Government of Canada Business Grants (2021): The Complete Guide for Ontario Businesses

Did you know that every year there are billions of dollars given out as Government of Canada business grants?

And that’s not to mention the dozens of loan programs, tax credits, wage subsidies, and in-kind support provided by the Canadian federal government. 

To help you figure out what’s available, we’ve put together a list of the ministries, organizations, and groups on a federal level that are willing to provide incentives for Ontario for-profit businesses.

New Business Incentives for Government of Canada for 2021

Agriculture and Agri-Food Canada

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The Department of Agriculture and Agri-Food (as it’s officially known) provides multiple incentives to for-profit businesses related to agriculture and food processing:

  • The Advanced Payments Program gives a producers low-interest cash advances up to $1 million per year, based on up to 50% of the anticipated value of the producers’ ag product.
  • The AgriAssurance Program allows for-profit small and medium sized enterprises (SMEs) to receive non-repayable contributions to implement processes that address regulatory requirements for the ag and food industries.
  • The Agricultural Clean Technology Program provides non-repayable funding for research and development of clean technologies in the ag and food industries, including ideas related to a reduction of greenhouse gas emissions.
  • The AgriInnovate Program provides repayable contributions for the development of items aimed to help with competitiveness or sustainability in the ag sector.
  • The AgriInvest Program is a savings account that provides government contributions to match your deposits to your AgriInvest account. The government will match up to 1% of your allowable net agriculture and agri-food sector sales.
  • The AgriScience Projects Program has non-repayable funding for short-term research projects aimed at helping small and emerging sectors in the ag industry overcome financial barriers and other challenges.
  • The Canadian Agricultural Loans Act Program provides farmers with guaranteed loans for up to $500,000 to establish, improve, or develop farms.
  • The Dairy Direct Payment Program provides dairy farmers with payments to compensate cow’s milk producers for commitments made under recent federal trade agreements.
  • The Dairy Processing Investment Fund helps dairy processors with non-repayable contributions to support capital investment and to gain access to expertise.

Business Development Bank of Canada

The Business Development Bank of Canada has multiple programs aimed at helping businesses obtain funding needed for projects, start-up costs, and growth.

Some of the BDC programs for businesses include the following:

  • The BDC allows Ontario small businesses to apply online for a low interest-rate loan up to $100,000. Access to the funds is ready in roughly two business days. Applicants must have a good credit history and proof of revenue generation over the past two years.
  • The BDC Xpansion Loan program provides amounts greater than $100,000 aimed at funding projects for expanding your business, including market expansion, new technology costs, and hiring and training new employees.
  • Through the BDC Indigenous Entrepreneur Loan, indigenous entrepreneurs can access up to $350,000 in a loan for starting or growing a business.
  • The BDC Capital Women in Technology Venture Fund provides direct or indirect investment in women-led tech companies.

Canada Mortgage and Housing Corporation

The CMHC provides a variety of funding grants, no-interest loans, and low-interest loans for developing, maintaining, and repairing affordable housing for First Nations communities.

These funding opportunities are available to local authorities, non-profit agencies, and for-profit businesses.

Canadian Dairy Commission

Through the Matching Investment Fund, the CDC provides non-repayable contributions to companies that develop products and initiatives to stimulate demand for Canadian dairy products and ingredients. Those eligible include dairy processors, finished food product manufacturers, and food technology centres.

Canadian International Innovation Program

The CIIP is a funding program designed to develop and support collaborative industrial R&D projects with a high potential for commercialization between businesses in Canada and partner countries. 

The CIIP is a seed fund that stimulates networking activities aimed at furthering new partnerships.

Multiple countries are covered under the CIIP, including Brazil, China, India, Israel, and South Korea.

Department of National Defence

Business owners of all sizes who employ reservists called up to duty may apply for grants with the Compensation for Employers of Reservists Program.

This program allows businesses to receive lump sum payments for training and hiring of replacement workers, increasing overtime for existing employees, or a loss of revenue.

Export Development Canada

The Export Guarantee Program works with your bank to help you receive increased borrowing capacity for working capital to expand your business internationally. 

You may use this financing to expand sales investments, to purchase new equipment, or to move inventory closer to foreign buyers.

The Buyer Financing Program provides financial backing to reduce the risk of customer non-payment for a Canadian business that wants to offer flexible term payment opportunities to international customers, rather than only accepting cash up front. This flexible financing tool allows foreign customers to be able to potentially make larger purchases than with up-front cash alone.

FedDev Ontario

Using more than $1 billion in federal funding, FedDev invests in projects that drive growth and innovation in southern Ontario.

Some of FedDev’s programs include the following:

  • With the Business Scale-up and Productivity Program, businesses looking to grow locally or globally are eligible to apply for no-interest repayable contributions up to $10 million per project. Companies looking to foster innovation or technology advancement in rural areas also will be considered for this program.
  • The Community Economic Development and Diversification Program provides no-interest, repayable contributions for up to $5 million per project for incorporated businesses. Businesses that operate in small communities and rural areas that are seeking to diversify and transform the local economy are primarily eligible for the loans. Funding will help with attracting new business and investing in employment opportunities.
  • The Women Entrepreneurship Fund provides grants for expanding female owned businesses and helping them pursue market opportunities internationally. New application submissions are closed at the time of this writing, but the program may reopen in the future.

FedNor

FedNor is the federal government’s economic development organization for Northern Ontario. It operates a number of financial programs designed to help businesses in this area of the province:

  • The Business Scale-Up and Productivity Stream accelerates business growth in the areas of adopting new technologies that support improved productivity and expansion into new markets. Funding is available for project material costs, labour costs, capital costs, and other fees related to a specific project. These funds consist of repayable loans for small and medium businesses.
  • The Targeted Manufacturing Initiative for Northern Ontario Program gives small and medium sized businesses help with obtaining repayable loans for upgrading capital equipment used during the manufacturing process. Eligible costs include plant equipment purchases, software and hardware purchases, installation costs, and training costs.
  • For SMEs participating in youth internship programs, FedNor will contribute up to 50 percent of the costs (up to $31,500) for salary, employee benefit expenses, and professional skills development for a period up to 12 months.

FinDev Canada

Through FinDev Canada, businesses are eligible to receive financing opportunities and equity investments. Canadian businesses operating in developing countries and that are providing sustainable social and economic benefits to those areas are eligible. The funding options include the following:

  • Direct loans, where a business can use the money for operations, expansion, purchasing equipment, constructing facilities, or acquiring other companies.
  • Structured financing, where a loan will give the business the ability to develop projects for social and economic benefits for the host country.
  • Investments, where businesses that show a high level of potential receive flexible private equity growth capital over the long term.

Impact Canada

The Impact Canada organization receives federal government funding aimed at accelerating highly innovative projects to solve problems in society related to the economy, the environment, and social issues. 

It’s aimed at large businesses, small businesses, and individuals who are interested in innovation. Multiple projects are listed on the Impact Canada web site.

Invest in Canada

The Invest in Canada program provides incentives designed to help businesses of all sizes invest in R&D, attract talent, and make capital investments.

The Strategic Innovation Fund encourages investment in businesses of all sizes throughout Canada, including Ontario. An SIF project’s ability to gain funding hinges on the potential benefit of the project to Canada, including:

  • Commercialization of new intellectual property
  • Commercialization of new products
  • R&D for accelerating commercialization
  • Projects aimed at facilitating growth of Canadian firms
  • Large scale investments being brought to Canada
  • Collaborations between the public and private sector for advanced research

Non-recurring costs related to the project are eligible for funding. These include costs related to:

  • Direct labour
  • Subcontractors
  • Consultants
  • Materials
  • Equipment
  • Land
  • Buildings

Repayments are required with some aspects of the fund. For non-repayable contributions, the project must have a significant benefit to the public or the economy.

National Research Council of Canada (Industrial Research Assistance Program)

The NRC IRAP provides technology-driven funding for primarily SMEs.

  • One NRC IRAP program provides funding to help small and medium sized companies grow and expand their technology innovation projects. The eligible R&D projects can be at any point in the innovation cycle timeline.
  • Additionally, the NRC IRAP provides financial assistance to SMEs that hire young talent to work on R&D projects or other projects for developing new products or processes.
  • For small and medium sized businesses in Canada that want to do business internationally, NRC IRAP provides direct financial support for things like business and technology partnering, as well as joint R&D projects.

Natural Resources Canada

For industrial facilities, NRCan will provide financial assistance up to 50 percent of the eligible costs (up to $40,000) for energy management projects. Eligible projects must be intended to reduce greenhouse  gas emissions, demonstrate potential for energy management replication in other settings, or have the potential to show energy savings.

Natural Sciences and Engineering Research Council of Canada

Through this program from NSERC, businesses can collaborate with a college researcher for up to three years on R&D projects. The business pays part of the grant to cover the costs of the funded researcher, and the remainder of the grant comes from the NSERC program. The amount the business must supply depends on the total amount of the grant (up to $150,000 per year).

Next Generation Manufacturing Canada

Through the Supercluster Funding from the non-profit NGen organization, businesses are able to receive amounts between $1 million and $20 million per project to develop manufacturing related technologies and to bring them to market.

For companies not quite ready to create a detailed project proposal to qualify for Supercluster Funding, the Pilot Project from NGen delivers smaller funding amounts with fewer restrictions.

Scale AI

Through the Supercluster Funding from the non-profit NGen organization, businesses are able to receive amounts between $1 million and $20 million per project to develop manufacturing related technologies and to bring them to market.

Projects selected will receive funding (up to 40 percent), resources, and expert advice for projects aimed at accelerating adoption and commercialization of artificial intelligence used in supply chains. One of the applicant partners must be a small or medium sized business, and one must be an adopter of the AI technology.

Space Technology Development Program

The Canadian Space Agency’s STDP awards non-repayable contribution funding for projects that support innovation and growth of the Canadian space industry. Projects should stimulate industrial innovation or reduce technological unknowns for future space missions.

Sustainable Development Technology Canada

The federal government has created the SDTC foundation to support Canadian businesses looking to develop and demonstrate technologies aimed at addressing climate change, clean air, clean water, and clean soil. Projects eligible for non-repayable funding of up to $5 million should be pre-commercial in development. They should have the potential to create quantifiable environmental and economic benefits.

Trade Commissioner Service

The Trade Commissioner Service provides grants for businesses looking to expand internationally:

  • CanExport SME provides up to $75,000 to cover international market development activities for SMEs looking to grow globally. These funds can cover items like business travel, market research, or participation in trade events.
  • With CanExport Associations, funding is available for national trade organizations that are incorporated and are seeking to create new or expanded international business development activities. Annual funding of up to $400,000 is available for events such as trade shows, market visits, promotional tools, and marketing tools.
  • Small and medium sized Canadian enterprises looking to commercialize technological innovations have the ability to seek funding through CanExport Innovation. This program delivers up to $75,000 for establishing new R&D collaborations with foreign partners to co-develop, validate, or adapt technologies for commercialization. Funds can cover travel costs and legal costs, among other items.

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