Canada needs to make it easier for people to build businesses here and give those businesses a fair chance to grow. We should be clear about what we want in return: productive companies, good jobs, and more of the value created by Canadian ideas staying in Canada.
My own experience is rooted in early-stage investing in Nova Scotia. It has shaped how I think about risk and the systems around it. A promising company needs investors prepared to back it before the outcome is clear. As it grows, it needs customers, experienced people and access to larger amounts of capital. Our economic policy has to work across that entire journey.
This is the starting point for North Founders' economic policy. Like most of our work, we intend to iterate as warranted. It focuses on entrepreneurship and innovation, with particular attention to Atlantic Canada and communities outside the largest financial centres. Further work will address energy, critical minerals, artificial intelligence, health, talent and pension investment.
What Others Are Proposing
There is useful work already on the table. We should understand it, identify where we agree and be precise about what we would add.
The National Angel Capital Organization (NACO) proposes a 30% refundable national investment tax credit, with combined federal and provincial credits capped at 50%. Its May 2026 Senate brief also proposes reinvestment deferral and a five-year capital gains exemption capped at $15 million per investor. [1]
The Council of Canadian Innovators (CCI), the Canadian Venture Capital and Private Equity Association (CVCA) and the Bet on Canada coalition call for a Canadian incentive inspired by the U.S. Qualified Small Business Stock regime. Their October proposal includes a $15 million cap per taxable event, broader eligibility and fewer restrictive ownership thresholds. They also seek a broader capital gains rollover, including investment through corporations and funds. [3, 4]
NACO's wider pre-budget submission proposes directing the $750 million early-stage envelope toward $500 million in matching investment and $250 million for investment infrastructure. It also calls for an innovation and growth stream within the Canada Strong Fund. [2]
Senator Colin Deacon supports encouraging Canadians to invest in Canadian opportunities. His office's work also addresses regulatory modernization and whether federal innovation programs produce meaningful results. [7, 9, 10]
Peter van der Velden of Lumira Ventures makes the case for partnerships between pension investors and specialist Canadian venture managers, built around diversification and risk-adjusted returns. [8]
Daniel Perry connects successful founders with the next generation of investors. Claudio Rojas explains why tax reform needs to be accompanied by first-cheque financing, angel networks and matching funds. [5, 6]
The details matter. The coalition's $15 million cap per taxable event differs from NACO's proposed cap per investor. These are proposals, not descriptions of an enacted national package. The RRSP framework below is North Founders' addition and should be considered on that basis.
1Encourage the First Investment
We support a refundable federal investment tax credit of 30% for qualifying new equity investment in Canadian growth businesses. It should work with provincial programs and be clear enough for investors and founders to understand before money changes hands.
Following NACO's proposed approach, combined federal and provincial investment credits should generally be capped at 50%. Governments would need to agree on how that ceiling works without unintentionally removing existing provincial benefits. [1]
Our proposed rules would:
- Apply to newly issued equity that puts money into the business, rather than purchases of existing shareholders' holdings.
- Allow qualifying direct investments and professionally managed funds, while preventing the same investment from receiving duplicate credits at both levels.
- Require substantive Canadian operations and demonstrable benefits to Canada.
- Set limits for investors and companies, minimum holding periods and recovery rules for abuse or premature withdrawals.
- Establish eligibility and certification before an investor commits.
We should judge the credit by the additional investment it attracts. Paying for investment that would have happened anyway would miss the point.
2Make RRSP Investment Practical and Self-Directed
Building on point 1, derisking investment is necessary to attract new investors. To that end, I would add a clear way for Canadians to invest in qualifying businesses through their RRSPs and receive an investment tax credit as well. We propose a Canadian Growth Investment RRSP framework to make that possible through direct investments or diversified Canadian growth funds.
Some private-company shares and investment vehicles already qualify for registered plans. The conditions are strict, and financial institutions can impose their own restrictions. [12]
British Columbia provides a useful precedent. Its venture-capital program allows qualifying investments made directly from RRSPs or RRIFs to receive provincial credits. Federal qualification must still be established separately. [13]
Our proposal has five parts:
- Keep ordinary RRSP treatment. Eligible new contributions would use existing contribution room and receive the ordinary deduction. Returns would accumulate within the plan, and normal withdrawal taxation would apply.
- Explicitly allow the investor credit. Legislation would permit a refundable personal credit when the investor's RRSP purchases an eligible investment. It would resolve the interaction with provincial credits and registered-plan advantage rules.
- Offer diversified funds. Professionally managed funds would give investors a way to participate without having to select and administer individual private-company shares.
- Make administration workable. Investors and custodians would have standard qualification documents, independent valuations and transparent fees.
- Protect retirement savings. Suitability requirements, clear explanations of illiquidity and workable RRIF arrangements would accompany access. Existing prohibited-investment protections would remain.
To be clear: RRSP treatment defers tax. Withdrawals are generally taxable. Buying an investment with money already inside an RRSP does not create another contribution deduction. [14]
For an initial pilot, we propose an annual credit-eligible investment limit of $50,000 per individual, alongside existing RRSP limits. We also propose a 70% ceiling on combined initial tax relief. That would include investment credits and the tax reduction from the associated new RRSP contribution. Credits would be adjusted to respect the ceiling, while the ordinary RRSP deduction would remain intact.
These are North Founders' proposed starting parameters. They require fiscal modelling and consultation before implementation.
Example: A new $10,000 RRSP contribution that produces a $4,000 tax reduction, combined with a proposed $3,000 credit, would provide $7,000 in initial relief. The investor would hold a risky $10,000 investment inside the RRSP. Withdrawals would be taxable, fees would reduce returns and the company could fail. Initial relief is not a guaranteed return or a permanent tax saving.
The credit should follow money actually invested in eligible businesses. Funds would report where the capital goes, with recovery rules for money left undeployed. Moving previously subsidized shares between accounts should not produce another credit.
3Let One Success Help Finance the Next
We support broader capital gains rollover eligibility for individuals, corporations and qualifying funds when proceeds are reinvested in eligible Canadian businesses. This would postpone the tax while keeping more capital available for another investment. The rules must define eligible proceeds, reinvestment deadlines, partial reinvestment and what happens when the next investment is sold.
We also support a competitive Canadian incentive for long-term ownership, drawing on the Bet on Canada letter. Legislation must be precise about whether a cap applies per investor, per company, over a lifetime or per taxable event. It should prevent transactions from being artificially split to claim additional relief. [4]
Founders, early employees and outside investors should be able to benefit where they have taken meaningful risks. Before adoption, the government should publish the expected cost and explain who would receive the benefits.
Capital gains exemptions and rollovers would principally address investments outside registered accounts. The RRSP proposal should not produce a second exemption for the same gains or make ordinary RRSP withdrawals tax-free.
4Support Companies as They Grow
We support NACO's approach to early-stage matching investment and the organizations that help get capital into businesses. Selection should be transparent, investment decisions independent and results reported. Access for Atlantic Canadian founders and other regions should be a requirement of the program. [2]
As companies grow, we should create practical opportunities for pension funds, insurers, family offices and other institutions to invest alongside capable Canadian managers. Those investments must stand up on commercial merit and meet the obligations investors owe to their beneficiaries.
Government can help establish credible investment vehicles, consistent reporting and sufficient scale to attract institutions. The investment decisions should remain with qualified managers.
5Help Companies Win Customers
A company cannot keep raising money indefinitely. It needs to sell something that people are prepared to buy.
CCI's wider agenda includes strategic procurement, domestic AI and defence capacity, later-stage financing and better pathways for entrepreneurial talent. We support connecting these issues to the capital discussion. [11]
We propose that public buyers:
- Define the problem they need solved and publish measurable purchasing requirements.
- Fund time-limited demonstrations with clear decisions about wider adoption.
- Remove unnecessary bidding barriers for smaller companies.
- Assess lifetime value, interoperability, security and domestic economic benefits.
- Protect public interests while allowing companies to commercialize their intellectual property.
Health, defence, energy and public infrastructure are practical places to begin. Procurement reform must operate within applicable trade commitments.
6Make Regulation Work in Practice
Founders need to know what is required of them, who makes the decision and how long it should take. We support predictable approval timelines, coordinated processes and supervised testing of new technologies.
Senator Deacon's regulatory work includes standards-based modernization and collaboration with Senator Yuen Pau Woo. It offers a useful basis for keeping regulation current while protecting consumers. [9]
We would assign responsibility for decisions, publish service standards and identify overlapping requirements. The same practical approach should apply to innovation programs. Where a program works, we should understand why. Where it does not, we should change it or stop it.
7Be Honest About Cost and Results
Tax incentives cost money — however, the Province of BC's data showed a return on investment of 3:1 for its equity tax program. We need to measure the success, address the shortcomings, examining whether they deliver what we expect and be prepared to explain why they are justified.
We would require Finance Canada to publish an integrated estimate covering credits, deferred revenue, administration and the interaction among measures. For scale, $100 million of eligible investment at an unadjusted 30% federal credit represents $30 million in gross credits before caps, recoveries or other interactions. That calculation is not a forecast of the package's net cost and does not take into account the increase in payroll and sales taxes expected from increased investment.
We propose a three-year intake pilot for the new RRSP framework, with annual reporting and a longer period to follow investment outcomes. The evaluation should measure:
- Additional private investment and access by region.
- Company survival, subsequent financing and export revenue.
- Productivity, skilled employment and Canadian commercial activity.
- Ownership and commercialization of intellectual property.
- Investor outcomes after fees, including losses.
- Public cost per dollar of additional investment and the distribution of benefits by income.
This policy is a starting point. The commitment is to make it easier to build and grow productive businesses here, then hold ourselves accountable for the results. That is how North Founders will approach the work as the policy develops.