Good morning!
The government is courting private capital for Canadian startups, by kicking off its $1.75B venture funding plan.
Public markets were harder to charm, with Meta’s AI financing plans rattling tech stocks.
Let’s get into it.
MARKET RUNDOWN
Yesterday’s Close
Meta’s plan to issue non-voting shares to help finance its AI data centres revived concerns over AI spending, sending the Nasdaq down (2.6%) - its biggest daily drop since June 5 - and lifting Treasuries.
Falling gold and copper prices also weighed on TSX miners.
WTI rose as fresh Houthi attacks on Saudi Arabia’s civilian and energy infrastructure stoked supply fears.
BRIEF OF THE DAY
Canada Begins $1.75B Venture Funding Rollout to Address Domestic Funding Gaps
The news: Industry Minister Mélanie Joly began rolling out a previously announced $1.75B venture and growth capital funding plan, administered by federal Crown corporation BDC. The government opened applications for its $700M fund-of-funds stream and unveiled how a separate $750M would be divided between early- and later-stage funding.
The backdrop: Canadian VC funds raised $2.1B from investors in 2025, down 39% from 2024, leaving less fresh capital available for startup investments. As Canadian companies grow and require larger financing rounds, limited domestic funding options increasingly push them to seek investors abroad, particularly in the U.S.
Where the money goes…
$1B through the “Venture and Growth Capital Catalyst Initiative” (Growth VCCI):
$700M for funds-of-funds (i.e., funds that primarily invest in other VC funds).
$200M for VC funds focused on life sciences.
$100M for VC funds run by newer managers.
$750M through the “Early and Growth Stage Investment Strategy”:
$75M to support investment in pre-seed and seed-stage startups.
$675M for funds investing in later-stage companies.
The emphasis on later-stage growth capital aims to help more Canadian companies scale globally from Canada - although early-stage investors still call for greater support for younger startups.
How it attracts private investment: Under the $700M fund-of-funds stream, managers must raise $3 from private investors for every $1 of public capital. When investment proceeds are distributed, private investors receive their capital and a preferred return before the government is paid, making participation more attractive. Across the full $1.75B plan, the government aims to attract at least $3.8B in additional private capital.
💼 Why this matters: By attracting more private capital alongside public funding, the plan could help more Canadian companies grow and scale globally while keeping talent, intellectual property, decision-making, and economic value in Canada. Over time, a larger base of successful Canadian companies could also create more capital markets opportunities - including follow-on financing, M&A, and IPOs.
HEADLINE RECAP
In Canada
Canada launches process to deploy $1.75B into venture capital sector, targeting fund-of-funds ($700M), later-stage growth capital ($675M), life sciences ($200M), emerging managers ($100M), and pre-seed/seed ($75M) (GM)
Canada and Turkey launch three-year strategic partnership spanning trade, defence and energy (BBG)
Canada’s chief trade negotiator says no timeline to resume formal U.S. trade talks, says tariff-free U.S. trade unlikely to return (GM)
Ontario plans more than $8B in additional business tax relief, warns deficits will continue (GM)
Canada gives steelmaker Cleveland-Cliffs 15 days to reverse Canadian Stelco layoffs or face legal action (BBG)
RBC names first dedicated Canadian equity strategist in a decade, sees TSX reaching 38,600 over next year (BBG)
National Bank’s Nowlan warns Canada’s IPO drought is hollowing out public markets (BBG)
Canada Post showing “early signs” of financial recovery, CEO says (CP)
Canadian heavy oil producer Strathcona (TSX:SCR) pitches 250,000-barrel-per-day Prince Rupert oil terminal in BC requiring tanker-ban exemption (BBG)
Toronto cybersecurity firm 1Password tops US$500M ARR as AI agent usage surges 500% (BK)
Ottawa photonics chipmaker Ranovus launches venture arm, eyes acquisition of Canada’s only end-to-end compound-semiconductor foundry (TL)
Canadian e-commerce platforms Cymax and CommerceBear reportedly shut down amid furniture e-commerce market slump (BK)
Canada tells its diplomats to avoid meeting U.S. midterm candidates amid interference accusations (BBG)
DEALS WITH CANADIAN PARTIES
M&A & Investments
Power Sustainable Lios: The Montréal-based agri-food PE firm acquired Fine Choice Foods, a BC-based maker of SUMM! Asian appetizers, from Swander Pace Capital, becoming majority owner alongside minority investors Farm Credit Canada and Bonnefield Financial.
BMO served as exclusive financial advisor to Fine Choice Foods and Swander Pace Capital.
TransAlta (TSX:TA): The Calgary-based electric utility company sold a 49% stake in its 500-MW Oklahoma wind portfolio to Ares Infrastructure funds for US$305M (~$428M), retaining 51% ownership and operating control.
Fengate Asset Management agreed to invest in New York fibre provider Pilot Fiber, backing Pilot’s purchase of CPP Investments-controlled Boldyn Networks’ New York and New Jersey fibre business.
Guggenheim Securities advised Fengate; The Bank Street Group served as exclusive financial advisor to Boldyn Networks.
Logan Energy (TSXV:LGN): The Calgary-based oil & gas producer, with a market cap of ~$899M, is reportedly exploring a sale and soliciting interest from potential buyers.
Welbi: The Ottawa-based resident-engagement platform, which serves ~1,000 senior living communities, was acquired by Further, a U.S.-based senior-care software company.
VC & Growth Equity
Shopify Ventures: Shopify’s (TSX:SHOP) venture arm, alongside Sequoia Capital, co-led a US$200M (~$281M) Series D in Whop, a U.S. online-selling platform for digital products, valuing the company at US$5.1B (~$7.2B).
NAventures: National Bank of Canada’s (TSX:NA) venture arm joined a US$17M (~$24M) round for mobile device security platform iVerify, co-led by Sands Capital and Entropy Ventures.
ECM
Hercules Metals (TSXV:BIG): The Toronto-based, Idaho-focused copper explorer announced a $30M bought-deal private placement of common shares at $0.87/share.
DCM & Credit
CIBC (TSX:CM) announced €600M (~$947M) of senior unsecured notes due 2032, paying 4.375% until 2031 and 3-month Euribor +100 bps thereafter.
CIBC, Crédit Agricole CIB, DZ Bank, Société Générale, UBS, and UniCredit were joint bookrunners.
TD Bank (TSX:TD) announced £750M (~$1.41B) of floating-rate covered bonds due 2029, paying SONIA +53 bps.
Barclays, Lloyds, Nomura, Standard Chartered, and TD were joint bookrunners.
TD Bank (TSX:TD) announced CHF150M (~$256M) of 1.055% covered bonds due 2033.
UBS led the offering, with TD as joint lead manager.
Neo Financial: The Calgary-based fintech closed a $185M syndicated warehouse credit facility to fund its credit-card receivables, with an accordion allowing the facility to expand to $250M.
ATB Financial was lead arranger and sole bookrunner.
City of Vancouver announced $175M of 4.35% bonds due 2036.
BMO led the offering, with CIBC as joint lead manager.
City of Laval: The Québec municipality announced a ~$100M bond offering across six tranches due 2027-36, with coupons ranging from 3.00% to 4.50%.
RBC was sole manager.
BAY STREET TRIVIA
Which Canadian financial institution first began offering women mortgages without requiring a male co-signer in 1961?
FOR THE GROUP CHAT
