Venture Capital Catalyst Initiative (VCCI)
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals (2010), a Strategic Environmental; Assessment (SEA) Preliminary Scan was conducted for the Venture Capital Catalyst Initiative (VCCI). The Preliminary Scan indicated that the proposal is unlikely to result in important environmental effects overall, but its potential investments in clean technologies may help advance progress on some goals and targets of the 2016–2019 Federal Sustainable Development Strategy (FSDS).
This program will make available $400 million to increase the availability of capital for innovative Canadian firms to help them scale-up and create quality jobs. With funds leveraged from the private sector, and depending on the proposals received, this investment could inject up to $1.5 billion into Canada’s innovation capital market.
The Initiative will allocate capital to two streams. Stream 1 will allocate $350 million to large private sector-led funds-of-funds that will seek to maximize returns through diversified investments, support skilled VC fund managers, and attract substantial private sector capital. The funds-of-funds will mainly invest their capital in VC funds, which will invest in innovative companies in ICT, clean technology, health science, and other technology sectors. This stream was modelled after, and builds on the success of, the Venture Capital Action Plan (VCAP).
Stream 2 will allocate $50 million for alternative models that that will make a significant impact on Canada’s VC ecosystem by investing in areas that would not otherwise be addressed by large funds-of-funds, to build and strengthen the Canadian VC ecosystem and complement stream 1. Applicants in this stream should propose alternative, innovative investment strategies that will provide a financial return for investors and that build the VC ecosystem by focusing on underrepresented groups such as women or diverse fund management teams and entrepreneurs, or emerging sectors.
Similar to investments of the current VCAP, the new VCCI is expected to invest a portion of its capital in companies in clean technology sectors that could contribute to achieving environmental objectives. The clean technology investments would advance the objective of clean growth.
The VCCI, therefore, is likely to advance the following goals and targets of the 2016–2019 FSDS:
Goal 1: Effective action on climate change
- Long-term goal: A low-carbon economy contributes to limiting global average temperature rise to well below two degrees Celsius and supports efforts to limit the increase to 1.5 degrees Celsius
- Medium-term target: By 2030, reduce Canada's total GHG emissions by 30%, relative to 2005 emission levels
Goal 3: Clean growth
- Long-term goal: A growing clean technology industry in Canada contributes to clean growth and the transition to a low-carbon economy
- Medium-term target: Implement our Mission Innovation commitment to double federal government investments in clean energy research, development and demonstration, by 2020, from 2015 levels
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