Banks, finance minister set to unveil business growth fund: sources

TORONTO — Federal Finance Minister Bill Morneau and Canada’s five biggest banks are set to announce Thursday a new fund aimed at helping small- and medium-sized businesses access cash to help them grow, according to sources familiar with the matter.

The two sources, who have direct knowledge of the matter, spoke on condition of anonymity because they were not authorized to speak publicly about it.

Morneau and the CEOs of the banks have an announcement scheduled in Toronto on Thursday morning.

The need to help small- and medium-sized businesses secure capital has become a growing topic of conversation in financial and political circles as of late.

During a speech to the Canadian Club of Toronto last month, CIBC CEO Victor Dodig spoke of how such a fund would invigorate the economy.

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He said CIBC has been in talks with the federal government and other financial institutions about creating a “sizeable” Canadian business growth fund, financed by the private sector, for small- and medium-sized enterprises.

“What’s interesting about the business growth fund in Canada is that it’s a private sector initiative,” Dodig said.

“It’s financial institutions coming together to help the small- and medium-sized business sector and generate a return for our shareholders, and the government has simply come together to convene us to say, ‘We think this is a good idea, we think you should go do this.’”

Earlier in February, a federal panel advising Morneau on economic growth published a report that recommended creating a business growth fund of $1 billion. The report said Ottawa should encourage the financial sector to create such a pool of money, which would provide so-called “patient capital” to high-growth companies.

“The council is particularly enthusiastic about the potential of this idea, given that it is private sector-led and would not place any additional burden on Canadian taxpayers,” the report said.

Follow @alexposadzki on Twitter.

Alexandra Posadzki, The Canadian Press