$5.8B in government funding and $900M in venture capital distributed in first half of 2014
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New data released today by The Funding Portal shows just how critical government funding is for Canadian businesses seeking capital for R&D and expansion. In the first half of 2014, governments delivered $5.86B to organizations across a range of industries. Over the same period, venture capital (VC) deals amounted to $897M, according to previously reported findings from Canada’s Venture Capital and Private Equity Association.
“Canada’s government funding marketplace has been almost impenetrable and companies have tended to overlook what amounts to billions of dollars of available funding,” said Funding Portal CEO Teri Kirk. “In fact, Canada has the second-highest level of business incentives among OECD countries but, until now, data about this source of funds has not been readily accessible.”
TheFundingIndexTM offers the first clear picture of how industrial incentives are distributed by region and industry sector. Compiled through a wide array of sources, the data measures direct incentives paid by federal, provincial and municipal governments through more than 4,500 programs.
Based on the first six months of 2014, incentives are projected to grow by approximately 4% over 2013. On a quarterly basis, incentives of $2.62B in Q2 2014 were 19% lower than in Q1.
“The quarterly drop is more about timing than actual cuts, due to a bit of a freeze during the Ontario election period,” said Kirk.
Organizations in Ontario attracted the highest levels of government funding in the first half of 2014, for a total of $2.59B (44% of the total amount disbursed). Quebec was the next largest recipient of funding with $1.03B (18%), followed by Alberta with $526M (9%), and B.C. with $493M (8%). The Atlantic Provinces combined attracted $714M (12%).
This data reflects similar distribution patterns to VC investment in the first half of the year. Businesses in Ontario attracted $331M in VC financing between January and June 2014 (37% of total VC investment in Canada).
“The arts and culture sector always attracts large amounts of government funding. In fact, it secured the highest level of funding in the first half of 2014 — $2.07B,” said Kirk. “The academic and research sector also fared well, with total disbursements of $1.04B.”
The manufacturing sector ranked third with $991M secured (17%), followed by health technology and life sciences with $530M (9%).
The data and related services to help businesses to secure funding are available at thefundingportal.com. The portal will publish results for Q3 2014 in mid-February 2015.