Montréal, Quebec, December 12, 2007 Bolstered by the success of its recent initiatives, Canada Economic Development has announced its intention to extend the duration of its capitalization measure, including the capital funds for business succession and business startups in the regions. Initially intended to run until December 31, 2007, these two funds will be subject to report at March 31, 2008, and enhanced at the conclusion of that exercise.
Created at the initiative of Canada Economic Development, these two funds have been implemented in partnership with Quebec's Community Futures Development Corporations (CFDCs) and Business Development Centres (BDCs) and with the support of the Fondation de l'entrepreneurship and many venture capital firms operating in the province.
In terms of business creation, the 13 projects selected for funding to date are in the process of generating some 400 jobs. The $3.6 million in total funding granted by the Agency under this initiative has resulted in $32.4 million in overall investments.
With respect to business succession, Canada Economic Development and its partners have helped increase the number of small and medium-sized enterprises (SMEs) successfully transferred to the next generation and have contributed to maintaining existing businesses in their present regions. The 17 projects funded so far are expected to lead to the preservation of 1 177 jobs. Under this initiative, the $4.25 million in total funding awarded by the Agency has resulted in $59.2 million in overall investments.
"Extending this initiative will give future promoters the opportunity to take advantage of one of these funds. The Government of Canada is committed to ensuring the vitality of our regions. These business startup and succession funds help compensate for the shortage of venture capital in the regions of Quebec and provide financial leverage that will directly benefit entrepreneurs," explained the Honourable Jean-Pierre Blackburn, Minister of Labour and Minister of Canada Economic Development.
According to the Canadian Federation of Independent Business (CFIB), more than 40% of Quebec entrepreneurs plan to retire within the next five years. The establishment of a succession fund will help prevent the closing of many businesses that are already firmly rooted in their communities. SMEs account for 98% of all Quebec businesses and some 64% of all employment in the province. Canada Economic Development is committed to supporting the men and women who wish to start their own businesses and create jobs.
"These two funds are among the tools we are placing at the disposal of our regions and businesses. With the collaboration of our partners and the $13 million in funding from Canada Economic Development, this initiative should generate more than $50 million in financial leverage," Minister Blackburn added.
The Venture Capital Fund for Business Startups in the Regions is intended for SMEs in the initial stage of seeking outside investors. This Fund helps foster the emergence of businesses that would otherwise be unable to be created without this new source of capital.
The Capital Fund for Business Succession is aimed at helping to keep existing enterprises, jobs and decision-making centres in their present regions. This Fund is open to SMEs in Quebec regions served by CFDCs and BDCs.
These tools are offered in addition to the regular programs of Canada Economic Development, whose mandate is to promote the long-term economic development of the regions of Quebec by paying special attention to those where slow economic growth is prevalent or opportunities for employment inadequate.
-30-
Sources:
Jean Décary
Communications
Canada Economic Development
Tel.: 514-283-8818
Cell.: 514-214-5381
E-mail: jean.decary@dec-ced.gc.ca
Jean-Philippe Payment
Press Secretary
Office of the Honourable Jean-Pierre Blackburn
Canada Economic Development
Tel.: 819-953-5646
E-mail: jeanphilippe.payment@hrsdc-rhdsc.gc.ca
