Canada, with its community of researchers and innovators, has been a global leader in the life sciences sector over the past decade. Canada's biotech industry ranks third behind the US and UK in generating revenues, second to the US in terms of number of biotech companies and first in research and development expenditures per employee.

The main issue that Canadian life sciences companies face today is access to funding. Industry participants confirm that securing adequate financing is the most crucial factor to their successful development and growth and that challenges in obtaining such financing in the number one barrier to successful commercialization of intellectual property.

The venture capital industry is a crucial source of the funding which life sciences companies require. However, the venture capital industry has had a difficult time over the past five years both raising new money and investing in individual companies.

Both the federal and provincial governments have been searching for ways to improve and enhance venture capital performance. Most recently, the British Columbia government has facilitated the formation of the Renaissance Capital Fund and agreed to invest $90 million of the intended $450 million to be raised by the Fund. The BC government has agreed that the Fund will be managed by private sector managers without intervention or interference from the provincial government and will not let politics influence the Fund's investment decisions.

There are rumours that the Ontario government will shortly announce the formation of a similar type fund into which it will make a significant investment and will take a "hands-off" approach to the fund's operation and investment decisions.

It will be interesting to follow the progress of these new government promoted funds and their impact on the venture capital industry.