Canada’s second-largest auto parts maker, Linamar, is receiving significant support from the Canadian federal and provincial governments. The Guelph-based manufacturer has committed to a $506.8 million research and development project that will lead to significant job creation and innovation within Ontario. The resulting economic impact has spurred multiple government investments to assure a successful project via business grant and loan support.
Federal and Provincial Repayable Funding Contributions for Auto Transmission R&D
Transport Minister Lisa Raitt and Premier Kathleen Wynne have announced that the federal government will provide $50.7 million as a repayable loan through the Automotive Innovation Fund and the Ontario provincial government will contribute $50.25 million in business grant funding under the new 10-year Jobs and Prosperity Fund for a total of approximately $101 million in government funding.
Linamar currently employs over 18,000 employees globally and generated $3.6 billion in revenue in 2014. They will leverage past successes and devotion to research and development by carrying out an extensive R&D and business expansion project to develop advanced, lightweight transmissions for automobiles. The project aims to retain the 6,800 jobs within Ontario, as well as create 1,200 new employment opportunities. This commitment to the Ontario automotive industry aims to combat Mexico’s growth in the sector from their lower wages and free trade agreements. According to CanadaBusiness.com, Mexico is now home to the fastest growing automotive manufacturing sector and is anticipated to experience a 21% US sales improvement from 2013 to 2015, while Canada will experience a -2% sales change.
Medium & Small Business Funding Grants & Loans for Business Expansion
In addition to the AIF and Jobs and Prosperity Fund that Linamar has been awarded, several other funding programs exist for businesses within Ontario, including programs specifically for small and medium-sized enterprises, including:
- FedDev Investing in Business Growth & Productivity (IBGP): This 0% interest loan is specific to Southern Ontario businesses with 15-1000 employees. Covers 25% of expenses up to $20M towards projects aimed at business expansion, diversification, innovation adoption, and growth (job creation/revenue).
- FedDev Investing in Business Innovation (IBI): Similar to IBGP, this 0% interest loan is specific to Southern Ontario businesses, however it is focused on supporting startups who have private investments, matching venture capital/angel contributions up to $1M. Projects should focus on businesses developing and commercializing innovative new technologies.
- Advanced Manufacturing Fund (AMF): $10M-20M available to for-profit Ontario manufacturing businesses as a repayable funding contribution (not-for-profits may receive non-repayable contributions). Projects must focus on large-scale, transformative advanced manufacturing activities that enhance productivity, foster new technological innovations, and create spillover benefits for manufacturing clusters and/or global supply chains.
- Southwestern Ontario Development Fund (SWODF): Specific to Southwestern Ontario businesses, this program covers up to 15% to a maximum of $1.5M in grant funding. Projects greater than $10M in size can receive a repayable government loan up to $5M. Project must have a focus on job creation in the region. An Eastern Ontario Development Fund (EODF) variant also exists.
Explore Business Funding Grants & Loans for your Business Expansion Project
Are you interested in exploring funding opportunities for your business’ strategic initiatives? On February 16, 2015 from 11:30am-12:30pm Mentor Works will be hosting a free informational funding webinar. This webinar will tackle the common questions and obstacles to funding, providing attendees with insight into their business grant and loan options, how to apply, and what the ideal programs are based on their needs. Funding exists for business expansion, R&D, hiring, training, capital investment, software adoption, and marketing. Register for Feb. 16 Funding Webinar or explore other Funding Workshops & Webinars based on your needs.