As DEI backlash spills into Canada, Black tech leaders envision a more sustainable model

While the climate around diversity, equity, and inclusion (DEI) has seen a sharp reversal this year, community leaders say they envision a more sustainable, robust model to support Black Canadian founders.

The chilling effect on DEI initiatives spilled over into Canada following the re-election of United States President Donald Trump, as multinational corporations rolled back equity-related practices and programs they had adopted just a few years before.

“For many founders outside major hubs, the ‘friends and family’ round that fuels early growth simply isn’t an option.”

“Unfortunately, some of that thinking is getting adopted by corporate Canada,” Alfred Burgesson, CEO and founder of Halifax-based Tribe Network, said in an interview. “They feel like they can’t speak as loudly to support the communities that they’ve been supporting.” Tribe Network provides resources, mentorship opportunities, and networking events primarily for Black Canadian tech founders.

Though advocates say the shift in Canada was less overt, it still manifested in the end of certain support, like Shopify’s entrepreneurship programs for Indigenous and Black entrepreneurs, and things got tougher for Black-led non-profit fundraising.

“Their mandates changed and their desire to have this impact changed because society’s focus had shifted away from it,” Phil G. Joseph, founder of Montréal community organization Rep Matters and senior associate at Real Ventures, told BetaKit. Rep Matters runs networking and educational events for Black founders, with the aim of boosting their representation in Canadian tech and venture capital.

As swift as the backlash to diversity suddenly became, a significant contingent of Canadian tech resisted abandoning those values, with hundreds of ecosystem members signing an open letter calling it the “wrong direction” for Canada.

Burgesson, Joseph, and others are encouraged by the traction they’re seeing from the people using their services. They’re also relieved to see the Canadian government’s ongoing support through its $189-million renewal of the Black Entrepreneurship Program. There’s a “deep sense of resilience” in the community, Joseph said.

Tribe Network is looking to expand its operations across Canada and has supported more than 500 founders this year, according to its latest impact report. It’s also pursuing its $20-million venture fund, which Burgesson says is still whetting appetites.

“We’ve seen a decreased interest in the social impact angle of this work, and more of an emphasis on what that economic impact is,” Burgesson said.

The few numbers available in Canada show that Black and racialized founders see lower rates of entrepreneurship and face funding gaps. Fewer than one percent of venture dollars have gone to Black-led companies in Canada since 2020, according to a joint RepMatters and BKR Capital report. A separate report from the Business Development Bank of Canada notes that 1.3 percent of Black Canadian adults are entrepreneurs, compared to 2.3 percent of the general population. That percentage drops to 0.7 percent among Black women.

Lise Birikundavyi, managing partner at BKR Capital, says Black founders point to two barriers: access to capital at the earliest stages, and access to mentors, investors, and corporate partners. The early-stage capital crunch facing all Canadian entrepreneurs is “amplified” for underrepresented founders, who can’t necessarily rely on institutional or intergenerational networks.

“For many founders outside major hubs, the ‘friends and family’ round that fuels early growth simply isn’t an option,” she told BetaKit.

Building the “connective tissue”

Advocates say a robust ecosystem for Black founders will come from building out the “connective tissue” between government programs, funding sources, and community organizations, instead of siloing those pieces.

“How do we ensure that we’re creating a culture across government programs and innovation into the system that also factors in equity?” Burgesson said.

He added that he’d like to see more cross-initiatives, such as through the federal Strategic Innovation Fund or innovation clusters, where the government ensures diverse communities are tapping into those resources. For example, Tribe Network has partnered with innovation cluster Scale AI for Tribe AI Launchpad, an accelerator for early-stage artificial intelligence ventures that offers participants up to $50,000.

Birikundavyi agreed, arguing that these cross-initiatives can “break down silos” and allow funding and support to reach across regions and sectors.

To Joseph, it’s about a sense of belonging. “For those Black founders to be able to tap into the resources at the same rates that other founders from other communities are tapping into those resources, and to be part of a cohesive innovation ecosystem.”

Feature image courtesy RepMatters via LinkedIn.