- Canada’s lack of clear policies on digital assets creates uncertainty for innovation and investment.
- Venture capital activity in Canadian tech has dropped to pandemic-era lows as other countries advance digital regulation.
- Regulatory challenges and high taxes drive tech talent and businesses out of Canada.
- Current restrictions limit the use of stablecoins and access to banking for crypto businesses.
- Industry leaders call for targeted tax relief, better talent retention, and updated regulations to keep Canada competitive.
Canada faces growing uncertainty about its stance on digital asset innovation following ongoing political inaction. As of the latest federal election, none of the major parties included cryptocurrency or digital asset regulations in their campaign platforms, leading to concerns about Canada’s approach to global competition in this sector.
Data from the Canadian Venture Capital and Private Equity Association (CVCA) report that seed investment deals in the tech sector dropped to levels seen during the pandemic in the first quarter of 2025. This decline comes as regulators in the United States, Europe, and Asia make significant progress toward providing regulatory clarity and encouraging industry growth.
“Canada risks falling behind by not embracing the tools to unlock global trade and innovation elsewhere without a shift in approach,” said Jillian Friedman, chief operating officer at Symbiotic. She also points out that the recent appointment of Evan Solomon as Canada’s minister of Artificial Intelligence and digital innovation could help advance the sector, depending on government action.
Friedman notes that Canada has strong science and technology institutions, such as the Vector Institute and MILA, but a large share of software engineering graduates leave the country. According to this source, up to two-thirds of STEM graduates emigrate for better opportunities, citing limited capital access and demanding tax regimes. Friedman highlights that Portugal, as an example, offers targeted tax relief to keep tech professionals.
The article also addresses stablecoins, which are cryptocurrencies linked to real-world currencies like the U.S. dollar. Friedman states that restrictions on stablecoins by Canadian regulators have limited access for both businesses and consumers. Laws currently vary by province, and the Canadian Securities Administrators (CSA) have classified stablecoins as securities. There is a call for policies that enable a Canadian-dollar stablecoin for global trade.
Additionally, crypto-related businesses in Canada face significant difficulties accessing basic banking services. By contrast, banking institutions in the other G7 nations have implemented procedures that allow crypto businesses to operate while mitigating risks tied to anti-money laundering requirements.
Friedman urges the government to provide tax relief and incentives for entrepreneurs to address Canada’s “brain drain” and to reassess current regulations to encourage innovation. While Canada is known for leadership in financial services, its current approach may limit future potential, according to sector observers.
This article is based on the views of Jillian Friedman, chief operating officer of Symbiotic, and does not constitute legal or investment advice. Hyperlinks to original sources: appointment of Evan Solomon, STEM graduates, capital gains taxes, Canadian Entrepreneurs Incentive.
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