On Monday February 1st, the Ontario Legislature’s Finance Committee held pre-budget hearings. According to Wellington Financial, representatives of the Canadian Venture Capital & Private Equity Association (CVCA) appeared before the Committee along with other interested parties. Each party was given five minutes to make their case, with another 10 for questions from the MPPs.
CVCA’s five minutes touched on the following five policy points:
- “Put more capital into the Ontario Venture Capital Fund, and ensure that this capital is actually deployed into funds.
- Revisit the decision to phase out the retail fund tax credit; the Governments in five other Provinces are enhancing their’s just as Ontario is closing the door on the industry.
- Introduce incentives for major contractors with government to invest in venture capital funds.
- Allow corporations to treat their investments in venture capital funds on the same basis (i.e., as deductions) as their R&D expenditures.
- Consider improvements to provincial R&D programs to leverage the success of the SR&ED program.”
Although he did not present, we asked Jordan Banks of Thunder Road Capital about his thoughts regarding the role of venture capitalists in the Ontario economy:
“Ontario needs more people and firms who focus on financially and operationally supporting early stage technology companies. With the right type of support at that stage, Ontario VC’s would have a much larger pool of exciting companies to choose from at the later stages when they typically feel more comfortable getting involved and US VC’s would be a whole lot more willing to co-invest.”
It will be interesting to see what action steps and budget programs the Ontario government fits into their upcoming Budget as a result of these meetings.
What are your thoughts? Do you think VC’s should be offered incentives by the governments to invest in the local, provincial, national economy?