There’s no question that Canada is good at getting companies off the ground. In fact, we’re ranked second in the world by the World Economic Forum when it comes to the ease of establishing a new firm. There are more than a million small and medium-sized businesses in Canada today, driving more than half of our GDP. Yet while we may be great at kick-starting new businesses, we’re not as good at actually growing them.

As detailed in a report by the Minister of Finance’s Advisory Council on Economic Growth, the struggle for businesses to scale up is an issue in this country for many reasons, including our small and often fragmented local markets, a shortage of experienced talent, and business owners’ aversion to risk. But arguably, the most pressing issue facing small firms has been the lack of accessible, long-term capital. In fact, while many mid-market Canadian companies have identified growth as their primary objective, a shortage of capital to fund that growth has meant that many entrepreneurs are unable to scale-up to achieve the opportunities afforded to large businesses.

As the report indicates, one only has to look to our U.S. counterparts to see the disparity: while small firms account for about half of business sector employment in Canada, that number is just over a third in the United States. This lack of scale accounts for 20 per cent of the labour productivity gap between Canadian and U.S. businesses – among many other issues – including smaller and longer exits for Canadian companies compared with our neighbours to the south.

Furthermore, the report outlines that capital available for growth and expansion is far more restricted in Canada; for every $1 available to start-up firms, 82 cents is directed towards firms in the expansion stage, compared with $1.92 available for expanding companies in the U.S. A survey completed by the Business Development Bank of Canada found that more than twice as many fast-growing companies in Canada vs. high-growth firms in the U.S. said insufficient access to risk capital was their greatest concern.

The report also notes that these factors and more take a toll on our ability to compete on a global scale. Consider that in 1990, Canada was home to 18 global industry leaders, while in 2015 that number had plummeted to a mere five.

That’s why the Advisory Council recommended the creation of a private, sector-led growth fund to provide investments in established and high-growth businesses in order to further a vibrant, innovative and diversified economy. And that’s exactly why Canada’s leading banks and insurance companies came together to form the Canadian Business Growth Fund (CBGF).

As an evergreen investment fund with an initial capital commitment of $545 million and projected future contributions of $1 billion, CBGF has a unique national mandate to provide long-term, patient, minority capital to ambitious entrepreneurs to fund growth and expansion of their mid-market businesses with investments between $3 and $20 million. Entrepreneurs no longer need to look south of the border to secure the capital they need to grow, nor give up control of their business to move forward. At CBGF we are committed to long-term partnerships with the companies we invest in, and aim to connect business leaders and sector experts to help entrepreneurs contribute to a healthy ecosystem of innovation, and achieve their full potential as key drivers of productivity and employment.

There is a precedent for this approach. In fact, CBGF operates in a similar way to the UK-based Business Growth Fund (BGF). Since its launch in 2011, BGF has invested £1.4billion and has become the UK and Ireland’s most active investor in private companies, backing 220 companies that employ close to 50,000 people.

Ultimately, there’s no question that growth capital is good for Canada, driving economic activity, productivity, increased employment, exports and growth. With access to more of it, Canadian mid-market businesses now have an even greater opportunity to scale up to become strong and respected marketplace leaders regionally, nationally and around the world. It’s time that Canada was known as a great place to grow – not just start – a business. It’s our hope the CBGF can contribute to this transformation.