Accessing government funds: The what, the why and the how
January 31, 2022 by Matthew Mongeon
Canadian manufacturers can access a broad spectrum of government grants and loans to offset strategic growth project costs. In fact, Canadian government funding for manufacturers tends to be more widely available than for many other industry segments, making industrial companies well-aligned to access financial incentives.
While manufacturers in some provinces have additional programs available, all Canadian manufacturers have the potential to succeed with government funding if they are able to strategically plan their growth projects. These manufacturing grant and loan programs can support technology adoption, facility growth, export expansion, research and development, hiring and training projects. The key is to have a proactive approach to funding.
Top federal funding programs
Provided through the Government of Canada, these government funding programs are available to manufacturers across the country. Discover how they can help your business grow and become more innovative.
Industrial Research Assistance Program (IRAP)
The National Research Council’s Industrial Research Assistance Program offers funding for technical or research-oriented projects to solve an internal innovation challenge. Funding supports novel research activities, including the development or improvement of new products, technologies or processes and the technical labour and Canadian subcontractor costs related to the research project.
IRAP offers up to $10 million non-repayable grant with 80 percent of direct labour and 50 percent of Canadian subcontractor expenses. Organizations eligible for funding must have between one to 500 people on payroll, be incorporated for two years and perform an innovative research and development project.
Canada Job Grant (CJG)
The Canada Job Grant program is a Canadian government funding program designed to reduce the cost of providing third-party skills training to new and existing employees. This training grant is available across most Canadian provinces, with each province responsible for co-branding and developing a system that’s suited towards its workforce and business makeup. Quebec is the one exception, offering its own training subsidies outside of CJG.
Funding contributions differ in each province, covering 50 to 100 percent of training costs (that is, course, exams, textbooks, software resources, etc.) to a maximum $5,000 to $15,000 per trainee. Applicants must be a Canadian SME with $2 million liability insurance. Trainees must be a permanent Canadian citizen or granted refugee status and currently on the employer’s payroll.
The CanExport program is currently on pause with an update planned for Fall 2021 as of the time of this article’s publication. The CanExport program aims to provide support to businesses looking to sell to new international markets. The program helps exporters improve their sales and brand exposure in new international markets through trade shows and marketing activities, packaging modifications and market research.
The program provides funding of up to 75 percent of project costs to a maximum $75,000 in non-repayable funding per project. Up to two applications can be submitted per government fiscal year (April 1 to March 31) and all project activities must be incurred before another application can be accepted. All applicants must be financially stable, have one to 500 payroll employees, $100,000 to $100 million in annual revenue, and be able to pay all project expenses not covered by the program.
Innovative Solutions Canada (ISC)
Innovative Solutions Canada provides government support and procurement contracts to stimulate technology research, development and commercialization. The program helps start-ups and small- and medium-sized businesses (SMEs) overcome technology development hurdles so that they can produce globally-demanded products and services, while also improving government operations. They have the potential to sell their product or technology directly to the government based on a request for quoting (RFQ) process.
Funding through this program has been split between three phases: phase 1 – grants up to $150,000; phase 2 – grants up to $1 million; phase 3 – government procurement contracts with no fixed maximum. Applicants must be a for-profit, privately held Canadian businesses with fewer than 499 full-time employees.
NGen manufacturing supercluster funding
The NGen Manufacturing Program supports collaborative technology development and application projects that help Canadian manufacturing companies compete globally.
NGen offsets up to 44.4 percent of eligible project expenses. Project costs should be between $1 million and $20 million, providing non-repayable funding of approximately $444,000 to $8,880,000. This program is open to all industries and sectors. Applicants must have a minimum of three private sector project partners; lead partner and participants must be NGen members.
Strategic Innovation Fund (SIF)
The Strategic Innovation Fund offers Canadian industrial and technology-based businesses financial support to fuel company expansion and research and development of products, processes and services.
The type of financial support awarded is at the discretion of the program. This can consist of a combination of repayable financial support and/or financial reimbursements up to 50 percent of project costs. Applicants can expect a minimum funding contribution of $10 million per project. Incorporated Canadian businesses with high growth potential and the ability to drive innovation are eligible to apply.
Top provincial funding programs
In addition to the Canadian federal manufacturing grants and loans listed here, manufacturers may also qualify for provincially funded programs or targeted incentives.
Ontario Automotive Modernization Program (O-AMP)
The Ontario Automotive Modernization Program helps automotive businesses improve productivity through technology adoption projects. At the time of writing, the program is not currently accepting applications, however the program’s website states that an update on the program will be provided in the Fall of 2021. O-AMP focuses on integrating innovative hardware and software that reduces costs, while expanding applicants’ manufacturing capabilities and productivity.
O-AMP provides up to 50 percent of eligible project costs to a maximum $100,000 in Ontario government grants (cost-sharing contributions). Applicants must be an Ontario automotive supplier with fewer than 500 employees. At least 50 percent of revenue must come from the automotive supply sector.
Atlantic Innovation Fund (AIF)
The Atlantic Innovation Fund is a Canadian government funding program dedicated to supporting innovative technology research projects. The program enables private-sector businesses, academic organizations, and research institutions to collaborate on the development of new technologies. Projects should focus on commercially viable technology development or adaptation.
This program is open to businesses, research institutions, and academic institutions operating in Atlantic Canada (Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island). Business-led projects may receive up to 75 percent of expenses; non-profit applicants may receive up to 80 percent of expenses. The maximum funding amount awarded to a project is $3 million.
Southwestern Ontario Development Fund (SWODF)
The Southwestern Ontario Development Fund (SWODF) offers funding to support projects that involve investing in new capital equipment, developing skills, enhancing productivity, and developing new infrastructure with the goal of creating new jobs within Ontario. The program will provide funding for up to 15 percent of eligible expenses to a maximum $1.5 million in funding for projects with budgets up to $10 million. Projects with budgets that exceed this amount may be eligible to receive a combination of funding of up to $5 million.
Applicants must be established for at least three years, have 10 or more full-time employees, and operate in southwestern Ontario. Projects must be completed within a two- to- four-year timeline and create at least 10 to 15 new full-time positions depending upon project size and company size.
Manitoba Industrial Opportunities Program (MIOP)
The Manitoba Industrial Opportunities Program provides low-interest repayable funding contributions to attract small and medium-sized businesses into the province. Funds provide a critical pathway to securing large-scale investments from businesses who are established or looking to begin operations in Manitoba.
Established or commercially viable businesses in Manitoba are eligible to apply. Businesses must provide a minimum of 20 percent of eligible project costs. Approved applicants may receive a repayable funding contribution ranging from $500,000 to $5 million. The repayment terms of the funding range from five- to- seven-year repayment periods at prime plus two percent.
How to navigate the government funding process
The programs listed throughout this article are just some of the many grants and loans available to Canadian manufacturers. Identification of government funding programs is just one stage of the funding process, however. With this information, your business must align applicable projects and strategic spends, then craft and submit a detailed application that reviews your opportunity.
Matthew Mongeon is a marketing coordinator at Mentor Works. He helps business owners by creating educational content on what government funding opportunities are available to Canadian businesses. To find out your business’s eligibility for grants and tax credits, visit mentorworks.ca.