In an effort to encourage activity in the Canadian venture capital community, Prime Minister Stephen Harper has set aside C$400 million (US$407 million) to stimulate private-sector investments in the country, Global News reports.

Harper admitted during a news conference that Canada’s venture capital markets have been faced with “mixed results” over the past 10 years, especially during the recent economic crisis.

His Venture Capital Action Plan sets aside C$250 million for new funds in cooperation with provinces or investors. An additional C$100 million will go toward pre-existing funds and C$50 million will be put into “high-performing Canadian venture capital funds,” according to the report. The money will be disbursed over the next seven to 10 years.

“Our government firmly believes strong action is required to bolster the available risk capital in Canada,” Harper said, while on the set of “Dragon’s Den“, a television show that features entrepreneurs pitching to venture capitalists.

Finance Minister Jim Flaherty noted that the plan’s focus is to help keep young entrepreneurs in Canada rather than seeing them head to America or to big corporations.

The Canadian government is open to a little outside help. In a statement on Monday, it said that one of its goals was to get more experienced fund managers operating in the country, possibly by “attracting foreign expertise and capital to Canada’s venture capital market.”

The action plan was tipped as early as last March, and investor Sam Duboc is slated to play an advisory role to the $400 million fund.

Canada saw some VC action in the 1990s, but investments have trailed off since the dot-com crash. The ensuing decade has been relatively quiet.

$400 million is a hefty start, but it might not be big enough to jump start the industry. New Democratic Party Finance Critic Peggy Nash told Global News that the plan amounted to “just peanuts.” Canadian tech executive Adam Chowaniec told The Globe and Mail last year that the country would need an additional $1 billion a year in VC funding to keep up with the US.

With lots of Canadian startups, including Hootsuite, Kik and Clarity, coming onto the scene, let’s hope Harper’s $400 million gets the ball rolling.

Image credit: Rogerio Barbosa / AFP / Getty Images