Insurance companies and banks combine for national business growth fund

March 8th, 2017  |  Canadian Business

Canada's business sector just got a major infusion of support. This morning, Federal Finance Minister Bill Morneau and representatives from some of the country's biggest banking and insurance companies unveiled plans to create a business fund that will specifically aim to facilitate the growth of small- and medium- sized businesses—one that could be see contributions of up to $1-billion over the next decade.

According to Morneau, the fund "will help ambitious Canadian companies get the capital they need to grow and succeed globally." It will connect businesses with mentors and talented workers who can help them realize their potential. Initial capital investments are expected to total close to $500-million, with each contributor accounting for anywhere from $3- to $20-million of that sum.

Most of Canada's high-profile players in the insurance-finance sector are on board with this initiative. It's a group that includes: BMO, CIBC, RBC, Scotiabank, TD, Manulife, Sun Life Financial, Great-West Life, National Bank of Canada, HSBC, ATB, Laurentian, and Canadian Western.

To avoid conflicts of interest, management tasks will be conducted by an independently-run entity. That body will have its own board of directors and managers. Representatives from the companies behind the fund expect that management team to be in place and deploying capital within the next 12 months.