3.3 Sustainability of Capital: Follow the Investors ● Locality of Capital : When early-stage investment is local, companies are more likely to stay, grow, and reinvest within the Canadian economy. ● Sophistication of Capital : Investors with strong training, experience, and incentives make better deals, reduce founder burden, and accelerate success. ● Connectivity of Capital : Syndication networks and cross-regional partnerships are underdeveloped. National-scale coordination is needed to ensure risk-sharing and full deal flow coverage. 4. Policy Recommendation: A National Investment Tax Credit We propose the creation of a 30% federal investment tax credit for qualified investments in Canadian-controlled innovation companies. This would: ● De-risk early-stage investments for individuals and institutions ● Drive participation in angel and seed-stage rounds ● Support national investment syndication and increase pan-regional capital flow 4.1 Key Design Elements: ● Eligibility for Canadian-controlled private corporations (CCPCs) engaged in R&D and innovation ● Annual cap to ensure fiscal discipline with room for expansion based on uptake ● Stacking compatibility with provincial programs ● Delivery through CRA with real-time verification and tracking 4.2 Expected National Outcomes Over Five Years: ● Based on British Columbia’s program, where companies generated nearly $3 in tax revenue for every $1 in tax credit, a similar ratio at the national scale could deliver a strong return to the public treasury. ● 35,000–72,000 high-value jobs created . This estimate draws from BC’s actual job creation experience, where companies supported by tax credits added about 2.4 jobs annually per firm. On a federal scale, this would represent a major employment boost. ● 6:1 private-to-public capital mobilization ratio . In BC, every dollar of tax-supported capital drew in about $3.76 of additional private equity and $1.15 in debt. This level of leverage is well within reach based on real-world Canadian experience. While this is based on BC’s historical experience, ongoing monitoring will be needed to ensure similar results nationally.
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