Ottawa Opens a C$700 Million Fund-of-Funds Call Inside a C$1.75 Billion Venture Plan, With Applications Closing 21 January 2027

Canada's federal government announced a C$1.75 billion Venture and Growth Capital Plan in Toronto on 22 October 2026, and the part that matters most to fund managers is a C$700 million fund-of-funds stream that opened for expressions of interest the same day. Industry Minister Mélanie Joly made the announcement, and the call closes on 21 January 2027. The Business Development Bank of Canada (BDC) is reported as the administrator of the programmes. For a GP who raises from institutions, the notable feature is the match: at least C$3 of private capital for every C$1 of public money.

What was announced

The plan has two programmes. The Venture and Growth Capital Catalyst Initiative is C$1 billion, split into a C$700 million fund-of-funds stream, a C$200 million life sciences stream and a C$100 million stream for emerging managers, including those outside the traditional hubs. The Early and Growth Stage Investment Strategy is C$750 million, split into C$675 million for later and growth stage and C$75 million for pre-seed and seed. The government expects the fund-of-funds stream to attract at least C$2.1 billion of additional private capital, and says the whole plan should bring in at least C$3.8 billion, for combined venture and growth investment of more than C$5.5 billion. Eligible applicants to the fund-of-funds call include private capital managers and pension funds.

The numbers, by capital and by count

By capital, the fund-of-funds stream is 40% of the C$1.75 billion and the two largest streams together, fund-of-funds and later and growth stage, are 78.6%. The emerging manager stream is 5.7% and pre-seed and seed is 4.3%. By count, the fund-of-funds stream is one of five, so a fifth of the streams holds two-fifths of the money. Across the whole plan the stated private capital expectation works out to about C$2.17 of private money per C$1 of public money, which is lower than the 3:1 ratio the fund-of-funds call requires. That gap is our arithmetic, not a figure from the announcement.

Terms that shape who can apply

Reported terms for the fund-of-funds call include a minimum fund size of C$150 million and a requirement that at least 60% of fund investments go to Canadian venture capital firms. The government describes the structure as risk sharing for private investors with enhanced exposure to performance. Written feedback on the later and growth stage stream is due on 23 November 2026. No managers or institutional investors have been named as recipients, and the first money is not expected quickly: reported estimates run to 12 to 18 months before capital reaches funds and companies.

How it compares

The plan lands as Canadian pension capital is already moving into venture. In September, Radical Ventures announced a first close of more than US$1 billion for its late-stage AI fund, backed by CPP Investments, PSP Investments and two other Canadian pension plans, among others. As we covered when the British Business Bank supplied half of a venture fund's first close, government-backed capital can anchor a launch, and the 3:1 rule here pushes that logic harder: the public money only works if private institutions show up behind it.

The named LPs

BDC is the administrator on the government's behalf, so it is the relationship to understand even though it is not the final allocator of every dollar. CPP Investments and PSP Investments are the two named pension investors in the Radical close; we do not know whether either will apply to the fund-of-funds call, and the announcement does not say so.

What a GP should do

This section is our advice, not guidance from the government. First, decide which of the three doors you are. A venture manager with a Canadian base and a fund of at least C$150 million is a candidate for selection by a fund-of-funds manager; a first-time or regional manager should read the C$100 million emerging manager stream; a manager with no Canadian base should check how a fund-of-funds manager would treat the share of its portfolio that is not required to go to Canadian venture firms, which is up to 40%. Second, expect the private match to be the hard part. A fund-of-funds manager needs C$3 from institutions for every C$1 of government money, so the institutions that already back Canadian venture are the audience to prepare for. Third, build your case around what the public capital changes for an institution: the risk sharing and performance exposure the government describes, and a larger fund. Fourth, put the dates in your calendar: 23 November for feedback on the later and growth stream, 21 January for the fund-of-funds call. Our playbook for raising against a government match sets out the steps in order. A fund-of-funds structure also changes who your first call should go to, so confirm who is applying before you approach anyone.

What to watch next

Watch for the first fund-of-funds managers to be selected after the January close, for whether the pension funds named in the Radical close apply, and for the design of the later and growth stage stream once feedback closes in November. FundLinx members can see which institutions are active in your strategy.

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