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Canada's Prime Minister Justin Trudeau speaks during the unveiling of Google's new Canadian engineering headquarters in Kitchener-Waterloo, Ontario January 14, 2016.PETER POWER/Reuters

Canada's technology sector has not had a friend in power like Jim Flaherty since the late finance minister left government two years ago. The Liberal government of Justin Trudeau talks about boosting innovation but, so far, the Prime Minister has shared scant details of his agenda.

It's one thing to do photo ops at Google's Waterloo, Ont., office and declare at the World Economic Forum in Davos that Canadians are resourceful. Delivering an actual innovation strategy involves more than spewing buzzwords and broad statements.

The new government can learn much from the legacy of the late Conservative finance minister if it's looking for concrete ideas to foster innovation.

To be sure, the previous government left much to be desired in terms of supporting economic diversification and innovation. But two specific actions on Mr. Flaherty's watch helped turn on the venture-capital spigots in Canada. One can draw a direct line from those moves to the fact Canada's VC industry had its busiest year in 2015 in at least a decade.

The first was a tweak to the tax code in 2010 that made it much easier for U.S. VCs to invest in Canadian startups. Big U.S. and international funds flooded into Canada, giving a needed boost to Canada's burgeoning class of startups and providing them with the same access to sophisticated advisers and networks as their Silicon Valley peers.

In 2012, Mr. Flaherty turned his focus to Canada's domestic VC industry. It was small, underfunded – other than by governments – had suffered from years of middling returns and was dismissed by globally minded tech entrepreneurs as irrelevant and unambitious.

Mr. Flaherty wanted to change that. He saw a role for Ottawa to be a catalyst, not by trying to pick winners and giving handouts, as government so often does. It would instead invest in venture capital in a way that spurred private capital to follow suit.

The plan was to inject $400-million into the VC business, largely by seeding four new "fund of funds" led by experienced private-sector fund managers who would then make market-based investment decisions. The government money came with a catch. For every dollar government put up, the fund managers had to raise two dollars from private sources such as banks, insurers, pension funds, companies, foundations and individuals.

As an incentive, Ottawa agreed to be the first in and the last out of the funds, reducing risk and holding periods for other investors. "This isn't a subsidy or a grant," said Neal Hill, who oversees the VC action-plan program at the Business Development Bank of Canada. "The government certainly expects to get back its money, or more."

The government in 2014 picked four veteran firms – Teralys Capital, Kensington Capital, Northleaf Capital Partners and HarbourVest Partners – to receive $350-million of the cash for four new tech-focused VC funds. (Ontario and Quebec put up tens of millions more). As of this week, three have closed their funds, raising a combined $981-million, while HarbourVest should close its $375-million fund this month. That's a total of $1.36-billion, with $900-million coming from outside government.

The funds of funds have, in turn, committed about half their proceeds to 20 funds, including Golden Venture Partners, Version One Ventures, Information Venture Partners, McRock Capital, Georgian Partners, Vanedge Capital Partners and Real Ventures. These newer funds are typically led by experienced, successful entrepreneurs and operators – a key ingredient of successful Silicon Valley VCs – and not just financial executives, which used to be the norm in Canada. These funds, in turn, have backed some of Canada's most exciting startups.

The government doesn't deserve all the credit for a healthier Canadian VC ecosystem: Pension giant OMERS has committed hundreds of millions of dollars to venture investments and attracted outside corporate investors to its latest VC fund. Several wealthy mining and real estate entrepreneurs – notably Seymour Schulich – have committed tens of millions of dollars to the tech VC.

How could Mr. Trudeau make his mark in innovation? One easy way would be to continue the Conservatives' VC funding program. It provided a meaningful boost to the business, but industry players say it will take two or three rounds to build a formidable, self-sustaining domestic industry (for example, there's still a shortage of later-stage VCs to finance startups once they generate significant revenue).

If Ottawa orphans the program, "at some point relatively soon it ends, and when it ends venture funding drops off a cliff," warned Mike Woollatt, chief executive of the Canadian Venture Capital and Private Equity Association.

For a modest sum – which should be returned to the treasury if enough Canadian startups emerge as global heavyweights – the feds can legitimately claim success for supporting a flourishing tech ecosystem. Then, the Prime Minister will really have something to brag about at Davos.