The Canadian Venture Capital Association -- which represents both venture capital and private equity -- said
earlier this month (The Deal's Pipeline subscribers only) that VC investment and fundraising was in a crisis in Canada. Fundraising was drying up, funds only had money for follow-on investments in their existing portfolios, and new companies were unable to raise money.
The association had asked for support in the
budget released Tuesday. Although Finance Minister Jim Flaherty brought out a stimulus package, it focused on infrastructure, homebuilding and tax cuts but made no mention of venture capital.
"Unfortunately, the budget has failed to address the current shortage of venture capital financing, which presents a significant challenge to near-term job creation and to Canada's future prosperity in the important knowledge-based economy," said CVCA president Gregory Smith in a statement.
The association did take some consolation from the fact that the budget sank money into infrastructure and educational institutes.
In particular, the CVCA has
asked for federal and provincial governments to establish a minimum C$300 million ($249 million) fund-of-funds to support commercialization of research, improve the Scientific Research and Experimental Development Tax Credit Program, use government procurement to support VC-backed companies and apply the same tax treatment for VC investment now available to corporations for in-house research and development.
- Peter Moreira
Canada's venture capital industry was ignored in the federal government's budget on Tuesday, and the sector's association is not happy. 
