Canadian government funding programs are positioned to offset business improvement project expenses. When used strategically, these funding programs can be leveraged for most growth and investment-oriented projects. Businesses who are the most successful with funding can build a thorough funding plan consisting of programs that covers all facets of their strategic plan to optimize their funding potential while minimizing their financial commitment.
Both federally and provincially, Canadian governments allocate money to provide small businesses with government grants, repayable funding, vouchers, and tax incentives.
These funding types are often used by businesses to extend their cash flow and execute projects at a scale and speed that they would not be able to accomplish independently.
Funding-eligible project themes typically include:
Hiring & Training
Finding and retaining top talent is critical to any business’ success. Small businesses are especially dependent on the unique skills and capabilities of its employees to grow and prosper, however, hiring and training can be costly. Fortunately, funding is available for:
- Advanced technology and software training;
- Hiring recent post-secondary graduates;
- Third-party training from certified training vendors;
- Business and educational institution collaborations; and
- In-house training to improve productivity and cross-training.
Government funding for hiring and training initiatives typically will offer business grants for up to 50-83% of expenses.
Government funding for hiring and training requires the applicant to be incorporated within Canada and in the case of provincial funding, they must be incorporated and operating within the relevant province. Most programs do not specify minimum or maximum revenue figures, although some training grants, such as a manufacturing-specific program, requires applicants to be SMEs and maintain a certain revenue threshold.
Research & Development
Innovative research projects are critical to the competitiveness of Canadian businesses. As many sectors experience new technology-based industrial revolutions, companies must invest in improved products and processes to gain an advantage. Fortunately, Canada’s federal and provincial governments are responding with funding programs to promote research and development. Funding is available for:
- Product testing and certification;
- Product/process prototyping;
- Industry academic collaborative R&D;
- Software development/improvements; and
- Late-stage tech development and early-stage commercialization.
R&D programs generally provide grants and repayable funding for up to 50-80% of eligible expenses.
Some research funding programs are tailored towards start-ups and early-stage businesses, while the majority are targeted towards established companies that are incorporated for a minimum two years. Current revenue is a factor for most research and development funding, however, a greater focus is identifying how the research and development activity will create innovation within the industry or business.
Business Expansion & Exporting
Too often, small businesses struggle to finance expansion activities because of limited cash flow. Achieving new efficiencies, increasing production, expanding into foreign markets, or other projects that require a significant financial investment are often the most difficult for businesses to commit to. Funding is available for:
- Export market entrance and expansion
- Facility expansion or retrofits
- Market research and competitive intelligence
- Adoption of advanced technologies (capital and software)
Grants and loans in the business expansion and exporting bucket can range from up to 10-75%.
Business expansion funding is provided to established companies with a history of financial stability. Most programs require that applicants be incorporated (either federally or provincially) for at least two or three years and remain in good financial standing prior to submitting a funding application.
Capital & Technology Adoption
Capital investment grants and loans tend to support specific spends that are directly attributable to improved business performance. Companies can access technology funding programs at both the federal and provincial level to offset project costs, which enables firms to purchase innovative technologies sooner than would’ve been possible by only using cashflows. Funding is available for:
- Large-scale productivity improvements;
- Software and advanced technology adoption;
- Financing of large capital investments; and
- Commercialization of new products and processes.
Funding is designed to improve competitiveness via automation, process creation and improvements, and innovation. SMEs need to be incorporated for at least two-three years to be considered for approval. Revenue growth is a key indicator of a project’s success, so applicants can expect to submit sales forecasts showing positive revenue growth over one-three years.
To learn the ins and outs of Canadian government funding and incentives, please download the Canadian Business Funding Guide.