The EY G20 Entrepreneurship Barometer 2013: Canada

Access to funding

Pillar ranking: 4

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Strong funding ecosystem, but bank lending to entrepreneurs needs to be unblocked.

Canada’s entrepreneurs find access to funding easier than most of their peers in other G20 nations, according to the Barometer. Moreover, the Canadian Government has recognized there is no room for complacency and has made support for entrepreneurs and small businesses a central plank of its Economic Action Plan 2013. This plan includes C$400m of new funding for the venture capital sector, which may partly explain why entrepreneurs themselves report an improving environment: 45% say access has improved, compared to 35% across the G20 as a whole. At the start-up level, the plan includes C$18m of support for the Canadian Youth Business Foundation, which provides young entrepreneurs with start-up financing, mentoring and resources to launch their own businesses.1

There has also been good progress on growth funding. Additional Government help includes a hiring credit worth C$1,000 for each new employee taken on by small businesses. And the ratio of merger and acquisition (M&A) activity to GDP in Canada is now higher than in any other G20 nation except Australia. Weak spots persist, however. The increased support for domestic venture capital will have to compensate for a 22% fall in foreign venture capital investment, according to the Canadian Venture Capital Association.2 The survey results suggest funding is less likely to be available from customers or suppliers, and that bank funding is recovering more slowly than in other countries.

“The biggest bottleneck is with early-stage capital,” adds Enovec’s Scott Walton. “But it’s not that the money isn’t there because there are plenty of wealthy angel investors. We need a better matchmaking service between young entrepreneurs with a good idea and those wealthy investors,” he says. Furthermore, to improve access to funding, Walton argues that the Government could even take the lead on investing in projects in some instances. “If they were actually able to put an investment offer on the table, even if it was conditional on further investments, that would really help.”

EY - Proportion entrepreneurs surveyed in Canada citing improvement in access funding instruments

1. "Canadian Youth Business Foundation," Canada’s Economic Action Plan website,, accessed 13 July 2013.

2. "Canada’s Venture Capital Market in 2012: VC Investments at $1.5 billion, Fund Raising Highest Since 2002," Canada Newswire website,, accessed 10 July 2013.