As a Canadian, I'm doubtful that this is the case. There is a reason why almost all Canadian startups seek funding South of the border. In Canada, it is easier to get government grants than it is to secure venture capital.

I feel like YC, with it's long record would have an easier time attracting capital than an individual startup.

Canadian YC alums alone would be more than sufficient to provide the capital for this, if necessary.

I don't think that it has anything to do with there not being enough capital available in Canada but rather the risk tolerance of most Canadian investors.

I wouldn't be surprised if those YC alumni were hesitant to make more bets on the startup roulette wheel. I'm not saying that venture capital/angel investing is gambling per se but most Canadians, even past startup founders, probably see it that way.

Canadian founder who relocated my startup to US for funding reasons here. It is very hard to secure seed level funding. The mindset is very un-SV unfortunately. But that could change rapidly if we see a few pillar companies emerge, but that's a big if.