Riding a wave of momentum following the recent Lower Churchill energy corridor agreement, Nova Scotia Premier Darrell Dexter soon after announced his intention to explore the formation of a privately owned venture capital fund. Drawing upon the private sector and other institutional shareholders, the endowment would see his province target investment opportunities in clean tech, life sciences, information technology, and other high-growth sectors across Atlantic Canada. In a recent conversation with Steven Patrick Clare, Dexter explains to Progress how such a fund could be a solid first step toward a more cohesive regional economy.

The recommendation for this fund came from Donald Savoie’s report, did it not?
It’s an idea that has been floating around in one form or another for a long time. Savoie’s report confirmed what a lot of people here have been saying for years—that we need to do a better job investing in our future as a region.

Why now?
Let’s look at the facts. According to the Canada Venture Capital and Private Equity Association, the amount of capital that’s invested in Canadian knowledge-based companies is less than half of what’s currently invested in the U.S. Perhaps more pertinently, investments in those firms here in Atlantic Canada are less than half the Canadian average. Do the math; we’re at a distinct disadvantage here on the East Coast, and we need to catch up to the rest of North America, and the world, to remain competitive. So my intention was to first make the announcement that Nova Scotia is prepared to take the lead on this initiative, then to discuss the idea with my provincial counterparts, which I did in late November at the Atlantic Premiers’ Conference.

How was the idea received?
Very well. We all fundamentally understand and agree upon the necessity of investing in our region, so now it’s only a question of developing and finalizing an arrangement that will benefit everyone involved. 

How far along in that process are you?
Things are coming together much quicker than I had first anticipated. We don’t have an exact completion date in place yet, because details are still being ironed out on which of the provinces are going to be involved and in what kind of capacity, and we still have to see about the level of interest from both the federal government and private investors, but I expect it to be a done deal sooner rather than later. 

What has the initial response been like from the private sector?
It has been overwhelming, to say the least. We have literally been swamped with phone calls and emails from private equity holders from across the region and beyond, offering their support and interested in participating in the process.  

What does that tell you?
That people are paying attention. It also says that more people are beginning to acknowledge that we’re a regional economy here in Atlantic Canada, and that we must start thinking and acting accordingly by investing in our future in a collective capacity. We tend to undervalue ourselves on the East Coast, and it’s clear that we don’t put enough effort into our potential to grow as an integrated economy, especially when it comes to our entrepreneurs.

Is start-up funding the biggest hurdle?
There’s no doubt about it. The problem has been that there really aren’t any federal funds in place in Atlantic Canada for this kind of thing. If the Atlantic provinces take a leadership role on venture capital investment, we’ll be able to leverage money from both the federal government and the private sector in the years ahead. There’s a lot of low-hanging fruit here that we can collect immediately to bolster that initial fund. Once we do, we can create a virtual circle that will propel investment.

Is there any resistance to that idea?
That skepticism isn’t unwarranted. There have been a number of efforts in the past to undertake this kind of initiative, but they were all overburdened with administration and didn’t perform the way either the provinces or private investors wanted them to. This is an opportunity for us to re-set on the question of venture capital in Atlantic Canada.

Do you see it as a step toward financial independence for the region?
I do. I believe that it’s an essential piece of our economic puzzle, and it underscores our seriousness to break away from federal transfer funding, to generate our own wealth, and to drive our own destiny.

Is it another step toward regional inter-dependence?
Absolutely. 

That’s another matter that has encountered resistance in the past.
Again, I believe that those doubts aren’t without some merit, because previous efforts to develop and implement cross-regional policies and strategies have been unsuccessful for the most part. Whether that has been because of competing economic interests, cultural or social differences, or whatever reason, the important thing is that we put it in the past and stay focused on the present and the future.

Why would things be different now?
We live in a completely different economic climate than we did even a decade ago. Certainly the demand for our products and services is stronger than it has ever been, but so is the level of competition. We’re now contending with countries around the world. It’s no secret that there is strength in numbers—that we work best when we work together, and that collectively as a region we have more power. Our hope is that this fund will go a long way toward strengthening those ties.