Business development is an exciting time for the innovation and advancement of any small but ambitious company. But, SMEs may be subject to a collapse of cash resources during this time, as money is hemorrhaged on research, development and operational costs. For some Canadian startups and scaleups, this experience is all too familiar.
Finding support for your small or medium sized business can be a struggle, and it may not feel like you have many options. Luckily, this cycle is breakable as there are innumerable grants and funding programs by the Government of Canada!
Introduction to Grants and Funding
Did you know that over half of the working population in Canada are employed by an SME?
Plus, businesses are being founded all the time in the country, with around 11 new companies formed every single hour. However, after 10 years, an average of only 45% of these businesses are still standing.
To tackle this, the Canadian government offers close to $101 billion over three years in proposed investments as part of Canada’s growth plan.
These support options exist mainly to promote innovation, reward good business practices and, of course, help the Canadian government and economy. Grants and funding in Canada are in abundance, you simply need to know how to access the funds.
Federal Research and Development Grants
In regards to start up funding, Canada has two types of grants that we are focusing on are federal and provincial grant programs. It’s important to note that the application process for these can often be quite complex, and it’s often recommended that you hire a specialist grant writer or company.
We have gathered a list of some of the most popular grant programs funded by the Government of Canada to get you started, and a look at who might be eligible to apply for these Canadian government grants.
Scientific Research and Experimental Development Tax Credit Program (SR&ED)
One of the most popular options for start up and SME funding Canada provides is the Scientific Research and Experimental Development Tax Credit Program. The SR&ED is an incentive program run by the Canadian Revenue Agency. Through this, companies that spend a portion of their expenses on research, innovation and development projects can get a tax refund of up to 35% of their research and development expenditure. When provincial programs and overheads are included, cash refunds for Canadian Controlled Private Corporation’s can be more than 55% of expenditure.
This refund can only be claimed after the completion of the fiscal year in which it was incurred.
Strategic Innovation Fund (SIF)
Another start up funding optionCanada has to offer is the Strategic Innovation Fund (SIF). The SIF has five streams of matched funding business grants. The fund was initially set up to provide financial assistance while promoting innovation within the country. The government of Canada offers up to $10 million per company towards the creation of new intellectual property or significant technology development.
The SIF’s eligibility criteria requests large-scale organizations of for-profit, non-profit or network nature who are looking towards expansion. Since this funding project is vast, some opportunities are non-repayable, such as activities with clear global or strategic advantages and public benefits. However, others are loans requiring repayments on a risk-sharing basis.
CanExport Program
One of the most popular Canadian government grants is the CanExport grant program. The CanExport provides funding of between $75k and half-a-million in preparation to small and medium sized businesses for an international product-to-market strategy. This Canadian government grant supports a company or entrepreneur to:
- meet with global partners or investors
- apply for international IP
- cover licensing and legal expenses
- research and develop a single technology and more
Similar to the SIF, there is more than one stream in this program depending on the products, services and demographics of a company. Eligibility depends on company size and revenue, with Canadian for-profit organizations with over $100k profit welcome to apply.
Canada Job Grant (CJG)
The CJG was launched in 2014 in order to support employee training and development for Canadian businesses. Eligible companies can receive a grant to cover the costs of hiring and training expenses through third-party providers. This type of grant is beneficial at all levels of the company, since staff are up-skilled and feel valued, while employers take advantage of the new expertise.
Although this is a federal grant, each provincial government controls the funding and so business owners must apply through their province, for instance through the Ontario Job Grant or Manitoba Job Grant). The level of support varies from province to province, but you could receive up to $10,000 per employee.
CME Technology Assessment Program (TAP)
Another type of startup funding Canada provides is the CME Technology Assessment Program (TAP). The CME TAP is a federal investment program for building new assets and technologies. It exists in order to keep the manufacturing industry competitive, and particularly supports projects related to lowering waste or increasing productivity. This program allows small businesses to receive a maximum of $25,000 to cover 100% of the technology driven costs.
The program allows organizations to research the new tech that will better suit their needs and improve their manufacturing processes. The loan benefits include increased production, quality, innovation and lower expenses.
Innovative Solutions Canada
The ISC is a research and testing-based fund for startups and established businesses. This support option is well-suited to companies who want to test their business plan and solutions against real world problems quickly. For example, the program has previously funded:
- a transparent medical grade mask
- modernized handcuffs
- filtration of microplastics
- reduction of underwater noise to protect whales in the Canadian coastal area
Those selected are awarded up to $150,000 to develop a proof-of-concept model, and may later qualify for up to $1 million in order to take the product to market.
Industrial Research Assistance Program (IRAP)
The IRAP offers non-repayable financial assistance to employers and their employees. The program exists to target Canadian companies and SMEs with innovative and tech solutions to make an impact. It aims to be the go-to place for Canadian small and medium sized businesses to reach commercial success.
The other part of this program is the chance for employers to offset the costs of recruiting graduate talent. The program provides mentorship and advisory services alongside their funding in order to support their successful applicants in a holistic way.
Provincial Canadian Government Grants
Along with the federal Canadian government funding projects, each Canadian province has their own budget to support businesses, entrepreneurs and even trade shows in the local area. Support for startups varies between provinces, but these are some of the most popular programs available.
Alberta: Alberta Innovates R&D Associates Program
This program is very specific in its support package. The Alberta Innovates program allows businesses to employ a full-time R&D specialist with funding of between $52,500 and $67,500 per year. By offering access to a full-time professional, entrepreneurs can accelerate their growth through continued innovation and testing.
British Columbia: Coast Funds
The BC coasts funds supports First Nations by investing in rural and sustainable development. The project aims to the economy through land and coastal stewardship and management plans. The fund is currently worth $116 million and has a specific focus on maintaining or improving the Great Bear Rainforest.
Manitoba: First Peoples Economic Growth
With over $25 million available, the Manitoba FPEG offers business planning activities and economic expansion to local businesses. This is a non-repayable business growth support package for the Manitoba First Nation business proposals. The specific focus of this project lies within accessing natural resources, improving rural and urban economic development and transportation infrastructure.
New Brunswick: Enabling Agricultural Research and Innovation
The EARI program aims to improve the growth, sustainability and self-sufficiency of New Brunswick’s agri-projects. It seeks to address gaps in scientific knowledge, as well as develop new technologies through trials and research to enable enhanced profitability, too.
The New Brunswick based program supports business enterprises over a 1-5 year period and offers up to $65,000 without the need to find matched donors. Eligible companies in New Brunswick are allowed to spend the money on salary-related costs, alongside the cost of machinery and products that will aid the agricultural industry in the province.
Nova Scotia: Innovation Rebate Program
The NSIR program is a refund grant, available to companies with under 499 employees at a rate of 25% of the cost of eligible expenses. This grant is well-suited to medium and larger businesses, as qualifying projects must have a business plan that demonstrate that they have budgeted at least $2,000,000 for investment in Nova Scotia.
This support package is offered towards companies with a focus on production or waste processing; with the overall goal being that Nova Scotia is able to compete on the global stage. If your business has a smaller level of expenditure, fear not – the provincial government is launching a new program soon that could be better-suited.
Ontario: SmartStart Seed Fund
As an Ontario based startup, you have plenty of options when it comes to provincial funding opportunities. However, the SmartStart Seed Fund (SSSF) is offered to students or graduates under 30 years of age.
The fund is set on higher education campuses and focuses on technology innovation, with eligible applicants awarded up to $35,000 in a matched funding model. The second wave of benefits to this program is access to an entire network of mentors and entrepreneurial support, which can be just as valuable for newbie enterprises.
Prince Edward Island: Product and Market Development Program
The PMDP is a product-to-market funding opportunity for businesses associated with agricultural processing and production. Successful applicants will receive up to a total of $40,000 in a 50% matched funding opportunity to cover expenses that were outlined in their business plan and proposal.
Qualified recipients are encouraged to attend local trade shows, outsource professional services and develop their brand holistically alongside working to design and fulfill the very first products.
Québec: SME in Action
SMEs within eligible industries in Québec (ie, manufacturing, environmental and IT corporations) can apply for the SME Action grant and take advantage of 40% matched funding of up to $100,000. This is an R&D investment opportunity focused on the testing phase of business development.
Especially for entrepreneurs in the manufacturing and engine service sectors, this funding source seeks to improve the supply chain and implement a CRM system for successful applicants.
Saskatchewan: Product2Market
The P2M is a value-add funding opportunity with two streams:
- prototype and product development
- market development strategy
The Saskatchewan based program aims to increase competition in the manufacturing industry by creating easier pathways to national and international business expansion. Up to $100k is awarded as part of a 50% matched funding grant.
Northwest Territories: Business Development Project Fund
The BDPF is a small and medium-sized business fund with lending and grant opportunities. Eligible companies may be able to access credit through working capital guarantees or letters of credit, alongside core funding or investment in shares.
Since 2005, the fund has been accessed by nearly 500 businesses in the Northwest Territories. Since it is partnered with national organization, Canada Business, recipients can also take advantage of a mentorship package.
Nunavut: Small Business Support Program
In Nunavut, the SBSP is a relief fund provided to businesses affected by the impacts of Covid-19. Applications are limited to small businesses only, with organizations from all sectors encouraged to apply if needed.
The fund exists to subsidize the cost of wasted product due to decreased demand or access. This might include items such as machinery, utilities and office costs for admin-based workers and certain licensing fees.
Yukon: Economic Development Fund
Yukon-based businesses who are looking to innovate and grow may be eligible for the EDF. The province offers financial support to projects with demonstrated long-term benefits for the regional community.
Expenses such as marketing, professional development activities and capital costs are all covered under the fund, which offers 75% matched funding of up to half a million dollars.
Other support: Grant Libraries
Is your Canadian business looking to access funding through one of the Federal government or provincial sources? Check out one of Canada’s online grant libraries in order to scan the entire list of government and private funding opportunities.
There are several other grant programs available for startups and sceleups across the country. It’s about learning more about them and finding the one that best suits your growth needs.
However, even after early stage companies are able to identify grants well-suited to them, they often face some challenges when leveraging these programs. This includes difficulty in matching contributions, proving alternative funding sources, and funding the delivery of milestones consistently.
If you’re looking to solve these challenges, Fundsquire’s Grant Advance is a simple funding solution that lets you use your future grant payments to fuel your current milestones today. You can learn more here.
Hope this guide has been helpful in providing a rundown of the most popular government grant programs in Canada. If this information was of value to you, feel free to share it others who might benefit from this.
