August 8, 2016 / 2:32 PM / 3 years ago

Bank of Canada backs small business fund by lenders: report

A man is reflected in a window while walking past the Bank of Canada office in Ottawa, Ontario, Canada, May 25, 2016. REUTERS/Chris Wattie - RTSFVZD

OTTAWA (Reuters) - The Bank of Canada wants the country’s banks to start a fund that would invest in small- and medium-sized businesses in Canada to help foster better global expansion for domestic firms, according to a report from the Globe and Mail.

The plan would see banks and potentially pension funds and insurers put money into a private sector fund of at least C$1 billion ($767.99 million) that would make debt and equity investments of C$2 million to C$20 million in Canadian companies, the newspaper reported on Monday.

The initiative is still at an early stage, according to the report, which cited a briefing on the fund prepared by Canadian Imperial Bank of Commerce (CM.TO). Bank of Canada Governor Stephen Poloz and CIBC Chief Executive Victor Dodig are both proponents of the fund, the Globe said.

The Bank of Canada said it does not comment on commercial decisions of financial institutions.

The fund is modeled on a similar bank and government sponsored fund in Britain, the Business Growth Fund, that was launched in 2011. The fund is backed by five major British banks and has up to 2.5 billion pounds ($3.28 billion) with which to make equity investments in small and medium firms.

Reporting by Leah Schnurr; Editing by Chizu Nomiyama

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