A key measure of support for early stage technology firms in Canada plummeted in 2009, according to a report released Wednesday by the Venture Capital and Private Equity Association.

The amount of investment in the Canadian venture capital market fell by 27 per cent to a total value of $1 billion across the country, its lowest level since the mid-1990s.

The association says the one bright spot in 2009 was Quebec, where investment in startups actually grew by 10 per cent to $431 million. (CBC)

Last year, investors put $1.4 billion into technology startups.

The report also shows the number of firms receiving venture financing in Canada in 2009 fell 15 per cent from 2008, to 331. The average amount invested was $3.1 million last year, compared with $3.5 million in 2008 and $5.1 million in 2007.

That was less than 40 per cent of what their U.S. counterparts were able to raise on average, the widest competitive gap since 2005.

Investment actually grew by 10 per cent to $431 million in Quebec, moving it ahead of Ontario in 2009, and into ninth place in North America.

The association said Quebec benefited from efforts by the provincial government and institutional investors, such as pension funds, to support small, growth-oriented companies.

Ontario startups raised only $288 million in 2009, a 50 per cent drop from the year earlier, accounting for 28 per cent of venture capital invested countrywide, compared with 43 per cent in Quebec, and its lowest market share since the early 1990s.

British Columbia fell 46 per cent from 2008, with $141 million invested last year.

The association repeated its call for Ottawa to increase tax incentives for investors in technology startups.

The association represents the firms and organizations that manage investment in early stage companies and handles buyouts of those firms. Its members manage $75 billion in venture capital.