Canada's Domestic Capital Problem: A Barrier to Innovation Economy Growth
The recent Canada Investment Summit held in Toronto highlighted the need for foreign capital to drive economic growth. However, Liam Gill, lead of the Capital Program at MaRS Discovery District, argues that Canada's focus on attracting foreign investment distracts from a more pressing issue: the country isn't deploying its own domestic wealth effectively.
Gill points out that Canada has an 'incentive problem,' not a capital shortage. The Dominion List, which tracks Canadian founders building companies in the US, reveals that there are 517 US technology companies with a Canadian founder, worth $574 billion CAD, including 56 valued at over $1 billion USD.
Meanwhile, Canada's startups combined raised just $9.13 billion CAD last year, and only 33 startups were valued at over $1 billion USD. This is not a comparison between US and Canadian entrepreneurs but rather a reminder that Canadian founders are contributing more to the US economy than their own country's.
Gill emphasizes that Canada has the talent, but what it lacks is accessible capital for founders who want to scale. As a result, they often go elsewhere where funding is available. Gill notes that this doesn't have to be the case and suggests that the solution lies in tapping into domestic wealth.