SME Financing Data Initiative
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Canadian Venture Capital Activity: An Analysis of Trends and Gaps (1996–2002)
Appendix C: Summary of Provincial Government and Territorial Government Programs
Program
Goals/Objectives
Description
Alberta
Alberta does not offer any direct financing programs to SMEs.
British Columbia
British Columbia does not offer any direct financing programs to SMEs.
Manitoba
Manitoba Industrial Opportunities Program (MIOP)
- MIOP provides highly flexible support to encourage companies to expand in Manitoba.
- MIOP uses a repayable secured loan type of financing, which may include some forgiveness of interest in return for commitments to provide economic benefits.
Provincially Supported Capital Markets Supply Programs
- Vision Capital Fund
- Manitoba Capital Fund
- Manitoba Science and Technology Fund (MST)
- Renaissance Capital Manitoba Ventures Fund
- Western Life Sciences Venture Fund LP (WLSVF).
- Vision Capital is a $45.1-million fund that makes VC investments in the $100 000 to $4.5-million range (fully invested).
- Manitoba Capital is capitalized at $25 million and provides subordinated debt investment in the $250 000 to $2.5-million range (fully invested).
- MST is a $10-million pool of risk capital that will invest from $100 000 to $1.5 million in early-stage science and technology companies.
- Renaissance is a $10-million pool of risk capital that will invest from $300 000 to $1.5 million in information technology, communications, health care and value-added agriculture companies.
- WLSVF is a $45-million VC fund that creates, acquires and develops early- and later-stage human biomedical technology companies.
New Brunswick
Financial Assistance to Industry Program
- This program, offered by the Department of Business New Brunswick, provides working capital or term loan guarantees as the preferred method of financial assistance. It can also provide a direct loan as an alternative, if guarantees cannot be secured.
- The maximum amount of assistance under both forms of financial assistance is $200 000. The loans are usually guaranteed for between 3 and 5 years, while the term of direct loans ranges from 3 to 10 years. Interest rates on loan guarantees vary with the bank lending rate, while direct loans will be made at the provincial lending rate, which will be fixed for the term of the loan.
Newfoundland and Labrador
Small Business Seed Capital Equity Program
- This program offers small businesses located and operating in Newfoundland and Labrador equity financing up to $50 000 per applicant, normally on a one-time-only basis.
- The business getting the loan must match the loan with its own funds. It can use the loan to buy fixed and intangible assets and as working capital.
Nova Scotia
Business Development Corporation
- The Corporation provides loans and loan guarantees to SMEs. It also takes a lead role in structuring financial packages using its own funds as well as investor equity and funding from other public and private sources.
- The manufacturing sector uses the loans to expand existing businesses and for start-ups outside the Halifax area, particularly in rural areas that are ill served by commercial lenders. The Corporation also focusses on innovative solutions to specialized financing situations for high technology, aerospace, pharmaceutical and environmental technology companies. Interest rates are comparable to current market rates and amortization terms are flexible, while loans may be repaid at any time without interest or penalty.
Ontario
Ontario does not offer any direct financing programs to SMEs.
Prince Edward Island
Island Investment Development Inc. (IIDI)
- IIDI is a Crown corporation that uses the Island Funds and Prince Edward Island Century 2000 Fund to attract businesses through the federal Immigrant Investor Program.
- IIDI helps experienced businesspeople emigrate to Canada and contribute to the province's economy by applying their risk capital to business ventures in P.E.I. For the 2001–02 fiscal year, such immigrants invested approximately $4 million.
Quebec
Innovatech
- The Innovatech structure consists of government VC funds aimed at three regions: Montréal, Québec and south Quebec. These funds help investors in technological companies from start-up to success.
- Innovatech specializes in pre-start-up and start-up financial assistance to technology-intensive companies. In addition to investing, Innovatech also helps generate added value and optimal growth for its investee companies by providing support and serving as a credible catalyst to attract other financial partners.
Investissement-Québec
- Investissement-Québec offers financial help to businesses in the manufacturing, tourism, cooperative and recycling sectors, and to certain service companies.
- Investissement-Québec manages a number of Quebec government financial assistance programs that accelerate economic development, that help start and expand companies, and that bolster growth in exports, research and innovation.
Société générale de Québec (SGF)
- SGF is an industrial and financial holding company that provides development capital to both small and large enterprises. It also takes part in managing every investee company and provides needed expertise to ensure success.
- SGF can invest up to $2 billion over five years.
CDP Capital
- CDP Capital — Private Equity manages all investments made by the Caisse de dépôt et placement du Québec primarily in partner companies that are not publicly traded, as well as investment made through specialized private equity funds. The group has three main subsidiaries: CDP Capital (Technology Ventures) specializes in biotechnology, information technologies and industrial technologies; CDP Capital (Communications) invests in telecommunications and media; and CDP Capital Americas invests in other sectors.
- In 2002, the net disbursements pertaining to investment activities totalled almost $600 million. The fair value of the portfolio held by CDP Capital (Private Equity) was $11.6 billion, distributed among 932 companies and funds, while net assets stood at $10.5 billion or 13.5 percent of depositors' net assets.
Saskatchewan
Crown Investments Corporation (CIC) of Saskatchewan
- CIC is a provincial agency that invests in commercially viable businesses that need at least $5 million in provincial capital, generally in the form of either equity or a combination of equity and debt.
- CIC will normally invest in new or expanding businesses and in the advanced product development or pre-commercialization of a product or technology. Its targeted strategic sectors are agriculture and related industries, biotechnology and information technology.
Saskatchewan Government Growth Fund (SGGF)
- SGGF participates in the federal Immigrant Investor Program, with $157 million in capital to finance new, existing and turnaround businesses in Saskatchewan.
- SGGF normally invests between $1 million and $3 million, but at least $500 000, in a broad range of industries.
Yukon
Yukon Venture Loan Guarantee Program (VLGP)
- This program involves a partnership between the VLGP and the seven major Canadian chartered banks to provide, on application by a bank, a partial guarantee of a business loan in the event of loss.
- This program is available to new and expanding Yukon businesses that develop and distribute new products or services or that focus on exports of goods or services, import substitution, high technology and information services. The guarantee can apply to loans of between $10 000 and $100 000 and equals 65 percent of the principal of the venture loan, based on the net loss on the loan. Recipients must repay within six years, with an interest rate ranging from 3 percent to 10 percent over the chartered banks' prime rate.
