Evidence of meeting #29 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 bdc.
A recording is available from Parliament.
Liberal
Vice-President , Market Development, BDC Capital, Business Development Bank of Canada (BDC)
I'll have to get you the correct number. I know that between the notes that they write directly into companies, and in the incubators and accelerators, it's well over $10 million, or something like that.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Okay.
I have one quick last one, and I know I'm stealing a quick question. I'd like to know the percentage of the venture capital that BDC is providing to date in the Canadian market compared to the rest of the venture capital market, and if you have historical values as well. I'm sure 20 years ago you were more needed, or maybe you were less needed—I don't know—but I want to know BDC's percentage today of the entire VC fund market and any historical data as well.
Thank you, Mr. Hill.
Vice-President , Market Development, BDC Capital, Business Development Bank of Canada (BDC)
I'm happy to get that for you.
Liberal
The Chair Liberal Dan Ruimy
You'll be happy to know you stole time from Mr. Jowhari.
You now have two minutes, and Mr. Masse will have the last two minutes. Thank you.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Okay, thank you, Mr. Chair.
Thank you to the witnesses.
With my two minutes, I'm going to go right to the question.
You are all familiar, and we are all familiar, with the different stages that a small company goes through to its maturity. We have a stage that's called “valley of death”. I assume some of those organizations start with you in their initial stage of start-up.
Can you shed some light, with the study that you've done, on what some of the causes have been? How are you helping those companies at that stage of growth to be able to survive that and hopefully partner with BDC and expand?
Vice-President , Market Development, BDC Capital, Business Development Bank of Canada (BDC)
Sure.
Depending on who you talk to in the industry, there are arguably two valleys of death. One is from the seed to the series A stage, which is going from very early proof of concept to a functioning business. In some markets that is a problem. The one that we focused on most recently in our study was the growth-stage valley of death, which is going from a $5-million or $10-million run rate, right up to a $50-million or $100-million run rate.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
You touched on some of it when you were answering Mr. Arya's question.
Vice-President , Market Development, BDC Capital, Business Development Bank of Canada (BDC)
Yes. We've created a pool of capital within our fund of funds group, which is dedicated to either co-investing with the funds outside of BDC or investing directly in those growth-stage companies. We've put aside what I think is targeted to be about $100 million over the next five years to invest specifically in those promising growth-stage companies that need capital from within Canada. That's because often even the best ones can get capital, but if they get it all from outside of Canada, their future may end up there as well.
Vice-President , Market Development, BDC Capital, Business Development Bank of Canada (BDC)
We've targeted money specifically there, and we've tried to identify funds that address that segment as well.
Liberal
The Chair Liberal Dan Ruimy
Thank you.
Finally, we've come to the last two minutes. Mr. Masse, it's all yours.
NDP
Brian Masse NDP Windsor West, ON
How much of a dividend did BDC provide the federal government last year?
NDP
Brian Masse NDP Windsor West, ON
It was around $60 million.
Is it legislated that you have to have a return at all?
Vice-President, Partnerships and Government Relations, Business Development Bank of Canada (BDC)
When our mandate was changed in 1995 from lender of last resort to complementary lender, Treasury Board said we ought to be sustainable over the economic cycle.
Vice-President, Partnerships and Government Relations, Business Development Bank of Canada (BDC)
I'll just add that within our law, our eligibility criteria are such that we have to finance viable businesses. I'm paraphrasing, but section 14 talks about an entrepreneur having a stake in the business that we finance and various other eligibility criteria that make it such that it is a sustainable business.
We are a sustainable organization.
Liberal
The Chair Liberal Dan Ruimy
That's excellent. Outstanding.
Thank you all from BDC—Susan Rohac, Neal Hill, and Karen Kastner—for coming back and answering our questions.
Thank you, everybody. We'll see you all on Wednesday. Remember, we're at Centre Block.
The meeting is adjourned.