Ontario’s Progressive Conservative government has eliminated all provincial funding this year for Futurpreneur Canada, a national non-profit that supports young entrepreneurs. The Ministry of Economic Development, Job Creation and Trade is not going ahead with $1.2-million in scheduled funding for the organization for the 2019-2020 fiscal year.
Last year, the ministry disbursed $1.2-million to Futurpreneur, which offers loans and mentoring to entrepreneurs aged 18 to 39. Most of the money had been used as loan capital, with the rest helping to fund a program for newcomers launching businesses.
Futurpreneur chief executive officer Karen Greve Young says workshops for newcomers will end, but no staff positions were eliminated. The organization has an operating budget of about $12-million, and uses a separate fund and a partnership with the Business Development Bank of Canada (BDC) to lend out money, dispensing $22.5-million dollars last year. Futurpreneur also receives funding from the federal government, other provinces, and private-sector partners.
“In the long term, we know Ontario will be an important partner again,” Ms. Greve Young said. “We’ve had conversations with the government about helping them understand the important work entrepreneurs are doing in the community and understanding the value of funding that.”
Christine Wood, press secretary for the Minister of Economic Development, Job Creation and Trade, said in an e-mail that the government is getting its fiscal house in order. “We are focusing our efforts on ways to support businesses that have a direct impact – reducing red tape and creating an environment where businesses can thrive, invest and generate good jobs for the people of Ontario. We continue to have a great working relationship with Futurpreneur."
The provincial government recently made cuts to Small Business Enterprise Centres and other startup and innovation programs. Premier Doug Ford has been cutting spending in an attempt to balance the budget before the next provincial election.
Despite the cuts, Futurpreneur is set to announce on Tuesday that it is increasing the maximum value of the loans it offers to entrepreneurs. It is able to tap into its existing loan fund and will be getting more money from the BDC.
The maximum loan from Futurpreneur will rise immediately to $60,000 from $45,000. Ms. Greve Young says the money will give a meaningful boost to participants, many of whom are women or are located outside of major centres.
“The entrepreneurs we serve for the most part don’t have property they can borrow against," Ms. Greve Young said. "They don’t have family they can borrow from and they’re not necessarily in the type of business that is attractive to equity investors, but they definitely need money to get things started.”
Andrew Zakharia, an accountant who works with small businesses, said the boost in Futurpreneur’s loan size will fill an important need.
“If you go to most lenders and say, ‘I have an idea for a business,’ they’re not going to fund that," he said. "This is one of the few sources of funding available for many young entrepreneurs.”