BDC Report Warns VC Gaps Threaten Canada's Economic Sovereignty

Canada's ability to scale and retain its world-class startups is facing significant challenges, potentially jeopardizing the country's economic sovereignty, according to a new report from the Business Development Bank of Canada (BDC).

The "Canada's Venture Capital Landscape 2026" report indicates that while Canada excels at creating innovative companies, it struggles to help them grow and remain domestically owned. An increasing reliance on foreign capital, particularly for late-stage financings, threatens Canada's capacity to maintain ownership, intellectual property, and long-term economic benefits.

While venture capital investment in Canada saw a modest 6% decline to $8 billion in 2025, the report notes a concentration of capital into fewer, larger deals. Foreign investors accounted for 80-90% of capital deployed in financings exceeding $50 million, exacerbating a broader "scale-up gap." This trend is concerning amidst heightened global competition for strategic technologies like artificial intelligence (AI).

"When ownership, intellectual property, and decision-making shift outside the country, Canada risks losing not only economic upside but also influence over the industries and technologies that will shape its future," stated Geneviève Bouthillier, Executive Vice President at BDC Capital. AI alone represented nearly half of all venture capital invested in Canada in 2025, and late-stage growth in the sector remains highly exposed to foreign decision-making.

The report calls on stakeholders in Canada's VC landscape to address this critical scale-up gap, as its implications extend beyond mere financing. BDC Capital aims to act as a catalyst by increasing its own investments and attracting private capital, focusing on sectors where Canada holds strategic importance.