Minister of Industry Mélanie Joly speaks to reporters ahead of a cabinet meeting on Parliament Hill in Ottawa on Oct. 20, 2026. The Canadian Press/Justin Tang
Ottawa has announced $1.75 billion in funding aiming to help keep high-potential startups and scale-up companies from leaving Canada for better investment opportunities.
The federal commitment will be split into two main pillars: a $1 billion in financing to back companies at different stages of their business lifecycles and a $750 million early and growth stage investment strategy, Industry Minister Mélanie Joly said in a press release.
The $750 million strategy will provide $75 million to help businesses in the pre-seed and seed stages get started and secure further funding. The remaining $675 million will be reserved for established companies in their later and growth phases.
The separate $1 billion initiative, announced in Budget 2025, will begin in the 2026-27 fiscal year. It includes $700 million to encourage private investors, pension funds and other large investors to put money into Canadian businesses; $200 million to support investment in Canadian life-sciences companies; and $100 million to help newer investment fund managers, including those backing businesses in key industries and areas outside Canada’s traditional investment centres.
The government said it plans to partner with the private sector in a bid to unlock pension assets and institutional investment channels to direct capital toward startup funds dedicated to life sciences and key strategic industries.
Joly described the federal venture capital strategy as a way to “build world-leading companies here at home… by unlocking more private capital to back Canadian entrepreneurs and innovators.”
Many Canadian company founders have historically launched or relocated their startups to the United States, according to tech advocacy group Build Canada.
Build Canada released an analysis earlier this year noting that there are 517 U.S.-based tech firms with Canadian or Canadian-educated founders that have collectively raised more than US$400 billion south of the border.
The report was based on information from the Dominion List, a dataset that tracks U.S. technology companies founded or co-founded by Canadians.
Some of the most prominent companies featured on the list alongside their Canadian connections include SpaceX, OpenAI, eBay, and Uber. SpaceX founder Elon Musk studied at Queen’s University, OpenAI co-founder Ilya Sutskever and former eBay president Jeff Skoll are both University of Toronto graduates, and Uber co-founder Garrett Camp is a University of Calgary alumnus.
Others include Instacart founder and University of Waterloo graduate Apoorva Mehta and Slack co-founder and University of Victoria alumnus Stewart Butterfield.
Industry associations have said they are hoping the newly announced federal funding will better allow Canadian founders to tap into domestic capital to fund and scale their companies without having to leave the country like so many before them.
National Angel Capital Organization CEO Claudio Rojas said the government’s new funding strategy is the first to start at “pre-seed.”
“For too long, our startups have rolled out of the country like acorns and grown into massive oaks elsewhere,” Rojas said in the press release.” When their first investors are Canadian, companies can more readily take root here.”
Canadian Venture Capital and Private Equity Association (CVCA) CEO Benjamin Bergen said his organization has long “been making the case for a stronger capital base that can follow Canadian companies as they grow.”
“This commitment puts substantial federal capital behind that approach,” he said. “It gives Canadian investors greater capacity to finance innovation and growth here, alongside the private and international capital already coming into the market.”
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