Ontario Ministry of Finance | Honourable Charles Sousa | March 14, 2016

Official speech delivered on March 3, 2016 in Toronto at the 2nd Annual Canadian Crowdfunding Summit

INTRODUCTION

Good morning. Thank you, Tim, for that kind introduction.

Thank you for inviting us back to speak to your second annual 2016 Canadian Crowdfunding Summit. As you may know, our government is very supportive of crowdfunding and we listened to you on how government could show itself to be nimble in the face of fast-moving, merging industries of the future.  In mid-December, we approved several new prospectus exemptions proposed to us by the Ontario Securities Commission, which enable businesses – in particular, early stage one – to raise capital in newer and more innovative ways, while maintaining appropriate investor protection.

Why?

To help small- and medium-sized businesses grow, expand, and realize economies of scale, which will help shrink the productivity gap we have with US firms. And, given their rapid growth rates, we know how much potential they have for growing our economy. We also recognize the advantages that crowdfunding can provide to small businesses and entrepreneurs, through the internet, at a much lower cost.

Massolution’s 2015 Crowdfunding Industry Report estimates that global crowdfunding grew by 167 per cent in 2014, to $16.2 billion raised. They predicted it would more than double in 2015, to $34.4 billion. These are numbers too big to ignore. Helping businesses get off the ground and scale up is part of our strategy to grow the economy and create jobs. To support business, our government is choosing to embrace change and to lead our province to continued economic growth and job creation.

For example, Ontarians asked for change in how beer and wine are distributed and sold. They asked for laws and regulations to reflect current realities, instead of outdated ways of doing things. And we listened. Just like our wine and beer retailing changes, we feel that our crowdfunding exemption has struck the right balance between greater access and investor protections.

We are confident that the OSC’s new crowdfunding prospectus exemption will help entrepreneurs and SMEs gain greater access to capital. It will help them grow and reach the next level of their development. We want businesses to know that we will be there to help them at that next stage, too.

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The new offering memorandum exemption, which came into effect in Ontario in January, allows small businesses to raise larger amounts of capital than crowdfunding and in a more cost-effective manner than a public offering. It will allow businesses to distribute securities under an offering memorandum rather than under a more detailed and costly-to-prepare prospectus.

Further helping Ontario businesses create jobs and grow our economy. Through steps like these, we are fostering a more innovative and dynamic business environment which is part of our number one priority: to help grow the economy and create jobs. This means investing in our workforce, supporting world-class research and development and encouraging start-ups and supporting small and medium-sized enterprises.

BUSINESS GROWTH INITIATIVE

Our government recently launched the Business Growth Initiative – a five-year, $400 million dollar investment to increase our global competitiveness.

It includes creating an innovation-driven economy. This means helping develop and commercialize disruptive technologies in key economic sectors. It means investing $35 million over the next five years to establish a $50 million partnership in the Advanced Manufacturing Consortium, which will include McMaster, Waterloo and Western Universities.  This collaboration between academia and industry will focus on long-term industrial innovation projects to make Ontario a leader in fields such as additive manufacturing and digital components and devices.

It includes helping Ontario firms scale up. We are creating a program to provide vouchers to leading high-growth firms to help them get their products to global markets. These vouchers can be used for activities such as market research, proof-of-concept testing and securing new export customers. We will also create a Strategic Investments Office to provide a one-stop shop for attracting investment, for the coordination of licensing and permits, and for workforce training.

And it includes modernizing the regulatory system and lowering the cost of doing business. In order to demonstrate and retain the nimbleness needed to keep pace with fast-moving industries, we are building a smarter regulatory environment. In fact, this spring we will launch the Red Tape Challenge, an online tool to allow you, the public, to identify duplication, compliance burdens and long response times.

Conclusion

These are exciting times for businesses and entrepreneurs in Ontario. Our strengths are driving growth across the province. They are providing opportunities for manufacturers, exporters, the services sector and entrepreneurs to grow their businesses and create jobs.

In fact, since 2009, Ontario’s GDP grew by about 20 per cent, and our businesses have created more than 600,000 new, high-paying, private sector jobs. And in the first two months of this year, Ontario created 50,000 new jobs.

Over the next 36 months, Ontario is on track to create more than 900,000 net new jobs since the depths of the recession. Many of these jobs will come from SMEs who take the next step in their development. Crowdfunding can be an important part of this growth. It can provide the push to help a new business get off the ground and take flight. To help Ontario continue to build our innovation economy.

To provide benefits for all Ontarians. On that note, thank you for your attention, and I hereby declare the 2016 Canadian Crowdfunding Summit open! (RING Cowbell)

END

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1300+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.