Rural Economic Development Funding for Municipal Governments and Non-Profits

The Rural Economic Development (RED) program is an Ontario government grant that provides funding for municipal governments and non-profit organizations who are completing projects which improve business conditions and enable greater competitiveness in rural regions.

The Rural Economic Development program offers up to 50% of costs to a maximum $250k for projects which improve the capacity of rural regions to attract business investment.

To qualify for RED funding, municipalities and non-profit organizations must meet the program’s core objectives/eligibility criteria. Currently, for-profit businesses are ineligible for funding. This program is specifically targeted towards rural municipal governments, non-profits, and Indigenous communities may apply for RED grants.

Rural Economic Development Program: Funding Details

The Rural Economic Development (RED) program is an Ontario government grant which is available to municipal governments and non-profits for stimulating economic growth in the province’s rural and Indigenous communities. More specifically, it offers government funding for activities which grow local economies and remove barriers to economic development.

RED funding offsets up to 50% of project costs, to a maximum $250,000, in support of projects which attract investment, create jobs, and support entrepreneurship.

There are two streams of funding for this government funding program: Economic Diversification and Competitiveness and Strategic Economic Infrastructure. This funding enables more communities to remove economic barriers and become more competitive when attracting private-sector investments.

For a high-level review of the Rural Economic Development program, please read Mentor Works’ RED Overview blog.

RED Funding for Economic Development: Applicant Eligibility

To qualify for the Rural Economic Development (RED) program, applicants must ensure they:

  • Are either a non-profit entity, municipality, local services board, or an Indigenous community;
  • Have authority to enter into a legal agreement; and
  • Comply with legal requirements throughout the project.

Please Note: Municipalities targeted through RED-funded projects must be part of ‘rural Ontario’ and maintain a population of 100,000 or less.

Applicants Ineligible to Receive RED Funding

Although RED funding was once available to business applicants, the program was restructured to focus on the communities and organizations directly supporting economic development. Because of this change, all for-profit businesses and organizations are deemed ineligible from receiving RED grants.

RED Grants for Rural Communities: Project Eligibility

There are two streams of Ontario government funding support provided through the Rural Economic Development (RED) program, including:

Economic Diversification and Competitiveness Stream

Projects funded through this stream are meant remove barriers to businesses, develop job growth, attract investment, attract or retain a skilled workforce, or strengthen section and regional partnerships and diversify regional economies in Rural Ontario. Project examples include:

  • Entrepreneurship/business succession;
  • Business retention and expansion;
  • Downtown revitalization;
  • Technology adoption/innovation initiatives;
  • Service delivery improvement;
  • Attraction and retention of workers/immigrants/youth; and
  • Skills training and development.

Strategic Economic Infrastructure Stream

Economic infrastructure projects are to advance economic development and investment opportunities in Rural Ontario. Project examples include:

  • Rehabilitation of cultural, heritage, or tourism attraction;
  • Redevelopment of vacant and/or underutilized buildings; and
  • Streetscaping and landscaping.

Projects Ineligible for RED Funding

Even if applicants are eligible for funding, their projects must also comply with the program’s funding focus. Therefore, projects ineligible for funding include (but are not limited to):

  • Academic research;
  • Infrastructure and capital projects;
  • Retail and commercial developments;
  • Projects where expected benefits are focused on a particular business; and
  • Projects which lobby any level of government.

Eligibility of Expenses for Ontario RED Funding

Several project expenses can be incorporated in Rural Economic Development funding applications. These expenses include:

  • Project management;
  • Minor capital costs (such as subcontractor fees, equipment, renovations, and retrofits);
  • Training;
  • Marketing and promotion;
  • Travel within Canada and the continental United States for project-related events;
  • Administrative costs; and
  • Wages for new employees hired with the sole purpose of completing the identified project.

Expenses Ineligible from RED Economic Development Grants

Rural development grants provided through RED will not cover certain expense categories, including (but not limited to):

  • Any costs not specifically-related to the project;
  • Costs incurred prior to the project’s start date or after the project’s completion date;
  • Application development costs;
  • Major capital costs; and
  • Costs of academic research.

How to Apply for Rural Economic Development (RED) Funding

Potential applicants must submit a comprehensive application package which discusses the project prior to the program’s application deadline. Applications must note specifically how the project will lead to improved business conditions within the rural or Indigenous municipality and be accompanied by 3 years of financial reports, among other key due diligence materials.

The program has a deadline of February 24, 2020. To learn more about RED funding, including if your municipality or non-profit organization is eligible to participate, please contact Mentor Works.

 Apply for Canadian Government Funding

Posted: May 12, 2014. Updated: January 20, 2020.

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Mentor Works provides business support services related to Canadian government funding for business. By assessing our clients’ strategic objectives and innovation challenges, we are able to match optimal government grants for small businesses in Ontario, Canada, as well as loans and tax credits.

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