Ottawa unveils two-pronged approach in bid to stimulate economic growth

The federal government unveiled a two-pronged effort Thursday

TORONTO — The federal government unveiled a two-pronged effort Thursday aimed at improving Canada’s ability to foster growth at a time when a rising tide of protectionism threatens to hurt the country’s economy.

Canada’s biggest banks and other financial institutions launched a fund of up to $1 billion over 10 years to help small- and medium-sized companies access capital to expand their businesses.

The fund, which will be financed by the private sector and aims to fill the gap between angel investors and the public markets, will start at $500 million for the first year. It follows a recommendation issued last month by a federal panel advising Finance Minister Bill Morneau on economic growth.

“This effort of the banks and other institutions to come together is one that we’ve been pleased to be involved with, of course, but it’s really been a bank-, insurance company- and fund-led initiative, to seek a way to provide capital, patient capital, that will make an important, long-term difference for our country,” Morneau told a news conference in Toronto.

If demand from the businesses is strong and the fund’s performance is good, it could be increased to a total of $1 billion over the next nine years.

RBC CEO David McKay said small businesses face challenges accessing the cash they need to expand their operations — for example to hire new staff, purchase new equipment or facilities, or acquire another company.

“We do have a very strong and vibrant investment community … but it’s sub-scale and it’s fragmented,” McKay said.

The financial sector has been meeting for about a year to try to solve that problem, he said, and the investment fund is the solution they devised.

The fund will be set up as a for-profit, independent entity governed by a board of directors who will determine which companies to invest in. It will acquire a minority stake in the businesses it invests in, allowing the firms to retain control of their operations.

In addition to providing cash, the business growth fund will also help companies seek mentorship and advice to help them flourish. Initial contributors include the country’s six biggest banks — the Bank of Montreal, Royal Bank, TD Bank, CIBC, Scotiabank and National Bank. Insurance companies Manulife, Sun Life and Great-West Life are also contributing to the fund.

Elsewhere in Toronto, Economic Development Minister Navdeep Bains announced changes intended to make it easier for companies to lure workers from abroad with skills in high demand.

One of the measures to launch June 12 is meant to help high-growth Canadian companies attract specialized talent through a faster, streamlined temporary foreign worker program. The initiative would establish a two-week standard for processing work permit applications and help Canadian firms fill jobs where there is a proven gap in the domestic labour market, Bains said.

Work permit requirements for highly skilled work for short periods — 30 days or less over one year — would be dropped, he added.

Follow ↕alexposadzki on Twitter.

Just Posted

BREAKING: Red Deer to host Canadian Finals Rodeo in 2018

The CFR is expected to bring $20-30 million annually to Red Deer and region

Canada, U.S. lead call for enforcement of sanctions against North Korea

VANCOUVER — Canada and the U.S. led calls Tuesday for the global… Continue reading

Donald Trump aces mental aptitude test designed by an immigrant to Canada

WASHINGTON — When the White House released the results of a test… Continue reading

Food industry fails to meet most voluntary sodium reduction targets: Health Canada

TORONTO — Voluntary sodium targets for the food industry have failed to… Continue reading

Feds long way from restarting or scraping missing, murdered women inquiry: PM

OTTAWA — Prime Minister Justin Trudeau says his government is a long… Continue reading

WATCH: Rebels play floor hockey with Annie L. Gaetz students

The Rebels may be on a losing streak but they were definitely… Continue reading

Ice dancers Virtue and Moir to carry flag at Pyeongchang Olympics

Not since Kurt Browning at the 1994 Lillehammer Games has a figure… Continue reading

Beer Canada calls on feds to axe increasing beer tax as consumption trends down

OTTAWA — A trade association for Canada’s beer industry wants the federal… Continue reading

Central Albertans recall Hawaii’s false missile alert

Former Red Deer councillor Paul Harris was hanging out at the Ka’anapali… Continue reading

This robotic maid takes us one step closer to ‘The Jetsons’

Imagine this: You’re rushing to get ready for work — juggling emails,… Continue reading

Milan line offers canine couture for pampered pooches

Milan has long been the world’s ready-to-wear fashion leader. Now, dogs are… Continue reading

Kim Kardashian West and husband Kanye welcome baby girl

NEW YORK — It’s a girl for Kim Kardashian West and her… Continue reading

Advocate poll takers oppose plastic bag ban

Red Deer Advocate readers like their plastic bags. In an Advocate poll,… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month