A first-of-its-kind $500-million strategic investment fund will provide B.C.-based businesses with capital to position the province as a front-runner in the post-pandemic economy.
The B.C. government has introduced legislation to support the operations of InBC Investment Corp. (InBC), a new $500-million strategic investment fund. Developed in consultation with the business and investment sectors, InBC will focus on driving innovation, sustainability and inclusiveness into B.C.’s economy. InBC will be designed to attract investment, create family-supporting jobs and diversify B.C.’s economy.
“By investing in people and businesses, InBC will support startups, help promising companies scale up and attract world-class talent to B.C. This new strategic investment fund is one of the tools we are using to build the foundation for a strong recovery and a bright future,” said Premier John Horgan on Tuesday. “The funds will be used to grow the economy and create jobs that will support British Columbians in all regions of the province.”
InBC will invest in high-growth potential businesses in British Columbia and leverage investments from the private and public sectors to help businesses grow. InBC will have a “triple bottom line” investment mandate, aiming to:
* establish B.C. as a globally competitive low-carbon jurisdiction;
* promote values that make life better for people in B.C., including job creation, advancing reconciliation with Indigenous peoples, promoting diversity and inclusion; and
* achieve a financial return on investment.
“As we deal with the challenges of COVID-19, we must lay the foundation for a strong and vibrant economic recovery,” said Ravi Kahlon, Minister of Jobs, Economic Recovery and Innovation. “The global economy is undergoing rapid changes, and InBC will position our province for the long term. Helping fulfil our goals of growing innovation, attracting investment and creating jobs, this strategic investment fund will ensure B.C. remains competitive as we invest in our low-carbon future.”
InBC will operate independently from government, with investment decisions made by a chief investment officer and a team of investment professionals. The chief investment officer will be held accountable by a nine-member board of directors, the majority of whom will be from the private sector. The full board is expected to be in place in May 2021. The chief investment officer is expected to be in place by fall 2021.
“This is a bold and important initiative that will not only make venture capital more accessible to small and medium-sized businesses in British Columbia, it will help drive the innovation needed to generate a cleaner, more sustainable economy,” said Wal van Lierop, executive chairman and founding partner, Chrysalix Venture Capital.
The fund is a major initiative under StrongerBC: BC’s Economic Recovery Plan and under Budget 2021. InBC will embrace an approach to economic growth that is innovative, sustainable and inclusive.
Wendy Hurlburt, president and chief executive officer, LifeSciences BC, said: “B.C. is home to a dynamic and world-renowned life-sciences community, comprised of nearly 2,000 companies employing roughly 20,000 people. The sector offers tremendous potential for exponential growth and foundational support for B.C.’s economic recovery, and will continue to deliver innovation, attract investment and create high-paying jobs. We look forward to working with InBC to further expand our life sciences sector and enhance B.C.’s resilience to future health challenges, and ultimately ensure our health and economic security.”
Greg D’Avignon, president and chief executive officer, Business Council of B.C., said: “Access to capital is critically important to our economy and innovative businesses as they seek to scale and compete globally. I am pleased to see the Province launch this strategic investment fund that can support higher productivity and growth while retaining exciting new and growing businesses, intellectual property and talent in British Columbia.”
Jérôme Nycz, executive vice-president, BDC Capital, said: “Congratulations to the B.C. government on the launch of the InBC Strategic Investment Fund. We are pleased that the province can rely on a new source of capital to support its innovation economy, alongside other national players such as BDC Capital.”
For more information on InBC, visit: https://www.inbcinvestment.ca/
InBC Investment Corp. overview
InBC was created on September 17, 2020, by renaming an existing Crown corporation, the BC Immigrant Investment Fund (BCIIF). The BCIIF was created in 2001 to receive funds from the federal Immigrant Investor Program (IIP) that were used to make low-interest loans to B.C. infrastructure projects, such as schools and hospitals.
In 2014, the federal government ended the IIP. As a result, the BCIIF is no longer offering new infrastructure loans. These loans continue to be repaid.
Once the InBC Investment Corp. Act receives royal assent, InBC will continue as a statutory Crown corporation and its Business Corporations Act structure will cease to exist.
* be flexible. For example, they could be equity, preferred shares, convertible notes and other forms of financing.
* be a patient, long-term source of capital for B.C. companies.
* be guided by the BC Economic Plan: A Framework for Improving British Columbians’ Standard of Living and the CleanBC plan.
* create quality economic growth in B.C., which will generate steady increases in wages, increases in government revenue and will share the benefits throughout the province.
Independence and board of directors:
* As a statutory Crown corporation, InBC Investment Corp. will operate at arm’s length from government.
* InBC will develop an investment policy statement. When developed, this will be publicly available on its website.
* InBC’s chief investment officer will have sole authority over the fund’s investment decisions. This model is consistent with other public sector investment funds, such as the BC Investment Management Corporation and the Canadian Pension Plan Investment Board.
* The chief investment officer’s investment decisions will be informed by the objectives of the investment policy statement. They will not and cannot be influenced by government, cabinet ministers, the CEO, the board of directors or any other outside party.
* InBC will be overseen by a nine-member board of directors, made up of both public and private sector members who, once the legislation is in place, will be appointed by cabinet.
* Two senior B.C. public servants will sit on the board. These positions will be filled by the deputy minister of jobs, economic recovery, and innovation, and the deputy minister of finance, which are the two ministries responsible for InBC.
* The remaining seven board members will come from the private sector and will be announced in a short time.
* The board will be responsible for overseeing the management of the corporation. Also, it will be empowered, if it chooses to do so, to set up a 12-member advisory forum to provide it with non-binding advice and potentially sit on board committees.
* InBC is subject to all the accountability and regulatory requirements of Crown corporations in B.C.
* InBC will submit annual reports as required by the Budget Transparency and Accountability Act.
* The performance of InBC’s investments will be made publicly available through the annual reports, audited financial statement, and an external review conducted every five years by an independent party. The legislation requires that these annual and external reviews will also be tabled by the legislative assembly and made available to the public.
* Budget 2021 includes $500 million in financing for InBC over three years.