The Business Development Bank of Canada (BDC) has existed under different names and mandates since 1944.
Industrial Development Bank (IDB)
1944 – 1975
On September 30, 1944, the Canadian Parliament proclaimed the creation of the Industrial Development Bank (IDB)—the first name under which BDC was known.
- IDB was initially established as an arm of the Bank of Canada and the Governor of the Bank was also Chief Executive Officer of IDB.
- The IDB Act was part of a series of measures taken by the federal government aimed at restructuring the Canadian economy after the Second World War. Its first role was to help small manufacturers convert their facilities to peace‑time operations.
- During the early years, the majority of IDB loans went to machine shops, chemical plants, sawmills, ceramic plants, textile and garment factories, flour mills, bakeries, auto parts manufacturers and metal-casting companies.
- In 1952, the IDB Act was amended to allow lending to commercial air services; by the mid-1950s, one out of every 10 planes in Canada was financed by IDB.
- The IDB Act was amended several more times to allow the Bank to give loans to almost all types of businesses that could not find financing under reasonable conditions elsewhere. By 1975, the Bank had authorized some 65,000 loans to 48,000 businesses that were creating thousands of new jobs.
- IDB was one of the first and largest development banks in the world, and was internationally recognized as one of the most effective.
- Realizing that small business owners need more than financing, during the 1970s IDB became the first national organization to provide management services such as counselling, training and planning for small businesses.
- The federal government expanded IDB's mandate so it could be a “one-stop shop” for small businesses. Its link with the Bank of Canada was severed and a separate crown corporation was created in 1975—the Federal Business Development Bank (FBDB).
The Industrial Development Bank era—between 1944 and 1975—is covered in the book IDB: A History of Canada’s Industrial Development Bank, by E. Ritchie Clark. Available in hard copy only.
Federal Business Development Bank (FBDB)
1975 – 1995
The Federal Business Development Bank (FBDB) succeeded IDB on October 2, 1975. A Management Services division was officially created and FBDB became a venture capital investor.
- In October 1979, was organized the first edition of Small Business Week, which to this day remains a “must-attend” event for Canadian entrepreneurs.
- To service its growing client base, FBDB began to decentralize authority for approving loans. By 1980, FBDB had 104 offices across Canada.
- Over its 20 years, the Bank developed innovative products and services for small business owners, while maintaining close relations with its partners in the public and private sectors.
- In response to increased globalisation, a rapidly evolving financial services sector and the shift from a resource-based to a knowledge-based economy, policy makers revisited FBDB’s role in 1995.
Business Development Bank of Canada (BDC)
1995 – Today
On July 13, 1995, the Parliament of Canada passed the Business Development Bank of Canada Act, which redefined and updated the structure and mandate of FBDB.
- The Bank ceased being a “lender of last resort” and began offering services that were complementary to those available at other financial institutions, underscoring the fact that all of its clients would have banking relationships with other private and/or public financial institutions for traditional types of banking services.
- The Business Development Bank of Canada (BDC) was asked to fill gaps in the lending market by also focusing on the financial needs of small businesses that were exporting or in the knowledge-based industry, while continuing to support traditional sectors. BDC's mandate included other areas considered neglected by the private sector (Aboriginals, women and young entrepreneurs).
- BDC was also required to obtain a return on equity equivalent to the government's cost of funds.
- BDC launched numerous innovative programs in keeping with its new mandate. It reengineered its products and services to provide global solutions at every step of small business development and began offering venture capital as well as growth and business transition capital.
- The Management Services Department, renamed the BDC Consulting Group, also upgraded its integrated solutions to increasingly focus on productivity and innovation.
- Fiscal 1997 marked a vital step in BDC's evolution. The bank posted a record profit of $50.7 million and declared the first dividend in its history.
- In fiscal 2001, BDC created its Aboriginal Banking division, built a network of Aboriginal management consultants and developed consulting services specifically for this market.
- Every ten years, the Minister of Industry conducts a review of the provisions and operations of BDC’s Act. The Bank's mandate was renewed in April 2002, for a period of ten years. A new legislative review started in 2010.
- In 2008, BDC entered into a partnership with Futurpreneur – an organization that provides funding, mentorship and support to young Canadian entrepreneurs. Since then, BDC has been supplementing Futurpreneur’s financing to make it easier for young business owners to access capital.
- In 2010, BDC started a review of the Canadian venture capital industry and BDC’s role in it. In order to fill the gaps in the ecosystem, BDC Capital launched a new VC strategy. Among other things, in 2013, BDC Capital launched three internal funds focusing on healthcare, IT/telecommunications, clean energy and technology.
- In 2011, BDC and Export Development Canada (EDC) signed a protocol to ensure that Canadian companies looking to expand their business in global markets have access to the services and financing they need.
- The Montreal Group, initiated by BDC, was established in 2012 as a global forum of international financial development banks.
- BDC has been named one of Canada's Top 100 Employers for 13 years. (from 2007 to 2018 and 2020)
- It’s in 2014 that BDC became the first financial institution in Canada to receive the B Corp certification. This certification is part of a growing international movement that aims to use the power of businesses for broader societal good.
- BDC launches a strategy focusing on helping women-owned businesses grow and succeed at every stage of their development. In 2015, BDC commits to increasing its term lending to at least $700 million over the following three years. In 2018, the Bank doubles its lending target for majority women-owned businesses to $1.4 billion over five years.
- In 2016, BDC modernizes its brand identity to be more visible and better connect with entrepreneurs. The Bank launches a new logo and a new signature – financing. advising. smarts. The new brand image reflects BDC’s unique combination of solutions and its unique role as Canada’s bank devoted to Canadian entrepreneurs.
- BDC Capital’s Women in Technology Venture Fund completes its first year of investments in 2019, since the size of the fund almost tripled to $200 million, making it the largest venture fund of its kind.
- Between 2009 and 2019, BDC has conducted more than 50 studies on topics of interest for small and medium-sized businesses.
- The Bank starts digitizing its operations to ease entrepreneurs’ access to its services. All BDC account managers are equipped with mobile devices and can authorize customer loans in less than 30 minutes. Business owners can also apply for a loan online at bdc.ca.
- BDC Capital, the investment arm of BDC, opens two of its captive funds – the IT Venture Fund and the Healthcare Venture Fund – to private investors. This led to the creation of Framework Venture Partners and Amplitude Ventures in 2019. That same year, BDC Capital launched a new $250 million direct investment fund focused on innovation in the industrial sector – the Industrial Innovation Venture Fund.