that will help them in whatever career path they pick.
In brief, we help Canadians ages 18 to 39 develop a strong business plan; only 10% of them have one when they come to us. We then provide them with loan financing, mentors, business resources, and networks, to help them navigate the initial years of their start-up. We have seven offices coast to coast, and we work with over 200 community partners in more than 1,400 communities across Canada.
As the minister said, to date we've invested in 5,600 Canadian entrepreneurs and engaged 4,000 volunteer mentors to help them. These businesses have created 22,100 jobs and $155 million in tax revenue. The federal government has been a key partner, and this budget will help more young entrepreneurs start more businesses.
I joined CYBF four months ago because I see it as a terrific model for building jobs and futures for young Canadians, with potential for much greater impact. We currently help probably 2% to 3% of the potential youth entrepreneur market, and our goal is to double that in the next five years.
In addition to helping young Canadians realize their entrepreneurial potential and building our economy, supporting youth start-ups responds to other economic challenges. One of these is youth unemployment, which currently sits at around 15%. That is twice the national unemployment average. Youth entrepreneurs create jobs for themselves and they also hire others. Harry Chemko, a young Vancouver-based entrepreneur, started his IT business with a $15,000 loan from CYBF. He now has about 350 staff serving billion-dollar corporate clients worldwide, and he recently handled all of the merchandise for the Winter Olympics.
Another huge challenge is the expected retirement of 66% of our small business owners by 2016, according to the CFIB. This is particularly a problem for rural communities, many of which face the loss of businesses that are key to their vitality. It also drives up costs for everybody else. For example, a Nova Scotia government official told me that the shortage of HVAC businesses outside of Halifax means that every construction project requires Halifax-based technicians to travel and stay in hotels.
Youth entrepreneurs are well poised to succeed retiring business owners, but they need help to get launched. As you can suspect, the single biggest obstacle for new entrepreneurs is accessing sufficient start-up capital. This is really hard for young people in particular. They don't have assets to pledge as security for loans or the networks to tap into for funding.
Unlike banks, CYBF does not require collateral. We look at the young entrepreneur's character and at their business plan. The entrepreneur can receive a loan of up to $15,000 from us. It's repayable over five years at rates slightly less than commercial bank rates, and interest only is payable in the first year. Based on our strong track record and the high repayment rate from our entrepreneurs, the Business Development Bank of Canada will extend a further $30,000 loan, and then mainstream banks will take notice.
You can imagine that most entrepreneurs focus mainly on getting the money, but good planning, management, and advice are what mitigate their failure in the first few years. CYBF entrepreneurs call our full suite of pre-launch coaching, our two-year mentoring program, access to entrepreneurs and residents, networking events, and other supports the quadruple bypass surgery they didn't know they needed. This is what leads them to have higher success rates than the national average for start-ups.
In addition to our core major start-up program, we have several programs that are aimed at helping particular groups of entrepreneurs, including newcomers, transitioning Canadian Forces members, high-potential growth entrepreneurs in the innovation space, and those preparing for export. We also offer a stand-alone six-month mentoring program for young entrepreneurs who don't need financing.
Based on our track record, CYBF and Canada have been recognized as global leaders in advancing youth entrepreneurship. We represent Canada on a number of international alliances, including one that parallels the G-20. We are really proud to have been a trusted partner of the Government of Canada for the past 12 years, and we've successfully leveraged federal investments to attract additional funds from provincial governments and also from the corporate sector.
We truly appreciate the government's belief in us and the decision to invest $18 million over the next two years to help more young entrepreneurs launch and succeed in Canada.
I very much appreciate the opportunity to speak with you about CYBF in person today. Thank you.