Business grants and loans provided by the Canadian government can be crucial in launching a new company or growing an existing one. Both provincial and federal governments offer a broad spectrum of programs to assist businesses across various industries in Canada. This article will guide you through available grants and how to obtain them.
Contrary to popular belief, government grants for small businesses are not limitless and are not accessible to all types of companies. For instance, if your business involves general retail or construction, it’s unlikely you’ll qualify for a grant, though loans may be possible.
Nevertheless, there’s an abundance of opportunities for Canadian government business grants and loans, particularly for businesses in rapidly expanding sectors like IT, software development, food, biotech, and fintech.
A search tool provided by the Canadian government allows you to find available support. By inputting information such as your industry sector and location, the tool will display a list of relevant government aid programs, including grants and loans.
So, what does the government consider grant-worthy?
Although not all sectors are eligible for business grants, the Canadian government and the Ontario government are particularly interested in addressing the following areas:
Innovation
Canada lags behind other wealthy nations in innovation, a shortfall that concerns politicians. Hence, they are eager to fund grants to promote the creation of new goods, services, or efficient manufacturing and delivery methods.
Canada provides tax incentives to companies engaging in research and development. The Scientific Research and Experimental Development program helps 20,000 businesses annually through $3 billion in tax breaks.
Exports
Exports are highly beneficial for the economy, as they generate foreign revenue and bolster the country’s trade balance. Government officials appreciate the value of exports!
Job Creation
Politicians are always pleased to see job creation as a result of government support. Grants are accessible to relatively disadvantaged areas such as Eastern Ontario and Southwestern Ontario.
Wage subsidies are offered by the Canadian government, especially for employers hiring youth or those with disabilities. There are various wage subsidy programs to explore.
What grants are available for small business startups?
If your startup is in an innovative field like IT, healthcare, or green technology, you might qualify for funding.
For instance, the MaRS Investment Accelerator Fund in Toronto invests in companies with a potential global market of at least $100 million. These companies must be Ontario-based. If you’re targeting potential buyers worldwide, you could be well-positioned for this opportunity. MaRS is particularly interested in early-stage companies.
If your company is outside of the technology field, you may not be eligible for government grants or investment funding. However, government loans may be an option, particularly if your business is located outside major metropolitan areas.
Refer to your province’s website for more information. The business grants Ontario page offers a comprehensive list of funding opportunities for companies and municipalities.
What grants and loans are available for established companies?
You don’t have to be a high-tech company like Shopify to be eligible for business grants. As mentioned earlier, governments appreciate job creation. If your business is expanding a manufacturing facility or growing in a remote area, you might qualify for funding.
For example, the Eastern Ontario Development Fund offers up to $1.5 million for companies operating for at least three years and employing at least 10 people (or at least five in rural areas). You only need to commit to creating at least five new jobs. Your business must have a facility in Eastern Ontario to be eligible.
The digital media tax credit is another notable program, focusing on companies developing educational and entertainment products for children under 12.
Notable Grants for Business Growth and Innovation
The Canadian government provides several grants and programs designed to support business growth and innovation, with three notable ones being the Scientific Research and Experimental Development (SR&ED), Industrial Research Assistance Program (IRAP), and the Canada Digital Adoption Program (CDAP). The SR&ED program offers tax incentives to organizations conducting research and development within Canada, thus stimulating economic development and technological advancement. IRAP provides financial assistance and advisory services to small and medium-sized businesses engaged in innovative or technology-driven activities. Lastly, the CDAP program aims to help Canadian small businesses adopt new digital technologies, thus enhancing their online presence, digital skills, and e-commerce opportunities. Each of these programs underscores the Canadian government’s commitment to fostering a conducive environment for business growth and innovation.
How do I apply for business grants and loans?
Each government program has specific rules and application processes. Here are some key considerations:
- Apply in advance: Application processing for funding requests can take several months. Submit your application well before your project is expected to begin.
- Get established: Some grants require your business to have been operational for several years. Start recording your revenues as soon as your business is established to build a track record that supports future applications.
- Seek advice: Many funding agencies provide pre-application consultations. This is a good opportunity to verify your eligibility and get application tips. If your business doesn’t meet the agency’s criteria, these meetings can save you the time and effort of applying. The officials may also guide you towards additional funding opportunities.
Does the government assist with exports?
Yes! Exporting contributes to economic growth, and the Canadian government actively supports this.
Export Development Canada, a federal corporation, promotes exports by providing working capital, financing, and risk mitigation services.
Final Thoughts
If your company is innovating and marketing pioneering technology, there are grant programs to help with research, development, and overseas sales. A bit of research can reveal which grants and loans are best suited for your business.
For additional information about business grants and loans, please contact us at Kedden. We’d be glad to help!
