On Friday, Prime Minister Justin Trudeau announced $962 million in new capital to Regional Development Agencies (RDAs) and the Community Futures Network.
The prime minister noted that the money is specifically meant to support rural businesses and those which may not have existing relationships with financial institutions.
“This announcement is very positive news and represents an important step.”
RDAs are federal agencies under Innovation, Science and Economic Development Canada (ISED). The six RDAs across Canada span Atlantic Canada, Ontario, Western Canada, and the northern regions as well. Community Futures Network is a group of federal agencies placed across Canada that provide small business services in rural communities.
In a follow-up briefing on Friday, Minister of Economic Development Melanie Joly, who’s portfolio includes RDAs, stated the $962 million investment is essentially doubling the budget of the development agencies. The federal 2018 budget allocated around $911 million to RDAs.
According to a statement from the Government of Canada, $675 million is being allocated to the RDAs with $287 million directly for the Community Futures Network.
Further capital and expansion of the RDAs is something a number of innovation groups and leaders in Canada have called for in order to support startups that have not qualified for the federal emergency programs such as the 75 percent wage subsidy and emergency business loans.
In a recent letter to Joly and Minister of Small Business Mary Ng the Canadian Digital Media Network specifically called for increased funding to the RDAs, noting it is essential to help Canada’s startup ecosystem with its recovery.
Joly said on Friday that conversations she had with various organizations across Canada over the past couple weeks led to the decision to increase funding for the regional agencies. The government heard that access to financial institutions is often difficult for small businesses to access, Joly said, the objective is to “prevent entrepreneurs from falling through the cracks” when they have a “critical role to play in communities.”
When pressed, Joly was not able to provide further details on how the funding to RDAs and the Community Futures Network will be deployed. This story will be updated as more information on the initiative becomes available.
On Friday, the government also announced $250 million to Industrial Research Assistance Program (IRAP) program as well as $20 million to Futurpreneur Canada.
The announcements come as many groups in the Canadian tech sector have called for extended support for startups through existing innovation programs.
Groups including Iain Klugman, president and CEO of Communitech, as well as the Council of Canadian Innovators have already applauded the federal government for taking these steps.
“This announcement is very positive news and represents an important step in addressing the key concerns expressed by Communitech’s startup members,” Klugman told BetaKit.
Image source World Economic Forum via Flickr</em>