Both Venture Capital and Angel investors worldwide have been challenged to raise a significant amount of money because of the challenging times world-wide. In Canada, raising money from outside the country has been relatively challenging because of Section 116 which makes tax treatment for United States investors a time consuming affair.
The BC Renaissance Capital Fund has created pools of money to invest in venture funds. However, this VC has to invest a significant amount of the commitment back into companies from that province.
Canada is competing for capital and talent internationally. Administrative hurdles like Section 116 give Canadian VC’s hurdles to compete for capital internationally. Canadian VC’s traditionally invest their money in their home region so the net effect of lobbying to change Section 116 would be positive for entrepreneurs in Canada and create world-class VC firms.