Private investors, founders, urge Canada to remove barriers to attract foreign capital

Canada needs to facilitate ways for global capital giants to invest in domestic mid-market deals, financiers and CEOs from some of the country’s top tech companies said Monday at a forum hosted by the country’s private capital association.

The day-long conference held at Toronto’s waterfront and hosted by the Canadian Venture Capital and Private Equity Association (CVCA) was one of the most prominent side events to Prime Minister Mark Carney’s Canada Investment Summit this week.

The CVCA’s Canadian Global Growth Forum drew hundreds of attendees including national investors, foreign capital providers, politicians and prominent Canadian founders including CEOs of Wealthsimple Financial Corp., Cohere Inc., Waabi Innovation Inc. and Xanadu Quantum Technologies Ltd.

While the Prime Minister is highlighting big infrastructure projects seeking investment at the summit, the CVCA event focused on smaller-scale opportunities that dominate the deal flow in Canada. A delegation from the United Arab Emirates held closed door meetings with attendees, and the CVCA set up other curated meetings between investors and attendees.

Canada is “a very trustworthy partner,” said Cohere CEO Aidan Gomez, who is pitching his AI company as an alternative to U.S. giants. “That brand is something Cohere wants to protect on the world stage with AI.”

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But Mr. Gomez also said a culture change is needed, and that Canada should be more ambitious.

Brookfield, executive chairman, private equity, Cyrus Madon told the conference the trade war was “the greatest gift that anybody could have given our country,’ as it is “forcing us to focus on what really matters” including attracting capital and growing GDP.

Canadian sovereign pride played well in the room which was predominantly attended by CVCA members.

Manitoba Premier Wab Kinew kicked off the forum with a land acknowledgement during which he defiantly noted, to applause, that the event was being held on the shore of Lake Ontario. (President Donald Trump recently signed an executive order for the U.S. government to rename it Lake America.) “We are at a time of nation building,” Mr. Kinew said.

Several attendees called for changes to make Canada more appealing to foreign investors. Mr. Madon said it would take the emergence of giant Canadian companies to impact the country’s GDP.

Henry Hager, New York-based managing director of the Waterous Energy Fund, said in an interview regulatory processes here are beset by a duplicative “overburden” that slow projects and discourage capital providers.

Mina Mitry, CEO of Canadian satellite technology company Kepler Communications Inc., said in an interview “the most important thing is procurement reform” that makes it easier and faster to sell to government. “It would dramatically alter the course of the business” and encourage private capital inflows.

Canadian-born Camilla Languille, co-CEO of private equity for Abu Dhabi-based sovereign wealth fund Mubadala, said capital providers and company builders should shift from being transaction-focused to forging deeper, longer-term partnership with foreign investors.

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She also encouraged the federal government to give foreign investors a clear, coordinated entry point to invest here. “It’s difficult for global investors to navigate multiple federal departments, provinces, regulators, agencies, independently.”

Like others, she called for an end to interprovincial trade barriers that can make Canada feel like several markets and which would help companies “scale nationally from day one,” making it more attractive for foreign investors to “help take them to the next level” in global markets.

Stuart Waugh, managing partner with Toronto-based private capital investor Northleaf Capital Partners, addressed a specific challenge bedeviling the market here. He said large foreign investors have a “fairly positive view of Canada” as a place to do business, but that the vast majority of investment opportunities are too small for them to effectively allocate capital. He encouraged global investors to set specific portfolio allocations for Canada, and to work with local partners to help “diffuse’ their allocations into smaller opportunities, as Northleaf has done for two large Canadian pension funds here.

Speakers praised Canada for its stable political, economic and regulatory environment, depth of talent and clean, low-cost and abundant electricity, while offering a reassuring pat on the back for an economy threatened by a trade war with the U.S. “Where there is trust, capital flows,” CVCA CEO Benjamin Bergen said in his opening remarks.

Waabi CEO Raquel Urtasun, whose Toronto-based autonomous driving startup has struck a deal to power 25,000 Uber robotaxis and recently raised US$1-billion in financing, said in an interview her company’s success shows Canadian-based entrepreneurs “can attract massive pools of capital. We can build a global leader, and you don’t need to go to the U.S.”

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Paul Desmarais III, senior vice-president of Power Corp. of Canada, said Canada offers huge market opportunities for investors to back financial services startups, as his Montreal-based conglomerate has done through various affiliates including Portage Ventures. “But it requires bold bets,” he added, saying people thought he was “certifiably crazy” after Power and its affiliates invested $300-million in Wealthsimple in its early years. The digital bank challenger last year reached a valuation of $10-billion and surpassed $155-billion in assets under management in June.

Wealthsimple CEO Michael Katchen said it’s up to the country to make the most of the current moment.

“We’ve never seen a Canada that’s more ambitious in terms of both the companies that we want to build, the industries that we want to tackle the global partnerships that we want to forge,” Mr. Katchen told the crowd.