Ottawa unveils $1.75B plan to boost venture capital

Ottawa unveiled a $1.75-billion Venture and Growth Capital Plan on Oct. 22, 2026, including a first-ever $75-million federal stream for pre-seed and seed startups, Industry Minister Mélanie Joly announced in Toronto.

The plan combines the $1-billion Venture and Growth Capital Catalyst Initiative, known as Growth VCCI, with the $750-million Early and Growth Stage Investment Strategy, according to the Innovation, Science and Economic Development Canada news release. Both pots were first set out in Budget 2025.

“Canada has the talent and ambition to build world-leading companies here at home,” Joly said in the release.

Growth VCCI is split three ways. A $700-million fund-of-funds stream is meant to draw in pension funds and other institutional investors, a $200-million stream backs venture managers who invest in Canadian life sciences companies, and a $100-million stream supports emerging fund managers, including those outside the traditional venture hubs.

The government has opened a call for expressions of interest from fund-of-funds managers, which can include private capital managers and pension funds. The deadline is noon Pacific time on Jan. 21, 2027, and the stream is expected to attract at least $2.1 billion in private money.

The second envelope, run by the Business Development Bank of Canada on Ottawa’s behalf, puts $675 million toward later and growth-stage companies and $75 million toward the earliest rounds. Ottawa and BDC are taking written comments on the design of the later-stage stream until 5 p.m. Pacific time on Nov. 23, 2026, at [email protected], according to a federal backgrounder.

Taken together, the government said, the plan is expected to attract at least $3.8 billion in private capital, for a combined investment of more than $5.5 billion.

The pre-seed money is the piece early-stage investors had lobbied for. The National Angel Capital Organization, which represents more than 4,000 angel investors, said in a statement that it is the first time Canada’s venture capital strategy starts at pre-seed.

“When their first investors are Canadian, companies can more readily take root here,” NACO chief executive Claudio Rojas said. The group pointed to figures from Leaders Fund showing that in 2015, seven in 10 Canadian-founded startups that raised US$1 million or more were based in Canada, compared with one in three by 2024.

NACO said the announcement was made at Waabi, a Toronto company building artificial intelligence for self-driving trucks, and that it will convene angel networks in the coming weeks to help shape the early-stage stream.

Eligibility rules and specific programs for the $750-million strategy are still being developed, the backgrounder said, and the government has not said when the first cheques will flow.

The plan sits alongside other federal capital pools described in the backgrounder, including BDC’s $6-billion defence platform and a $500-million Canadian Tech Growth Fund for scaling AI companies, through which Ottawa may at times take equity stakes.

The announcement comes as private funds keep raising money. Montreal’s Inovia recently hit a US$200-million first close on its sixth fund, and Toronto chipmaker Tenstorrent raised US$1.5 billion this month. At the other end of the market, Toronto’s Aerium raised US$2.5 million for factory software, the kind of early round the new stream is designed to support.

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