Equity Crowdfunding in Canada, Province by Province

Since 2015, Canadian creators may resort to equity crowdfunding to finance their businesses. However, the conditions that apply to take advantage of this new funding mode vary from province to province and from territory to territory.

Two equity crowdfunding systems

Equity crowdfunding is a form of crowdfunding by which investors do not receive rewards, as is the case with platforms such as Kickstarter and Indiegogo, but instead acquire a stake in the company to which they are contributing.

In Canada, there are two different systems, also called “prospectus exemptions”, that give access to this funding model. These systems set forth the rules implemented by the certain provinces’ securities regulators to legalize and regulate equity crowdfunding campaigns aimed at the general public.

All equity crowdfunding campaigns must be carried out on a web portal that is specially designed for this type of funding (e.g., StellaNovaGoTroo and FrontFundr) and meet all of the conditions set forth in one of the two exemptions. Only the residents of a province where the exemption applies can take part in the campaign.

Start-up Crowdfunding Exemption (45-316)

The first equity crowdfunding exemption that was implemented in Canada (in 2015) is sometimes referred to as a “small exemption” or “junior exemption.” It is easier for businesses to implement, namely because there is no obligation to provide financial statements. However, the company cannot raise more than $250,000 during a given campaign.

This exemption comes with the following conditions:

  • Maximum amount that the issuer can raise: $250,000 per campaign (maximum of two campaigns per year)
  • Maximum amount that can be raised from individual investors: $1,500
  • Obligation to provide financial statements: no
  • System open to reporting issuers (usually publicly quoted companies): no

Regulation Respecting Crowdfunding (45-108)

This exemption was implemented in 2016 and is more stringent on businesses than the start-up crowdfunding exemption. However, it provides a higher funding ceiling.

  • Maximum amount that the issuer and members of the issuer group members can raise: $1.5 million
  • Maximum amount that can be raised from individual investors: $2,500 (or $25,000 from qualified investors, such as wealthier investors), except in Ontario, where the maximum is set at $10,000 (or $50,000 from qualified investors) per year.
  • Obligation to provide financial statements: yes
  • System open to reporting issuers (usually publicly quoted companies): yes

For more information on the rules applying to equity crowdfunding, read Equity Crowdfunding in Canada.

Equity crowdfunding province by province

To participate in an equity crowdfunding campaign, a public investor must reside in a province where the exemption the company is used is available.

For example, a Quebecker can invest in the crowdfunding campaign of an Ontario-based company by virtue of the Regulation Respecting Crowdfunding (45-108) seeing as the regulation applies in both provinces. However, an Ontario resident cannot invest in the campaign of a Québec-based company by virtue of the Start-up Crowdfunding Exemption (45-316) seeing as that exemption does not apply in Ontario.

In the same line of thinking, a Manitoba resident can invest in Nova Scotia, where both exemptions apply. However, a resident of Prince Edward Island cannot.

Here are the systems that are available to businesses wishing to launch an equity crowdfunding campaign with the general public, according to Canadian province or territory (April 2016):

Alberta: No exemption is currently available in Alberta. However, the province is at work with Nunavut to develop its own start-up crowdfunding exemption (MI 45-109) to make equity crowdfunding available to the general public.

British Columbia: British Columbia authorizes equity crowdfunding through the Start-up Crowdfunding Exemption (45-316).

Prince Edward Island: No exemption is currently available on Prince Edward Island.

Manitoba: Manitoba authorizes equity crowdfunding through the Start-up Crowdfunding Exemption (45-316) and the Exemption Respecting Crowdfunding (45-108).

New Brunswick: New Brunswick authorizes equity crowdfunding through the Start-up Crowdfunding Exemption (45-316) and the Exemption Respecting Crowdfunding (45-108).

Nova Scotia: Nova Scotia authorizes equity crowdfunding through the Start-up Crowdfunding Exemption (45-316) and the Exemption Respecting Crowdfunding (45-108).

Ontario: Ontario authorizes equity crowdfunding through the Exemption Respecting Crowdfunding (45-108).

Québec: Québec authorizes equity crowdfunding through the Start-up Crowdfunding Exemption (45-316) and the Exemption Respecting Crowdfunding (MI 45-108).

Saskatchewan: Saskatchewan authorizes equity crowdfunding through the Start-up Crowdfunding Exemption (45-316).

Newfoundland and Labrador: No exemption is currently available in Newfoundland and Labrador.

Nunavut: No exemption is currently available in Nunavut. However, the territory is at work with Alberta to develop its own start-up crowdfunding exemption (MI 45-109).

Northwest Territories : No exemption is currently available in the Northwest Territories.

Yukon : No exemption is currently available on the Yukon territory.


Industry & Market Trends | Veille stratégique
The Industry and Market Trends team is composed of Director Catherine Mathys, analysts Pierre Tanguay and Sabrina Dubé-Morneau, as well as editorial coordinator Laurianne Désormiers. Once a year, the team publishes a Trends Report that draws a portrait of the macro trends that are shaping today’s screen-based industries.
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