In an effort to stimulate economic growth in developing countries, Foreign Affairs and International Trade Canada have created the Investment Cooperation Program (INC) as part of Canada’s Official Development Assistance spending initiative. Depending on the activity, eligible firms can receive 50%-75% of cost-sharing up to $955,000 in Canadian government grants to support to Canadian firms to perform Foreign Direct Investment (FDI) activities in qualifying developing countries.

Firm Eligibility Factors for Canadian Business Grants

Canadian firms must prove they have the potential to adequately create sustainable employment and economic growth in developing countries that lead to poverty reduction. Therefore, to qualify firms must exhibit the following qualities:

  • Canadian registered, for-profit, private-sector firms
  • Have at least 3 years of financial statements
  • Financially sound with revenues greater than $2 million in each of the previous two years
  • Demonstrate a positive earnings/profit performance
  • Have capacity to implement proposed investment (or seeking support related to existing investment)
  • Be registered on the Virtual Trade Commissioner and be eligible as clients of the Trade Commissioner Service
    • Clients of the Trade Commissioner Service must have:
      • Demonstrated capacity for commitment to commercialization
      • Meaningful economic ties to Canada
      • The potential to contribute significantly to Canada’s economic growth

Business Funding Grants Project Eligibility

Firms are expected to have performed preliminary project research and be considering an eligible host country. To encourage and promote responsible Canadian private sector investments in developing countries Foreign Affairs and International Trade Canada have identified 4 eligible project types:

Productive (most manufacturing and service industries)

  • Most manufacturing and service industries are eligible
  • Eligible activities: field testing of products, testing or adaptation of a proven technology, demonstration of proven technologies or methodologies to potential partners, investors, or customers
  • Ineligible activities: Pure R&D, testing unproven technologies, medical research and trial

Extractive

  • Support to oil, gas, and mining industry for improving economic, social, and environmental sustainability of a project
  • INC receptive to activities that are recognized by internationally recognized Corporate Social Responsibility (CSR) standards

Professional services

  • Professional service contracts must be with a recognized public sector entity in host country or an internationally recognized international development institute
  • Funding must be for complementary training to what is included in service contract
  • Service contract should exceed $1million

Public/Private infrastructure projects

  • Involves the administration/delivery of a public service or public infrastructure project
  • Requires a long-term contract to deliver the service/good that has traditionally been provided by public sector (including health and education when project is limited to infrastructure and/or facilities management – delivery of education not eligible)
  • The project must be concerning a public need
  • The Canadian participant should represent at least 10% ownership in infrastructure
  • If a lease is involved, the term of lease should be 15 years or longer

How this Grant Funding for Business Works

The INC program offered phased support to firms with their eligible internationalization strategies. Phase 1 and Phase 2 are considered pre-investment decision phases, while Phase 3 and Phase 4 are post-investment. Firms may apply at any phase and are eligible to apply at multiple phases of their internationalization strategy. To determine what activities are supported for these business funding grants, each of the above mentioned project types, along with their association maximum contribution amounts, refer to page 5 of the Applicant’s guide.

Interested applicants will be assigned an INC officer according to the desired country for FDI and will release the application if it is believed that all the proposed project specifications have been met. After your completed application has been received there will be a peer review process in evaluating your application with a turnaround of approximately 40 days.

If approved, the government funding for business will be distributed to firms according to agreed project milestones and report submissions.

Additional Canadian Business Grants Support

Firms interested in learning more about Investment Cooperation Program, or other Canadian Government funding opportunities should contact one of our Canadian Government Funding Planners. Additionally, you could sign up Free 60 Minute Canadian Government Funding Workshops. Businesses can also receive the latest Canadian Government funding updates and details by following us on Twitter and signing up for our Weekly Canadian Government Funding E-Newsletter.

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Written by

Kyle holds an Honours B.Comm and a BA in Economics from McMaster University. He is a Government Funding Specialist for Mentor Works Ltd. and has interests in corporate strategy, growth-based organizations (particularly market penetration), and the economics of management.

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