REPORT ON A UNIFIED CAPITAL STRATEGY FOR A SOVEREIGN INNOVATION ECONOMY Executive Summary Canada can unlock $10–15 billion in additional private capital and generate 35,000–72,000 new high-value jobs over five years. By implementing the four policy recommendations in this report, grounded in evidence from British Columbia and international best practices, we can significantly augment the flow of private capital and move closer to the UK’s level of innovation intensity, increasing our venture capital investment to 1.0% of GDP over time, while strengthening our economic sovereignty. For more details, see “Appendix A: Methodological Justification for Unified Capital Strategy Outcomes”. Canada's innovation economy faces a critical constraint at the early stages of company formation, driven by fragmented and insufficient risk capital supply. Venture capital has grown impressively over the past decade. However, systemic gaps in early-stage funding limit the pipeline of investment-ready companies. Left unaddressed, this structural weakness undermines national productivity, global competitiveness, and economic independence.
This report proposes a cohesive, evidence-based policy framework—anchored by four policy recommendations (see “ Policy Recommendations ” section for details):
#1 Increase capital supply with a National Investment Tax Credit (NITC) #2 Enhance capital deployment with a Sovereign Capital Catalyst Initiative (SCCI) #3 Accelerate capital momentum with a Strategic Capital Gains Deferral (SCGD) #4 Establish national infrastructure with an Entrepreneurial Capital Investment Program (ECIP) Together, these mechanisms form a high-impact, fiscally efficient strategy to accelerate early-stage investment, retain Canadian ownership of strategic assets, and mobilize unprecedented levels of private capital. Mobilizing just 0.5% of Canada’s approximately C$2 trillion in wealth management assets would unlock C$10 billion in new investment (see Appendix C). Evidence from British Columbia’s investment tax credit program, delivering nearly C$3 in tax revenue for every C$1 in tax credit issued, demonstrates the potential public return. Participating firms also generated strong employment outcomes, particularly in urban centres like Greater Vancouver, where companies added more than three jobs annually on average and created over two jobs for every C$10,000 in tax credits.
A unified national approach that strengthens the supply, deployment, and recycling of capital is far more likely to deliver the transformative outcomes Canada urgently needs.
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