A common frequently asked question (FAQ) when it comes to applying for government grants, loans, and/or tax credits is how many employees are needed to be eligible for funding? It is a common misconception that businesses must have a specific number of employees to be eligible for funding. While some programs have strict eligibility criteria, the truth is that most programs apply to a wide variety of Canadian small and medium-sized enterprise (SME) businesses, including those ranging from just one employee to hundreds.
The simple answer is no, a business does not need at least 100 employees to apply for funding. Most government funding programs support businesses with at least 15 employees, but there are other programs, such as for hiring and training grants, that support businesses with 1 to 50 employees. Canadian government grants and loans are tailored to support small businesses, and each program has its own eligibility criteria.
Not having enough employees or having too many should not hold a business back from finding out more about eligibility for funding programs. Too often funding goes unallocated because businesses have misconceptions about guidelines such as employee counts.
Our team at Mentor Works, a Ryan Company highlights key eligibility factors for trending programs. You can learn about programs qualifiers such as employees needed by signing up to receive our free weekly funding newslettercovering the latest news in government funding.
What Are SMEs and Why Are They Favoured for Funding?
A Canadian small and medium-sized enterprise (SME) is a business that typically employs fewer than 250 people, but sometimes up to 500, and generates an annual revenue below a certain threshold. SMEs are often described as the backbone of the economy since they account for a significant portion of employment and contribute to economic growth.
Although SMEs come in all shapes and sizes, ranging from sole proprietorships to small family businesses to start-ups and emerging enterprises, their size can limit resources resulting in unique challenges such as access to financing, market reach, and difficulties navigating complex regulations.
Due to these common challenges faced by SMEs, a large portion of government funding is allocated to support the essential part they play in the overall health and vitality of Canadian communities, as well as innovation and job creation.
Current Programs with Employee Count Eligibility Factors
Below are three federal programs for Canadian businesses active as of March 2023 which have eligibility surrounding employee count. These programs can give your business a sense of how funding programs can vary regarding how many employees a business should have to be eligible:
Canada Digital Adoption Program (CDAP)
The Canada Digital Adoption Program (CDAP) supports SMEs undertaking digital adoption in their businesses to remain competitive in this new digital age. There are two funding streams: the Grow Your Business Online stream and the Boost Your Business Technology stream.
- Grow Your Business Online: May receive up to a maximum of $2,400 in non-repayable grant contributions; and
- Boost Your Business Technology: May receive up to 90% of eligible project costs up to a maximum of $15,000 per SME in non-repayable grant contributions.
- Grow Your Business Online: Applicants must be a for-profit business, registered or incorporated that is accessible by consumers in –person, have a minimum of one employee, commit to maintaining the digital adoption strategy for a minimum of six months after program participation, will participate in follow-up surveys, sharing information with the Government of Canada, and having business published as a recipient of funding; and
- Boost Your Business Technology: Business has been incorporated federally or provincially, or is a sole proprietorship owned by a Canadian resident, be a privately owned for-profit business that maintains 1 – 499 full time equivalent (FTE) employees, and has a minimum of $500,000 in annual revenues in one of the previous three tax years.
Eligible Activities: To be eligible for funding, businesses must meet the following criteria:
- Grow Your Business Online: Adopt digital technologies that will enable the business to serve customers more effectively, as well as attract new customers in the digital marketplace; and take advantage of e-commerce opportunities; and
- Boost Your Business Technology: Hire the services of a digital advisor to complete a report that outlines financial costs of implementing said digital adoption processes, outline how new or existing employees may be trained to adopt and carry-out the digital adoption plan, develop a well thought out implementation roadmap that will touch on timelines, costs, resources, and more, and present recommended digital strategies that may help their business achieve their goals and increase competitiveness.
Timeline: Both streams are currently open.
The CanExport SMEs funding program provides Canadian government grants to support Canadian businesses seeking to develop new export opportunities and markets, particularly high-growth priority markets and sectors, by covering a portion of eligible sales and marketing activities.
Funding Amount: Eligible businesses can access up to 50% of costs to a maximum of $50,000 per application.
Eligible Applicants: Incorporated Canadian for-profit businesses that maintain at least 1 but less than 500 full-time payroll employees and have between $100,000-$100M in Canadian annual revenue.
Eligible Activities: Virtual trade events, website SEO, adaptation of marketing tools, IP/product certification, and market research.
Timeline: This program is currently open for projects starting on or after April 1st, 2023.
IRAP Youth Employment Program (YEP)
The IRAP Youth Employment Program (YEP) funds hiring young Canadian post-secondary graduates. Eligibile candidates can be graduates of most programs from business development to technical to customer service/administration.
Funding Amount: Eligible applicants can receive up to $30,000 per candidate for a period of 6 to 12 months to a maximum of two candidates.
Eligible Applicants: Incorporated and financially stable Canadian businesses with 1-500 employees; must find candidates before applying. Candidates must be between 15-30 years old.
Eligible Activities: This program focuses on providing recent post-secondary graduates access to technical opportunities and non-technical but technology related projects such as research and Development, market analysis for new technology-based products, business development related to science and technology activities, multi-media, improvement of customer services, and
Timeline: The program is currently open for intakes.
Government Funding Programs for Canadian Businesses
Canadian government funding programs support businesses from small businesses, large corporations, non-profits, and post-secondary research institutions with a wide range of numbers of employees.
The key to accessing these programs is understanding which programs are the best fit for your organization and upcoming projects by understanding eligibility factors including employee count, timelines, activities, costs, and project types.
Unsure about government funding support for your Canadian business? Learn more by reviewing this free downloadable Navigating the Government Funding Process slide deck which is a roadmap to the government funding application process.