Evidence of meeting #10 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A recording is available from Parliament.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Then, to the same point, you do have a budget for the next few years, so would you be looking at whether this would be part of your strategic investments in the northern economic development program, so there's a chance that it could tie into that as well?
President, Canadian Northern Economic Development Agency
Certainly, yes. It would be.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Great. Thank you.
Perhaps Mr. Lobb has a question.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
My question is on community futures. I know there's been a lot of work and review through the years on community futures. I know that in my area we have three community futures offices that span three different counties. Going forward, could you just highlight, maybe in a minute, some of the great opportunities for community futures to grow our areas?
Vice-President, Business Innovation and Community Development, Federal Economic Development Agency for Southern Ontario
As you know really well, the community futures development corporations all have different strategic plans and different priorities. We're trying to work very closely with them, to enable and empower them through our annual funding, to support their undertakings and their efforts from that perspective. We see this as an opportunity. There's an opportunity as well for us as a federal family, and also by working with the provincial government, to try to do a better job in connecting the communities and the various regions with the various tools and instruments from within the Government of Canada. For example, in the last year we've been working very closely with the BDC to try to increase the relationship and the partnership with the various CFDCs and the BDC, in order to make sure there's better collaboration and partnership among the various organizations, so the communities are in a better position to leverage the various programs, the various funding opportunities, and the various tools the BDC has to offer.
Liberal
NDP
Cheryl Hardcastle NDP Windsor—Tecumseh, ON
I was just interested in hearing a bit more about the lack of access to risk capital. I don't know if there is a then and now, or if you have some insights. If those have been identified, what's the game plan? I ask because it's a big issue. Why, as compared to when...? Do you have any observations to make generally about that?
Director General, FedNor (Federal Economic Development Initiative in Northern Ontario), Department of Industry
I'll start taking a first shot at it. Clearly, in the jurisdiction that FedNor serves, we don't have the traditional lenders in all of our small communities. Therefore, CFDCs—and Alain was referring to their mandate—play an extremely important role in providing higher risk capital to small and medium-sized enterprises in the regions they serve. They do so, however, in partnership with BDC. Wherever they can, they do so in partnership with the banks. We hear all too often from the traditional lenders that it's a great project, but it's in the wrong direction, that the risk is too high and they won't approve it.
When a CFDC provides that assistance, or FedNor through its own private sector programming, then the loan, particularly from the CFDCs, becomes bankable. They then sell the deal to the banks, which is our way of trying to attract the banking community back into making loans in our small communities in northern Ontario—for small SMEs they would otherwise never consider.
Vice-President, Business Innovation and Community Development, Federal Economic Development Agency for Southern Ontario
To supplement what Aime was talking about in terms of financing on top of that provided by the CFDCs, access to capital is key for a firm's ability to grow and to scale up.
We have a program within the agency that is called investing in business innovation. On one end, the program supports early stage companies and provides them with access to capital. One of the conditions of the program is to ensure that those companies come forward with matching funds from angel investors or venture capitalists. It allows that firm to leverage additional funding from private investors to provide them with more capital to support their growth and their ability to scale up. In that case, for example, it could be to support a firm's ability to put forward a marketing strategy and an expansion in very specific markets.
What we've done as well is to work with the various angel organizations, such as NACO, the National Angel Corporation Organization, to try to find ways in which they could increase their membership or their capacity to find and accredit professional angel investors to have more capital available in the market. Providing support to NACO has allowed them to increase the number of accredited members they have who are now professional accredited angel investors, which in return allows them to increase the amount of angel capital available for the market and for those firms.
NDP
Cheryl Hardcastle NDP Windsor—Tecumseh, ON
If I understand you correctly, then, the lack of access is because these private investors aren't willing...whether they're angels or not. That's why there's a lack of access.
I'm just going by lack of access to risk capital, as compared to when? Why is there a lack now?
Associate Assistant Deputy Minister, Strategic Policy Sector, Department of Industry
That's a challenge that faces a number of economies.
In terms of Canada, we're a small market. Attracting capital is often a challenge for businesses in the same way that attracting skilled talent is a challenge. The government has created a fund through the Department of Finance, I believe, at around $60 million to make more venture capital available to the private sector. However, I don't think there will ever be an instance where you have enough venture capital in the marketplace; I think it's simply a challenge that you continue to work on, the same as it is with having enough talented employees.
Where it has become critical, and where the innovation agenda the minister has focused on tackling, is around firms that are aiming to commercialize.
If you look at the record, because we create a lot of start-ups, the challenge is having those firms grow up. That's where the government has been signalling that there's going to be an enhanced partnership between government and the private sector, to enable those firms to grow. I believe the budget set a target of supporting 1,000 high-growth firms. That is an area where we share the diagnostic that you've raised today, and it's going to be a core element of the agenda going forward,
Liberal
The Chair Liberal Dan Ruimy
Thank you very much.
That takes us to the conclusion. I'd like to thank all of our guests today.
Your input is very much appreciated.
We're going to suspend while we clear the room. Then we'll come back for our last 15 minutes in camera.
[Proceedings continue in camera]