Public Accounts Committee on Sept. 29th, 2016

[Neal Hill]

Thank you.

You used the word “incremental” to the space. That is one of the discussions around the program, because its intent was to generate incremental capital for venture capital investing in Canada. From speaking to the four fund-of-funds managers who bore the brunt of the fundraising, the $904 million in private sector capital that's come in, their feeling is that at least two-thirds of the private dollars that came into their funds is net new money to the Canadian venture capital ecosystem, and that had it not been for this program, it would have not gone to Canadian venture capital.

Beyond that, I can't speak to it.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

I have a question coming from our analysts. I don't want to make it sound like it's my question. This is just for a little clearer input, I think, for our report.

Perhaps Mr. Hill or Mr. Botham could answer. The government and the private sector industries are getting information about the rate of return and the list of companies, but Parliament is not. Why is that the case?

[Richard Botham]

I'm going to have to defer to my colleagues on the list of companies. I'm not sure. But on the rate of return, there is no calculation right now of the rate of return. It is a dynamic concept. I'm not sure what to do with that, actually. Is there some point at which...? There certainly is some point at which there would be a reporting on rate of return.

Go ahead, Neal.

[The Chair, Conservative, Kevin Sorenson]

Mr. Hill.

[Neal Hill]

Sure, thanks.

We're using industry standard measurements of fund performance. They're called TVPI, total value to paid in capital, and distributed to paid-in capital. I don't mean to get into jargon.

We are reporting on the financial performance of the funds, and that will certainly be part of the annual report to the performance management framework that Innovation, Science and Economic Development is responsible for compiling and providing. I'm assuming that will get to Parliament as it gets to everyone else.

Within that, though, the list of companies actually is a bit of a touchy matter because, if any of you have dealt with early-stage entrepreneurs, you know they are often very jealous of the quality and sensitivity of their idea. The investment funds that invest in these companies often have a confidentiality agreement with those companies that they cannot even disclose that they have invested in those companies.

[The Chair, Conservative, Kevin Sorenson]

But other private sector companies would perhaps get the information, as would the government. Is that correct?

[Neal Hill]

There are some exceptions even for the private sector investors. Anything the private investors get, we can get access to through the program, and we will provide that. I'm just saying that there are instances where the list of companies might not be complete because of a confidentiality situation.

[The Chair, Conservative, Kevin Sorenson]

All right. Thank you.

For some of the questions today, like the last one that has taken a fair bit of thought, you may want to respond in writing with an answer to better express your thoughts. That might help us understand a little more clearly. We would encourage you to do that if there is something that triggers you on the way home.

The other thing, Mr. Padfield, is that you also talked a bit about the performance management framework. If it would be possible for our committee to get a copy of that sent to our clerks or analysts, we would certainly appreciate that.

I want to thank you for coming. For the layman, this is very difficult. Regarding the viewership out there across the country, I'm not certain how many people would be watching the technical aspect of venture capital investment. For the people involved in the industry, they may find it very interesting. Start-up programs and new entrepreneurs may find this very interesting. I certainly recognize that we have a panel of experts here today, and we thank you all for your input.

To our Auditor General, thank you for doing a good job on this report. We look forward to seeing you again.

Thank you very much.

We will take a two-minute recess. You can say goodbye to our guests, then we would invite our friends from around the world, other auditors and auditors general from other countries, to come up here. We'd like to meet you and perhaps get a picture with you. We'll recess for two minutes.

[The Chair, Conservative, Kevin Sorenson]

We've had a good meeting. It's been a public meeting, and we are now going to adjourn and we will meet our friends from Cameroon, Ghana, and Vietnam.

The meeting is adjourned.