An audit by the Department of Industry has revealed that a taxpayer-backed loan program for aspiring entrepreneurs,Futurpreneur Canada, has incurred over $45 million in write-offs. Blacklock's Reporter says the program, designed to help young Canadians start businesses, has faced criticism for its high rate of loan defaults and lack of transparency.The Evaluation Of Futurpreneur Canada report noted, “Many Canadian entrepreneurs’ biggest concern was related to financial support for themselves and their business ventures,” highlighting the unique challenges young people face when accessing startup capital. Futurpreneur offers loans of up to $60,000 without requiring collateral, but only 37% of applicants — 4,345 out of 11,877 — were approved for funding over the past five years.Despite its ambitions, the program has struggled with repayment issues, with auditors finding that a third of approved borrowers “had challenges” with their loans. These difficulties led to $45.9 million in loan write-offs, though the audit did not specify how many borrowers were delinquent or declared bankruptcy.One of the program's most notable recipients is Félix Marzell, the owner of Montréal design agency Dix au Carré. Marzell, who received Futurpreneur funding, also secured a $25,050 National Research Council grant and a $17,160 Parks Canada contract while his wife, Mélanie Joly, was serving as Foreign Minister. “She has recused herself from all discussions related to Dix au Carré,” a spokesperson for Joly previously stated.Futurpreneur program managers have refused to disclose the names of other borrowers or details such as the average size of the loans. The Office of the Information Commissioner criticized the program in 2016 for breaching the Access To Information Act by withholding details requested by reporters.During a 2013 Senate finance committee hearing, Raquel Fragoso-Peters, then-director of the Industry Department’s small business branch, declined to provide specifics on loan outcomes, stating, “We do not actually have the data.” Sen. Diane Bellemare questioned the program's oversight, asking, “You must do a follow-up when young people are granted a loan; what is the lifetime of these businesses?” Fragoso-Peters could not provide a direct answer.A 2019 audit estimated that 15 to 20% of loans were in arrears at any given time, with write-offs as high as 19%. The program, originally launched in 1995 as the Canada Youth Business Foundation, offers loans at prime plus 3% interest, with borrowers required to make interest-only payments for the first year and repay the full amount within five years. Participants must also enroll in a two-year mentoring program to receive guidance from federal consultants.The latest evaluation also revealed that 34% of loans went to Quebec-based entrepreneurs, a disproportionately high number compared to other provinces, though no explanation was provided.
An audit by the Department of Industry has revealed that a taxpayer-backed loan program for aspiring entrepreneurs,Futurpreneur Canada, has incurred over $45 million in write-offs. Blacklock's Reporter says the program, designed to help young Canadians start businesses, has faced criticism for its high rate of loan defaults and lack of transparency.The Evaluation Of Futurpreneur Canada report noted, “Many Canadian entrepreneurs’ biggest concern was related to financial support for themselves and their business ventures,” highlighting the unique challenges young people face when accessing startup capital. Futurpreneur offers loans of up to $60,000 without requiring collateral, but only 37% of applicants — 4,345 out of 11,877 — were approved for funding over the past five years.Despite its ambitions, the program has struggled with repayment issues, with auditors finding that a third of approved borrowers “had challenges” with their loans. These difficulties led to $45.9 million in loan write-offs, though the audit did not specify how many borrowers were delinquent or declared bankruptcy.One of the program's most notable recipients is Félix Marzell, the owner of Montréal design agency Dix au Carré. Marzell, who received Futurpreneur funding, also secured a $25,050 National Research Council grant and a $17,160 Parks Canada contract while his wife, Mélanie Joly, was serving as Foreign Minister. “She has recused herself from all discussions related to Dix au Carré,” a spokesperson for Joly previously stated.Futurpreneur program managers have refused to disclose the names of other borrowers or details such as the average size of the loans. The Office of the Information Commissioner criticized the program in 2016 for breaching the Access To Information Act by withholding details requested by reporters.During a 2013 Senate finance committee hearing, Raquel Fragoso-Peters, then-director of the Industry Department’s small business branch, declined to provide specifics on loan outcomes, stating, “We do not actually have the data.” Sen. Diane Bellemare questioned the program's oversight, asking, “You must do a follow-up when young people are granted a loan; what is the lifetime of these businesses?” Fragoso-Peters could not provide a direct answer.A 2019 audit estimated that 15 to 20% of loans were in arrears at any given time, with write-offs as high as 19%. The program, originally launched in 1995 as the Canada Youth Business Foundation, offers loans at prime plus 3% interest, with borrowers required to make interest-only payments for the first year and repay the full amount within five years. Participants must also enroll in a two-year mentoring program to receive guidance from federal consultants.The latest evaluation also revealed that 34% of loans went to Quebec-based entrepreneurs, a disproportionately high number compared to other provinces, though no explanation was provided.
