The BDC, a crown corporation, has a mandate to support Canadian entrepreneurship, with a particular focus on SMEs. It offers direct lending, growth and transition capital, venture capital (VC), securitization, and advisory services. It offers financing products and advisory services that complement those available from private sector providers. It also fulfils a countercyclical role, increasing its support for Canadian entrepreneurs during times of economic turmoil. In response to the COVID-19 pandemic, the BDC increased its direct lending activities tenfold by leveraging its online financing platform and new working capital loans. As of March 31, 2022, the BDC had CAD 47.8 billion committed to 95 000 entrepreneurs. As the most active VC investor in Canada, the BDC invests both directly into firms and indirectly through external VC funds, with the objective of making Canadian VC a financially viable and attractive asset class for private sector investors and institutional investors like pension funds.
The Government of Canada has further supported the development Canada’s VC ecosystem by convening public, private, and institutional sources of financing through its Venture Capital Action Plan (VCAP) and Venture Capital Catalyst Initiative (VCCI). Taken together, the Government of Canada has invested CAD 761 million, resulting in a combined total of over CAD 3 billion in capital raised from public and private sources to help Canadian companies start-up and grow. As part of Budget 2021, funding was renewed for VCCI to build on earlier investments to ensure Canadian businesses continue to enjoy access to a globally competitive VC ecosystem capable of nurturing entrepreneurial talent and creating high-quality, middle-class jobs.
The Canada Small Business Financing Program (CSBFP) is a statutory loan-guarantee programme, which facilitates indirect lending to small businesses, especially younger, smaller, and higher risk firms, typically with low collateral, less experience, or shorter credit history. Over the past two years (2021-23), the CSBFP has averaged over CAD 1.3 billion per year in indirect financing and, with recent legislative and regulatory enhancements, is expected to increase annual financing by CAD 560 million. This additional financing will support the needs of more growth-oriented firms by providing eligibility for investments in intangible assets and working capital.
Through Budget 2021 and 2022, the government outlined action to improve access to financing for small businesses by expanding the CSBFP. In June 2021, the Budget Implementation Act made amendments to the Canada Small Business Financing Act to allow not-for-profit, charitable, and religious enterprises as eligible businesses. In July 2022, amendments to the Canada Small Business Financing Regulations came into force to introduce a line-of-credit financing option, increase loan amounts, and to expand loan-class eligibility to include the financing of intangible assets, like intellectual property (e.g., patents, copyrights, trademarks), and working capital.
Futurpreneur Canada, a not-for-profit organisation which provides financing, mentoring, and business support tools to young entrepreneurs, received CAD 38 million in funding over five years, starting in 2019-20, to continue its support of the next generation of entrepreneurs. The organisation provides young entrepreneurs between the ages of 18 and 39 up to CAD 20 000 in start-up loans for flexible three- to five-year terms, with compulsory mentoring lasting a minimum of two years. Futurpreneur loan recipients can receive an additional CAD 40 000 in loans from BDC. Futurpreneur has had a focus on supporting equity-deserving young entrepreneurs and in 2021-22, 44% of the business they supported were women-led, 17% had Black founders and 5% had Indigenous founders. Through their Black Entrepreneur Startup Program and Indigenous Entrepreneur Startup Program, the organisation continues to support young, diverse entrepreneurs across Canada.
Supporting women entrepreneurs continues to be one of the key focus areas for the Government of Canada. The Women Entrepreneurship Strategy (WES) is a whole-of-government approach to increasing women-owned businesses’ access to the financing, talent, networks, and expertise that they need to start-up, scale-up, and access new markets. The WES represents nearly CAD 7 billion in investments and commitments, including an investment of CAD 146.9 million in 2021. This support is providing affordable financing while strengthening capacity within the entrepreneurship ecosystem. As part of the Strategy, WES partners including BDC and EDC have set ambitious new support targets.
The Government of Canada has made investments of up to CAD 265 million in collaboration with the BDC to help thousands of Black business owners and entrepreneurs across the country grow their businesses. The Black Entrepreneurship Program (BEP) has three main components: CAD 100 million for the National Ecosystem Fund to support not-for-profit Black-led business organisations across the country in their capacity to provide support, mentorship, financial planning, and business training for Black entrepreneurs; CAD 5 million for the Knowledge hub to conduct research on Black entrepreneurship in Canada and to help identify barriers to success and opportunities for growth; and, the Black Entrepreneurship Loan Fund is an investment of CAD 160 million (CAD 30 million from the Government of Canada, CAD 130 million from the BDC) to support Black business owners and entrepreneurs. The Loan Fund provides loans of up to CAD 250 000 to Black business owners and entrepreneurs across the country to start, build and grow their businesses.
The Aboriginal Entrepreneurship Program provides support for First Nations, Inuit, and Métis Nation entrepreneurs by lowering the cost of business financing, providing equity, and offering business support services. The programme helps Indigenous entrepreneurs access affordable loans to start and grow their businesses. Additional Indigenous entrepreneurship support include: the CAD 150-million Indigenous Growth Fund, launched by the National Aboriginal Capital Corporations Association alongside the BDC, to help Indigenous small businesses attract investment and take on more ambitious projects; and the BDC 's Indigenous Banking loan, which provides financing tailored to Indigenous entrepreneurs.
In addition, the Government of Canada’s launched Canada’s Export Diversification Strategy in Fall of 2018. In total, the Export Diversification Strategy is a CAD 1.1 billion investment over six years, which aims to help Canadian businesses access new markets and increase Canada’s overseas exports by 50% by 2025. It is focused on investing in infrastructure, providing businesses with resources to execute their export plans and enhancing trade services, including targeted support to underrepresented groups in trade. This includes enhancements to Canada’s Trade Commissioner Service (TCS), which offers free key services to Canadian businesses and has a majority SME client base. As part of these enhancements, the TCS has strengthened its service offerings related to growing areas of trade that are increasingly important to Canadian SMEs, such as digital, e-commerce and intellectual property. The Strategy includes providing CAD 50 million over five years to help SMEs explore new export opportunities, as well as CAD 100 million over six years towards CanExport and related programs to help SMEs looking to reach new markets overseas.
Established in 2016, the Trade Commissioner Service’s CanExport provides CAD 33 million per year in grants and contributions to Canadian SMEs, innovators, associations, and communities to help them diversify exports and expand their international footprint. In line with Canada’s Trade Export Diversification Strategy, the CanExport funding program seeks not only to diversify where Canada exports, but also who exports. To this end, the program launched a dedicated Concierge Service for women and Indigenous entrepreneurs, to encourage more diversity in its applicants, and to better support those who have been disproportionately impacted by the COVID-19 crisis. CanExport also allows companies participating in women-focused trade missions organized by Global Affairs Canada to submit a project under the CAD 20 000 budget limit for consideration.