Registered Venture Capital Plans: Fixing Canada's Entrepreneurship and Scale-Up Crisis (Zenodo (CERN European Organization for Nuclear Research))

Summary

• Canada's business entry rates fell from 24.5% in the 1980s to roughly 13% pre-pandemic, with fewer than 1.5% of small businesses ever scaling into medium or large firms.p.3
• Housing investments take up over 30% of total national investment in Canada, compared to just 20% in the U.S.p.4
• In 2025, the U.S. venture capital market was approximately 37 times larger than the Canadian VC market.p.6
• Nearly half of Canada's high-potential startups execute a Delaware Flip to access U.S. capital, with U.S. funds providing 50% to 60% of all venture dollars in Canadian tech.p.8
• Canadians hold $745 Billion in TFSAs and $1.6 Trillion in RRSPs, but domestic venture capital deploys only $8 billion to $9 billion CAD annually.p.14
• The proposed Registered Venture Capital Plan provides 100% tax deferral on treasury instruments for firms under $100M in gross assets, and 80% for firms between $100M and $200M.p.17

Key insights

1. Canadian workers receive only 55 cents of new business investment for every dollar received by American workers.p.3
2. Nearly 66% of native-born Canadian software engineering graduates leave Canada immediately after graduation for opportunities in the U.S.p.8
3. In 2024, the U.S. raised over 51 times more venture capital than Canada at the later stage venture level.p.9
4. The UK's Seed Enterprise Investment Scheme (SEIS) offers income tax relief of 50% up to an annual investor limit of £200,000.p.11
5. France's PEA-PME account wrapper allows deposits up to €225,000 into EU firms with annual revenue under €1.5B or a balance sheet total under €2B.p.13
6. The implementation of the RVCP is projected to generate over $1.39B in new net total annual deal liquidity in its first year.p.23