Business Strategy

How to Stack Government Funding Programs to Optimize Projects

Canadian businesses that utilize government funding programs to meet their strategic goals often approach the process by matching an upcoming project to one particular funding program. While this is certainly a step in the right direction for many businesses, it’s also a missed opportunity to leverage further potential funding opportunities for their project(s).

Stacking government funding refers to the approach of utilizing multiple federal and provincial programs to offset a greater portion of eligible project expenses.

For a proactive stacking approach to be beneficial, companies must assess the limits and rules that may change from one funding source to the next. It’s important to understand the parameters of the programs your business may be interested in. Most funding programs clearly indicate in their guidelines if and how stacking can be applied; eligible applicants should carefully review these rules and each program’s unique application process to navigate the process efficiently.

Proactive Business Strategy: Stacking Government Grants and Loans

As it relates to Canadian government funding programs, stacking involves accessing more than one grant and/or loan to cover a single project. Some basic rules govern this strategy to ensure the government is spreading its financial support to as many businesses and projects as possible, but as a general practice, stacking is absolutely permitted.

A proactive stacking approach to utilize multiple funding programs takes strong project management and funding expertise, but the benefits are well worth the work.

A perfect example of how government funding programs can be stacked to increase project success can be found in Mentor Works’ client success stories. Through a combination of various government funding programs, often applied for concurrently, Mentor Works has helped automotive manufacturer Girotti Machine access over $450,000 in grants and loans for economic growth and innovation projects.

Canadian Government Funding:  Stacking Rules to Remember

Although stacking is permitted for most government grant and loan programs, there are a couple of general rules that companies must follow. Deviating from these rules can result in the rejection of one or more funding applications, so it’s critical to observe and abide by these guidelines:

  1. Generally, stacking only allows for one federal and one provincial program to be used for the same project activities. Stacking two federal or two provincial funding programs is not typically allowable unless projects are divided into well-organized sub-projects or “phases” that focus on separate activities and expenses.
  2. Programs often stipulate a maximum allowable government funding contribution (typically 75% of total project costs). Companies should plan for how they expect to receive that upper limit since the combined contributions of two programs can easily exceed this maximum. Some programs prioritize the approval of applications requesting less than the maximum contribution, so structuring these grants and loans into your stacking strategy is advised.

Examples of Stacking Government Funding Programs

To stack government funding programs for your upcoming project, consider combining some of the federal programs mentioned in this section with grants and loans offered through your provincial government.

Hiring and Training New and Existing Employees

When performing workforce development initiatives, consider leveraging both hiring and training grants. There are multiple programs available to support the hiring of students and recent post-secondary graduates. Since new hires may lack some of the skills sought by your company, consider stacking hiring funds with a training program such as the Canada Job Grant.

Research and Development Projects

Research and development projects that lead to new products or services have many opportunities to access Canadian government funding. We recommend using a phased approach to government funding programs that seeks support for basic research, development and prototyping, and commercialization activities. One proactive program well-suited for stacking is the Industrial Research Assistance Program (IRAP).

Capital and Technology Investment Solutions

Productivity and growth-oriented projects often include several significant capital expenses, including infrastructure and equipment costs, that can be offset through Canadian government funding programs. The phased approach also works well for these types of projects. Establishing several smaller “stages” of the project and applying to a funding program for each stage can help to optimize the value of funding received. Some common business funding programs to support this area include the Strategic Innovation Fund (SIF) and the Southwestern Ontario Development Fund (SWODF).

Business Expansion Activities for Global Market Exporting

Developing new export markets can take considerable time and resources. Fortunately, government funding can directly and indirectly support the costs of international expansion projects. These may include participating in international trade shows and developing research partnerships with foreign entities. One program that supports these types of projects is CanExport.

To learn more about government funding programs and application strategies, please download the free Canadian Business Funding Guide.

Canadian Small Business Grants and Loans

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