Comments on: Reforming Section 116: Key to Opening Canadian Borders to Foreign Venture Capital

By: How to open Canada’s borders to VC

How to open Canada’s borders to VC — Sun, 26 Dec 2010 15:31:55 +0000

[...] how difficult our country makes it for others to invest in Canadian startups. The full read can be found on his blog, or you can read it docs if you are so inclined. The article does a great job of summarizing [...]

By: Two curves: My view on the BC cleantech sector at the beginning of 2010

Two curves: My view on the BC cleantech sector at the beginning of 2010 — Wed, 03 Mar 2010 06:50:35 +0000

[...] haunt all forms of technology development, including cleantech, and they need to be addressed. The Section 116 problem has never been resolved and makes it difficult for investors to invest in Canada without great [...]

By: links for 2009-04-22 « National Angel Capital Organization

links for 2009-04-22 « National Angel Capital Organization — Thu, 23 Apr 2009 06:04:34 +0000

[...] CVCA – Capital Rants » Blog Archive » Reforming Section 116: Key to Opening Canadian Borders to Fo… How are Canada’s cross-border laws thwarting entry of this much needed foreign capital? The Canada – US tax treaty provides that investors of each country, when investing in the other, will be taxed on investment gain only once. For example, a Canadian venture capitalist investing in a private US company will be taxed only in Canada on its gain upon sale, and not in the US. The US strongly encourages Canadian investment in the US by automatically recognizing a Canadian investor’s treaty exemption from double taxation – no paperwork – no delay – no withholding – and the Canadian VC is immediately free to take its sale proceeds back to Canada. [...]

By: Stephen A. Hurwitz

Stephen A. Hurwitz — Wed, 22 Apr 2009 19:59:36 +0000

It is my understanding that in 2008 Canada’s venture capital firms received approximately 4% of all funds invested that year in US venture capital firms, and Canada’s venture-backed companies received in 2008 approximately 4.5% of all funds invested in US venture-backed companies that year. Also, in 2008, Canadian venture-backed companies raised, on average, $3.6 million, as compared to $9.5 million raised that year by US venture-backed companies. All these percentages/amounts are based on/expressed in Canadian dollars, based on converting US dollars into Canadian dollars as of the individual transaction dates. No further currency adjustments have been made. I do not have information on the comparative costs of doing business in Canada and the US, except it is generally believed that the costs in Canada are less than in the US, and currency differences of course factor into this as well.

By: Joseph Fung

Joseph Fung — Tue, 21 Apr 2009 14:32:07 +0000

Thanks for posting this online – was looking for an online source that I could share.

A question: the numbers you’ve included, are they adjusted or unadjusted currencies, and do you have any numbers on the comparative expenses (i.e. how much more is the cost of doing business for a US firm). I’d be interested to see a more complte picture.

By: Brian Sharwood

Brian Sharwood — Thu, 16 Apr 2009 20:30:59 +0000

Thanks for posting this article! I knew some of this, but was missing a lot of information on the details. This filled me in a lot!

And 100% agree on the proposal John is suggesting.