Rural Economic Development Grants for Municipalities

To drive a strong and diverse economy, rural Ontario municipalities must create the conditions necessary for businesses to thrive. This is no easy task to accomplish; not only do municipal governments need to conduct research and develop economic strategies, but they must also attract businesses and be actively involved in workforce attraction, retention, and development activities.

Fortunately, these are areas where economic development grants such as Ontario’s Rural Economic Development (RED) program play a key role. For many years, the RED program has provided rural municipalities and non-profits with Ontario government funding to offset the costs of economic development projects. The program’s funding has been critical to many rural municipalities in attracting investments from prestigious domestic and international businesses.

Through the Rural Economic Development program, municipalities and non-profits operating in rural Ontario may access up to 30-50% of eligible project costs, to a maximum of $150,000-$250,000.

To get started with the RED program, municipalities and non-profits must prepare a comprehensive application package that includes the main application, letters of support, and other corresponding documentation. The program accepts application packages during defined intake dates; applicants are notified about their application’s status approximately four months after the intake round closes.

Rural Economic Development (RED) Grants: Funding Program Details

Rural Economic Development (RED) is an Ontario government grant that supports municipal governments and organizations leading projects to stimulate economic growth within their region. It offers cost-sharing assistance to help rural economic developers recover a portion of incurred project expenses.

Through the Rural Economic Development program, applicants may receive up to 50% of eligible project costs to a maximum $250,000 in Ontario government grants.

Administered by the Ontario Ministry of Agriculture, Food, and Rural Affairs (OMAFRA), RED funding will offer support to a wide range of planning and implementation-related projects that:

  • Identify priorities and measure economic performance;
  • Attract, retain, and expand local businesses;
  • Create and sustain high-value jobs; and
  • Develop a highly-skilled, knowledge-based workforce.

Program Focus: Economic Development in Rural Ontario

The central focus of RED funding is to enhance economic conditions in rural Ontario. It maintains this focus by supporting projects that:

  • Take place in rural Ontario; or
  • Generate benefits for rural Ontario.

Rural Ontario is classified through the program as meeting at least one of the following criteria:

  1. Having a population of less than 100,000 people; and
  2. Having a population density of 100 people/square kilometre or less.

To determine whether your region is classified as rural or urban, please refer to the Government of Ontario’s Rural and Urban Areas map.

Rural Economic Development Program: Project Eligibility

The Rural Economic Development (RED) program provides funding for municipalities and non-profits for the planning and implementation of economic development projects. These include:

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
  • 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
  • Streetscaping and landscaping

Rural Economic Development Eligible Expenses

Examples of eligible expenses funded under RED include:

  • Training
  • Travel
  • Studies
  • Marketing/promotion costs
  • Project management (consulting fees)
  • Wages for new hires to work 100% on the project
  • Minor capital (subcontractor fees, equipment, design/engineering work, leaseholds)

Applicants Eligible to Receive RED Funding

To be considered for the Rural Economic Development (RED) program, all applicants must be:

  • A non-profit organization, rural municipality, local services board, or Indigenous community;
  • Authorized to enter into a legal agreement; and
  • In compliance with legal requirements throughout the project.

How to Apply for RED Economic Development Grants

To apply for the Rural Economic Development program, eligible participants must develop a comprehensive application package and submit it during one of the program’s scheduled intake periods. Application packages typically consist of an application, letters of support, and other documentation that identifies why the project is a good fit.

The program has a new deadline of February 24, 2020. 

Municipalities and non-profits are usually notified about the outcome of their application within four months of the intake closing. Once these organizations receive an approval from the program, funding-eligible expenses can be incurred.

To explore your eligibility for RED funding and learn how to optimize the funding application process, please contact Mentor Works Ltd.

Apply for Canadian Government Funding

Posted: October 30, 2015. Updated: January 20, 2020.

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Jeff holds an Honours Bachelor of Business Administration at the University of Guelph. He is passionate about Canadian business, economics, and politics. As Marketing Coordinator for Mentor Works, Jeff educates business leaders about proactive funding strategies.

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