[David Perry followed Canada’s company-building problem upstream—and found a capital system that was starving technology startups before leadership ever got the chance to matter.]
Why is a headhunter leading Canada’s Flowthrough Shares for technology campaign?
It’s a fair question.
David E. Perry has spent more than four decades recruiting executives, not drafting tax legislation. He is the Managing Partner of Perry-Martel International and the author of books about leadership, hiring and job hunting. Tax policy is not the obvious next chapter.
Yet Perry is leading the campaign to extend Canada’s Flow-Through Share mechanism to qualifying technology startups. The reason is simpler than it first appears: he followed the company-building problem upstream.
The Problem Looked Like Recruiting—Until It Didn’t
Executive recruiters are usually called after a company has capital, momentum and a growth mandate. A founder needs an experienced CEO. A board needs a CFO who can manage institutional investors. A promising product needs a CRO who can turn early traction into a repeatable commercial engine.
“I’ve spent more than 40 years recruiting executives. So why the hell am I trying to change Canada’s tax code? I followed the growth problem upstream.”
Perry has spent a career working at those inflection points. He has seen what happens when the right leader arrives at the right moment—and what happens when a company waits until the leadership gap has become a crisis.
But another pattern kept appearing. Some Canadian companies did not have a leadership problem yet. They had a financing problem first. They could not raise enough patient risk capital, early enough, to commercialize the technology, build the management team and compete at scale.
You cannot recruit a world-class leadership team into a company that never gets the runway to build. Capital and leadership are not competing explanations for growth. They are the two requirements that make growth possible.
Canada Produces Builders. Other Capital Markets Activate Them.
Canada is not short of technical talent, entrepreneurial ambition or research. The uncomfortable question is what happens after those ingredients exist.
Recent data identified more than 500 U.S.-based technology companies with Canadian founders or founders educated in Canada. Together, they had raised roughly US$414 billion. That evidence does not tell us why every founder moved or where every company should have been built. It does show where talent, capital and company formation have compounded.
Perry’s response is deliberately unsentimental: American investors are not stealing Canadian entrepreneurs. They are financing them. Canada’s job is not to complain about Silicon Valley. It is to compete with it.
When the first meaningful cheque, the investor network and the path to later rounds all come from the United States, the company naturally enters the American capital system. The downstream consequences—headquarters, leadership roles, intellectual property, supplier relationships and future founders—often follow that system.
Why Flow-Through Shares?
Because Canada already has a mechanism designed for businesses that must spend money long before they can generate taxable income.
Under the existing Flow-Through Share system, eligible resource companies can renounce qualifying expenses to investors. The investors can claim those expenses as deductions, improving the risk-reward equation, while the issuing company raises equity capital for exploration and development.
The FTS-Tech proposal adapts that principle for qualifying technology expenditures. A young technology company investing heavily in product development and commercialization may have little taxable income against which to use its deductions. Flowing approved expenses through to investors can make the shares more attractive and help the company raise private capital sooner.
That distinction matters. The proposal is not Ottawa writing technology companies $500 million in cheques. Investors would purchase shares and put their own capital at risk. Government would provide a tax incentive through qualifying deductions, but private investors—not a committee of officials—would decide which companies receive the money.
What the FTS-Tech Campaign Is Asking For
The campaign recommends a three-year FTS-Tech pilot supporting up to $500 million annually in qualifying technology expenditures financed through Flow-Through Shares.
The $500 million would be private investors’ risk capital. The pilot would establish eligibility rules, expenditure definitions, reporting obligations and compliance oversight. It would then produce evidence: how much private capital was mobilized, which kinds of companies used it, what commercialization activity occurred and whether the mechanism should be continued or changed.
This is not a request for a permanent blank cheque. It is a request to test a proven Canadian capital-formation mechanism in a sector where early commercial risk routinely outruns conventional financing.
Why Perry?
Perry is not claiming to be a tax lawyer, an economist or a venture capitalist. Technical design requires all of those disciplines. What he brings is a perspective that often disappears when the discussion is divided among tax policy, innovation programs and capital markets.
He sees companies as leadership factories.
A successful Canadian technology company does more than create jobs. It teaches people how to commercialize innovation, sell internationally, raise capital, manage complexity and build teams. Its employees become executives. Its executives become founders, investors, directors and mentors. One company can seed an entire entrepreneurial family tree.
That is why the loss is larger than one headquarters or one financing round. When a company scales somewhere else, much of that leadership-development engine scales there too.
Perry also knows how to turn a complicated problem into a direct question. Canada already uses Flow-Through Shares to persuade private investors to finance difficult, risky work in the resource economy. Why should qualifying technology commercialization be treated as though Canada has never solved this kind of problem before?
This Is Not an Anti-American Campaign
Perry has spent decades working across the Canada-U.S. border. He does not want a weaker America. He wants a stronger Canada.
Strong Canadian companies become customers, partners, employers and competitors for American businesses. More Canadian investment does not require less American investment. It gives founders a credible Canadian option before a U.S. term sheet becomes the only serious term sheet available.
That is the real objective: choice. Founders should be able to choose capital based on what is best for the company, not because Canada failed to produce an investable alternative.
The Leadership Argument Lives at Perry-Martel International
CanFlowThrough.com makes the policy case for FTS-Tech. Perry-Martel International explains the other half of the equation: what happens when capital reaches a company and leadership has to convert it into growth.
That deeper argument examines why financing rounds create leadership inflection points, why companies can outgrow their original management structures and why great companies do not merely create employment—they create leaders.
Read the full PMI authority page: Why the Hell Is a Headhunter Trying to Change Canada’s Tax Code?
What Perry Wants Canadians to Do
He wants founders to describe where the financing system fails them. He wants investors to assess whether the mechanism would change their willingness to finance early commercial risk. He wants executives to recognize that every company Canada fails to finance is also a leadership platform Canada never creates.
And he wants parliamentarians to stop treating capital formation as a side issue in innovation policy. Grants and tax credits can support activity. A functioning private-capital market determines whether enough companies are created, financed and given the chance to compound.
Canada does not need another program that treats entrepreneurs primarily as applicants. It needs a mechanism that treats Canadians as investors and gives them a reason to put their own money behind Canadian technology.
The headhunter is in the tax-code debate because he has spent four decades watching what happens after capital meets leadership—and too many years watching Canadian potential fail to reach that meeting.
Support the campaign: Add your name to the public supporters of FTS-Tech and ask your Member of Parliament to support a three-year pilot.
