Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeInnovationCanada's heavy reliance on foreign capital puts economic sovereignty at risk, warns BDCThis country is great at starting companies, but not so good at keeping themLast updated 44 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Business Development Bank is Canada’s most active investor by deal count. Photo by ANDRE FORGET/PostmediaThe Business Development Bank of Canada says a strained venture capital market and continued reliance on foreign capital is making it harder for homegrown startups to expand and is putting economic sovereignty on the line.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an Accountor“Canada is exceptionally good at creating innovative companies. Where we fall short is helping them scale and stay here,” Geneviève Bouthillier, executive vice-president BDC Capital, said in a statement on Tuesday.“The heavy reliance on foreign capital to fill that gap … has implications for Canada’s ability to retain ownership, decision-making and long-term value. This is now an economic sovereignty issue.”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againBDC, which is Canada’s most active investor by deal count, said the country is “efficient” at creating startups, with Canadian-only investor groups accounting for 40 per cent to 60 per cent of investments in fundraising rounds valued at $1 million to $20 million.But it struggles to provide cash for startups to grow. Investor groups with foreign investor participation contributed 80 per cent to 90 per cent of the capital in deals valued at $50 million and above, with Canadian-only participation now in the low double-digits.The Crown corporation said the dependence on foreign capital means Canada risks losing its high-growth companies, talent, intellectual property and other economic benefits that accrue when a company grows and becomes more established at home.“Growing companies are among the most powerful economic engines of innovation, jobs and wealth,” it said in the report. “They could play a role in tackling some of Canada’s most pressing challenges, including struggling productivity and … economic sovereignty.”Venture-capital investment in Canada fell six per cent to $8 billion in 2025 and domestic fundraising dropped to its lowest level in years, according to BDC. The market also saw few exits, while Canadian venture capital returns lagged global peers such as the United States.These conditions are creating pressure at critical moments for startups and entrepreneurs, BDC said. It said even though fewer Canadians are moving to the U.S. permanently, more are heading stateside via temporary entrepreneurship pathways, with entrepreneurship visas granted to Canadians growing to 3.4 per cent between 2015 and 2024 from 1.7 per cent in the previous decade.Venture-capital activity in Canada last year was dominated by fewer, larger deals, with the top 10 disclosed deals accounting for 49 per cent of investments, but only 1.8 per cent of the total deal count, so investors are plowing money into a smaller number of companies and magnifying Canada’s reliance on foreign capital, BDC said.Various industry groups are now jockeying for the $750 million reserved by the federal government for startup support in its last budget.The Canadian Venture Capital Association has asked the government to direct the funds to growth-stage companies focused on critical sectors such as artificial intelligence, quantum and defence, while the National Capital Angel Association has proposed more support for pre-seed and seed-stage companies.BDC said it wants domestic investors to provide “essential liquidity” in the form of early and later-stage funding for startups to ensure “more Canadian companies can grow, remain anchored and generate value and wealth within Canada.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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