The BDC Legislative Review 20102022 states that [t]he Business Development Bank of Canada (BDC) is a financial Crown corporation wholly owned by the Government of Canada that provides support to small and medium-sized enterprises (SMEs) and entrepreneurs.” In addition, “[t]he BDC is required to operate as a complementary player in the market, offering financing, capital, and advisory services for Canadian entrepreneurs that fill out or complete offerings available from private sector providers.”

Although the positive impact of the BDC was well documented, many gaps and barriers were also identified. For example, as of 2022, the BDC had assets of $47.8 billion committed to 95,000 SMEs, but only 54 co-operatives were part of its client portfolio, and this number has remained low through the years.

Moreover, the report has an entire section which emphasizes that co-operatives (as well as social enterprises) are underserved, and that additional focus is needed to support them. This section also recognized that co-operatives, along with social enterprises, “operate within unique contexts that require a clear understanding of their business models by lenders, as well as eligibility criteria that explicitly express support for and target this subset of businesses.” 

CMC strongly endorses the recommendation on page65 of the report, that BDC should consider expanding and clarifying eligibility requirements to better meet the needs of new businesses, co-operatives, and social enterprises.

In fact, CMC along with Buy Social Canada (BSC) and the Canadian Community Economic Development Network (CCEDNet), have offered to assist the BDC in accelerating action on this recommendation, by helping to improve reach and visibility, addressing accessibility, and building strong partnerships to fill market gaps 

BDC’s action on this would be aligned with the Minister of Small Business’s mandate letter to expand borrower eligibility in the Canada Small Business Financing Program to include non-profit and charitable social enterprises. It would also be a timely complement to the Social Finance Fund which is available to co-operatives, non-profits, charities, and other social purpose organizations.

The Path Forward

The Legislative Review Report confirmed CMC’s understanding that the BDC does not currently have the expertise to serve the 25,000-strong social enterprise and co-operative sectors. And yet, co-operatives and social enterprises make up a vital part of Canada’s small business landscape.

CMC and others are advocating for the BDC to amend its policies, procedures, and practices to include the implementation, measurement and reporting of specific programs to increase the number of co-operatives and social enterprises in BDC’s broader capacity building and lending portfolios.

CMC is also seeking a commitment by the Government of Canada and the BDC to explore formal partnerships and an allocation of funds to better serve, and ensure accessibility for non-traditional business models. This would include providing capacity-building tools, resources, consulting and financing for emerging co-operatives and social enterprise businesses, as well as providing internal training and support to BDC staff. 

Additional Information

If you are interested in learning more, CMC encourages you to read the following: