The Business Development Bank of Canada (BDC) said Tuesday that gaps in scaling and retaining homegrown startups pose a risk to economic sovereignty [1].
This trend is critical because it suggests Canada cannot effectively commercialize its own innovations. Without a robust domestic venture capital ecosystem, the nation remains dependent on foreign investors to grow its most promising companies, often resulting in the loss of intellectual property and economic control.
The findings were detailed in the Venture Capital Landscape 2026 report, released May 26, 2026 [1]. The report highlights a systemic failure to scale what the country creates, noting that a strained venture-capital market makes it difficult for startups to expand within Canadian borders [1].
According to the BDC, the continued reliance on foreign capital creates a vulnerability in the national economy [2]. When startups are forced to seek funding from overseas to reach their full potential, the resulting growth and high-value jobs often migrate away from Canada [3].
The report said that the inability to commercialize technology at home prevents the country from capturing the full value of its research and development [1]. This gap in the scaling process transforms venture capital from a mere financial tool into a matter of national sovereignty [3].
BDC said that addressing these gaps is necessary to ensure that Canadian innovation leads to sustainable domestic growth [2]. The organization said that the current trajectory risks leaving Canada as a source of early-stage ideas that are ultimately scaled and owned by foreign entities [1].
“Canada must scale what it creates”
The BDC report signals a shift in how Canada views its tech ecosystem, moving from a focus on innovation to a focus on ownership. By framing venture capital gaps as a sovereignty issue, the bank is arguing that financial infrastructure is just as vital as scientific research. If Canada cannot provide the late-stage capital necessary for growth, it will continue to export its most valuable intellectual assets to foreign markets.
