Government grants and loans may also create additional cashflows and support for important initiatives, which lead to expanded projects being completed faster and more efficiently. Additionally, government funding support strengthens Canadian competitiveness and helps businesses become leaders on the global stage.

That’s why SMEs and entrepreneurs need to learn how to optimize their funding applications and integrate government funding into their strategic business plans. By doing so, they not only give their business extra support but allow the larger Canadian business ecosystem to thrive on an international scale. To help you better understand the benefits of government funding and proper application techniques, read our tips below:

How to use Canadian government grants and loans

1. Canadian government funding fuels directives which may be unable to proceed without further financial help;
2. Government funding supports business expansion and growth; and
3. Grants and loans from the government improve project outcomes.

Annually, businesses from every industry are awarded Canadian government funding to finish projects and improve them. Funding success stories demonstrate how other businesses may benefit from funding support from the government.

How to apply:

The Application Process for Canadian Government Funding

Accessing government grants and loans can be exciting and rewarding for small and medium-sized enterprises (SMEs) to undertake if they use the right resources and strategies.

“The application process is not easy, but it can be simplified by planning ahead and linking strategic goals to the right small business grants and loans programs offered through provincial and federal governments.”—Bernadeen McLeod, President of Mentor Works

To be successful, your business must understand the Canadian government funding landscape and be proactive in establishing a strategy for strategic projects and accompanying budgets. Here are four critical stages to starting:

Step 1: Build a strategic analysis for your needs and goals

Since government grant and loan programs are project-specific, it’s important to start by implementing both critical and nice-to-have projects that will directly support your company’s growth, as well as improve your competitive advantage.

Suggestion: Brainstorm with your team what may be improved. Consider these questions to start:

• Would hiring any co-op students or recent graduates be beneficial?
• Could innovative, updated technology help improve operations and systems?
• Do you have opportunities for business expansion? Would a detailed market analysis help you grow and expand overseas?
• Do you have room for research and development projects? Would these contribute to improving your products and/or services?

Step 2: Choose grants and loans that suit your business analysis

Choosing suitable government grant and loan programs is difficult for two main reasons:

1. There are many unique programs, all with their individual focuses, required criteria, processes for applications, and availability.
2. For SMEs, it’s very difficult to allocate internal resources to remain ahead of program releases and updates.

However, consulting firms such as Mentor Works offer an online database to Canadian government funding programs to assist with the dissemination of the variety of funding options.

Step 3: Use experts to apply with confidence and knowledge

After outlining funding programs that match your needs, you may choose one of the following options:

• Opt for professional grant writing services
• Attempt an application process internally.

Unfortunately, businesses that attempt funding applications on in-house often miss deadlines as they often underestimate the time it takes to create a compelling narrative for an application that speaks to both a program’s goals and the organizations’ vision and objectives.

Step 4: Enjoy the rewards of a successful government funding application

Aside from the excitement of achieving an application win, the application process requires being proactive and diligent. So, when a company receives between 15 to 75% of project expenses from government sources, there is more accountability for completing the project.

Frequently asked questions about Canadian government funding 

1. Does my business qualify for Canadian government grants and loans?

For most government programs, businesses should be incorporated for a minimum of three years and have at least 15 people on payroll, while keeping a positive net income. However, there are exceptions, such as COVID-19 relief and recovery funding programs, and more.

Please consult the Mentor Works Canadian Business Funding Guide for information regarding application criteria.

2. What programs are best for my business?

The first stage of Canadian government funding, as mentioned earlier, is to determine your goals. After this, external support services, like Mentor Works’s turnkey funding guidance, help this process with a customized list of programs that offer unique funding for specific projects. Browse our Government Funding Directory to find opportunities for your industry.

3. What rate of approval can I expect for government funding applications?

Approval success rates depend on each specific program and whether you’re able to fit the program design, such as eligible projects and expenses.

Even if your application covers all program criteria, there is never a guarantee that your application will be successful. However, the four aforementioned stages can help your business maximize success rates.

Access this full list of Canadian Government Funding FAQs to answer outstanding questions you may have, and always remember that there are many options for business funding support in Canada.

The Jobs and Growth Fund (JGF) is a new $700-million federal government funding program that aims to support Canadian economies with long-term growth and jobs creation following setbacks from the global COVID-19 pandemic. Also, JGF includes up to $70 million for small businesses established after January 2020.

“By investing in our job creators and the organizations that support them, the Jobs and Growth Fund will help to create quality jobs, pursue inclusive and clean growth opportunities, and empower businesses and communities from coast to coast to coast.”
– Mélanie Joly, Canada’s Minister of Economic Development and Official Languages.

These businesses must meet the program’s eligibility criteria. Highlighting this is crucial, as most grant and loan programs need businesses to be well established, meaning there is less funding for startups and entrepreneurs.

JGF financial support is being administered by Canada’s regional development agencies, including FedDev Ontario for Southern Ontario applicants and Western Economic Diversification Canada (WD) for applicants in Western Canada.

Funding snapshot: Jobs and Growth Fund (JGF) for Ontario and Western Canada

Applications are now being accepted on a continuous intake basis until March 31, 2024, or until funding is fully allocated. The Jobs and Growth Fund (JGF)  supports projects that stimulate job creation and long-term growth for Canadian organizations through a diverse focus on rebuilding the Canadian economy following the trials and tribulations of the COVID-19 pandemic.

Funding amount

• Eligible businesses may receive interest-free repayable contributions for up to 50% of eligible costs
• Eligible not-for-profit organizations could receive non-repayable contributions for up to 90% of eligible costs
• Eligible Indigenous organizations may receive contributions for up to 100% of eligible project costs
• Project contribution amounts do not normally exceed $10 million

Applicant eligibility

• SME Businesses, including co-operatives
• Not-for-profit organizations and community economic development partners
• Indigenous organizations

Eligible projects

To be eligible for the Jobs and Growth Fund, projects must:

Strengthen the capacity in sectors critical to Canada’s recovery and growth:

• Support scale-up and market expansion activities
• Develop emerging areas of global competitive advantage
• Support supply chain adaptation and diversification opportunities in critical sectors such as food production, medical supplies, and biomanufacturing

Foster an inclusive recovery:

• Support businesses owned or majority-led by underrepresented groups
• Increase the participation of underrepresented groups in the economy by supporting not-for-profit organizations that provide funding, business services, training, etc. for a more equitable workforce

Preserve Canada’s competitiveness and future-proof SMEs through digital adoption:

• Support the development or adoption of digital and technological solutions (i.e. Industry 4.0) to increase and promote business productivity
• Invest in technologies that help scale businesses, enhance their capabilities, and increase resilience

Support the transition to a green economy:

• Support the development and adoption of clean technology
• Help communities and businesses plan and drive clean, sustainable economic growth
• Partner with organizations to catalyze the development of green regional clusters
• Work with organizations supporting businesses to transition to a green economy

Program timeline:

• Applications will be accepted on a continuous basis until all funding is allocated.
• Certain costs may be eligible on a retroactive basis up to 12 months before the receipt of the project application, but no earlier than April 19, 2021.
• All projects must be completed prior to March 31, 2024.

If your Ontario or Western Canada organization wants government funding through the Jobs and Growth Fund (JGF), please reach out to the Mentor Works team to help streamline the application and grant writing process.

Government grants and loans for COVID-19 recovery

Although many Canadian provinces are no longer in strict COVID-19 lockdowns, and national vaccination rates are higher than any other country, many businesses across Canada are still feeling the negative impacts of the virus.

In addition to the new Jobs and Growth Fund (JGF), there are other government programs dedicated to providing COVID-19 relief and recovery funding. Stay posted on the Mentor Works COVID-19 Funding Programs Page for resources, news, programs, and COVID-19.

The new Canadian Federal Budget 2021 outlines plans for a total spend of $101.4 billion. With new pandemic business support options, including $17.6 billion towards cleantech innovation to combat climate change, it plans for a strong recovery and growth for all Canadian businesses.

SMEs and other businesses looking to understand how the budget can help their industry, business or other professional endeavors can check out the list of proposed initiatives below:

New options for small business recovery and growth

The budget proposes to provide continued business support during COVID-19 including:

• $12.1 billion in additional COVID-19 support to extend the CEWS, CERS, and lockdown support options for businesses and other employers until September 25, 2021.
• $4 billion for the new Canada Digital Adoption Program to help up to 160,000 small and medium-sized businesses buy the new technologies they need to grow and train up to 28,000 young Canadians.
• $2.6 billion to the Business Development Bank of Canada to offer grants, loans, incentives, and further business support options.
• $595 million for a new Canada Recovery Hiring Program (CRHP), which will run from June to November 2021, and will make it easier for businesses to hire back laid-off workers and/or to bring on new employees.
• $560 million to improve the Canada Small Business Financing Program.
• $500 million to revitalize community spaces through the Canada Community Revitalization Fund.
• $470 million over three years, beginning in 2021-22, to Employment and Social Development Canada to establish a new Apprenticeship Service.
• $101.4 million to create a Small Business and Entrepreneurship Development Program.

Funding investments for Canadian cleantech innovation

The budget also proposes to provide cleantech innovation investments including:

• $7.2 billion over the next seven years for the Strategic Innovation Fund (SIF).
• $2.2 billion to strengthen Canada’s biomanufacturing and life sciences sector.
• $500 million to the Industrial Research Assistance Program (IRAP).
• $450 million renewal of VCCI, with $50 million dedicated to life science tech and $50 million to create a new Inclusive Growth Stream to increase access to venture capital for underrepresented groups, such as women and racialized communities.
• $443.8 million for the Pan-Canadian Artificial Intelligence Strategy.
• $400 million over six years, starting in 2021-22, in support of a Pan-Canadian Genomics Strategy to kick-start the new strategy, and complement the government’s existing genomics research and innovation programming.
• $360 million over seven years, starting in 2021-22, to launch a National Quantum Strategy.
• $90 million over five years on a cash basis, starting in 2021-22, to the National Research Council to retool and modernize the Canadian Photonics Fabrication Centre.
• $60 million for the Innovation Superclusters Initiative.

Support options and opportunities for Canadian youth

There are also plans to provide a wealth of support to Canadian youth including:

• $4.1 billion to provide direct support for more affordable postsecondary education.
• $721 million over the next two years to help youth connect with employers and provide them with over 100,000 new, quality job opportunities.
• $100 million over three years to support projects for innovative mental health interventions and support programs.

Further notable federal budget 2021 investments

To ensure that Canada prevails in the global fight against COVID-19, creates a stronger economy for all Canadians, and advances in cleantech innovation, the plan will invest:

• $3 billion over five years, starting in 2022-23, to support the provinces and territories in creating and upholding high standards of care inside long-term care facilities.
• $424 million in 2021-22 to ensure the “safe reopening” of Canada’s borders, through funding further air travel protections and mandatory quarantine measures.
• $375 million to Global Affairs Canada to support Canada’s international COVID-19 response, with a focus on addressing the health needs of developing countries. This would facilitate the world’s poorest countries to access the tools necessary to help contain the spread of COVID-19.
• $271.1 million in 2021-22 to CATSA to maintain operations and enhanced screening services at the 89 airports where it works.
• $195 million over two years, starting in 2021-22, to Health Canada, the Public Health Agency of Canada, and the Canadian Institutes of Health Research to help develop national mental health service standards, in collaboration with provinces and territories, health organizations, and key stakeholders.
• $82.5 million in 2021-22 to Transport Canada to support major Canadian airports in making investments in COVID-19 testing infrastructure.
• $41.3 million over six years, starting in 2021-22, and $7.7 million ongoing, for Statistics Canada to improve data infrastructure and data collection on supportive care, primary care, and pharmaceuticals.

Additional federal budget 2021 funding and programs

To learn more about the overall breakdown of the Federal Budget 2021, including options for industry-specific support, regional support, municipal and non-profit support, and other additional support options for Canadian businesses, please read the detailed overview of the Federal Budget 2021.

“We are launching the Highly Affected Sectors Credit Availability Program to help those businesses hit hardest by the pandemic with low-interest, government-backed loans. By investing in Canada’s businesses, as well as workers and their families, we are investing in our shared recovery and a better future for all.”–The Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade in a Canada.ca News Release, Jan 26, 2021

HASCAP government funding supports all businesses that have experienced a substantial decrease in revenues by at least 50% because of COVID-19.

Qualified small to medium-sized Canadian businesses can receive up to $25,000 to $1 million in HASCAP support loans, and larger organizations with multiple locations, such as restaurants or hotels, can receive up to $6.25 million in government funding.

About HASCAP loans for COVID-19 business support

Administered through the Business Development Bank of Canada (BDC), the Highly Affected Sectors Credit Availability Program (HASCAP) aims to offer financial assistance to Canadian businesses that have been hit hard by the impacts of the COVID-19 pandemic.

Applicant eligibility:

Based on the following eligibility criteria established by the Government of Canada, a primary financial institution will determine whether a business qualifies for HASCAP loans:

• An eligible business must be based in Canada, and have been financially stable and viable prior to the current economic situation.
• An eligible business must have received payments either from the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS) by having demonstrated a minimum 50% revenue decline for at least three months (not necessarily consecutive) within an eight-month period prior to the date of the HASCAP Guarantee application.
• If an eligible business does not qualify for CEWS and CERS, but otherwise meets all HASCAP eligibility criteria, they must provide financial statements that reflect at least three months where their revenue decreased by a minimum of 50% within the eight-month period prior to the date of the HASCAP Guarantee application.

Amount:

An eligible business can apply for a HASCAP loan for each legal entity they own, up to a maximum combined amount of $6.25 million (all legal entities combined).

• Up to $25,000 to $1 million in loans for a single, small to medium-sized business.
• Up to $6.25 million in loans for large organizations with multiple business locations.

Eligible expenses:

HASCAP loans cannot be used to pay or refinance existing debts; the loan will be used exclusively to continue or resume operations by relief of payments relating to:

• Rent payments.
• Employee payroll.
• Any additional costs deemed eligible to sustain business operations.

Thinking about taking your business online during COVID-19 closures? The FITTskills Online E-Commerce Workshop gives you the training you need to get more customers from around the world by offering your products online.

Timeline:

• The HASCAP Guarantee is available until June 30, 2021.
• From a 4% interest rate and a repayment term of up to 10 years.
• Up to a 12-month postponement of principal payments at the start of the loan.

Other COVID-19 government funding support options

There have been dozens of government programs that have launched in support of the relief and recovery of Canadian businesses impacted by COVID-19 restrictions, lockdowns and overall pandemic fatigue.

To learn more about these government funding options offered to assist Canadian businesses during the COVID-19 pandemic, please visit the Mentor Works COVID-19 Funding Page.

Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.

Canadian employers, specifically, can receive up to 50-70% of an intern’s wage to a maximum $5k-$7k, or up to 50% of a recent graduate’s wage to a maximum $12k-$15k in hiring grants.

Spring and summer are the ideal times to use these incentives since there is a large youth talent pool during these times and funding programs are generally open to applications. Since many hiring grants operate on a first-come, first-served basis, interested employers should start the recruitment process as soon as possible.

Hiring grant options and how they work

While many Canadian businesses know that hiring grants and wage subsidies exist, few understand how they help, how they impact the recruitment process, or what they must do to access funding.

Most hiring grants and wage subsidies in Canada are directed at two types of hires:

1. Recent post-secondary graduates being hired into full-time, permanent positions.
2. Student interns being hired into temporary roles that provide relevant work experience.

Hiring incentives are provided to employers for a couple of reasons. For students and recent graduates, paid work experience provides relevant, meaningful job experience that leads to a greater understanding of their strengths and interests. For employers, internships and first career opportunities give their business access to a young, energetic audience that can grow within their company.

How much can employers receive in grants for graduates or co-op students?

When hiring recent post-secondary graduates, employers can receive up to 50% of the hire’s wages to a maximum of $12,000 to $15,000.

When hiring co-op students, employers can receive up to 50% of the intern’s wages to a maximum of $5,000. This increases to 70%/$7,000 if the intern is part of an under-represented group, such as women in STEM or newcomers to Canada.

How hiring grants fit into the recruitment process

Now that you know the options available when it comes to hiring grants, it’s important to illustrate how they fit into optimizing the recruitment process. Following these steps can help simplify the application process and maintain your funding eligibility:

1. Develop a candidate pool for your position.
2. Screen job candidates and select one person or more to tentatively fill the position(s).
3. Apply for hiring grants, matching the position and candidate to a relevant funding program.
4. Wait approximately five business days for the government’s response with the funding decision.
5. Hire the candidate and complete any additional documentation needed.

After funding is in place, you can formally provide an employment offer to the candidate.

Also, be aware that hiring a candidate and placing them on payroll prior to government funding approval can significantly complicate the process and often leads to applications being deemed ineligible.

Receive support to identify and apply for hiring grants

With so many funding programs available, it’s often best to reach out to a specialist who can discuss your specific hiring needs and identify a program that works best for your company.

Contact Mentor Works to discuss your eligibility, identify the types of incentives providing support, and optimize the application process.

Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.

This news bodes well for those looking toward recovery in the new year, but the road ahead requires much patience, financial strategy, and government support too. For struggling businesses, especially SMEs, the Regional Relief and Recovery Fund is a viable option that can help them financially stay afloat until the economy is back in full swing.

The Fall Economic Statement (FES) and Regional Relief and Recovery Fund (RRRF)

On November 30, 2020, the Government of Canada released the 2020 Fall Economic Statement (FES) titled Supporting Canadians and Fighting COVID-19. Focusing primarily on the support from the Regional Relief and Recovery Fund (RRRF), the FES report highlights details about RRRF statistics, projections, and strategy plans as they relate to COVID-19 support for Canadian health, safety, business, and jobs.

Canada’s Fall Economic Statement (FES) highlights that, since its launch in May 2020, the Regional Relief and Recovery Fund (RRRF) has supported over 15,000 businesses in Canada, including more than 5,000 women-owned organizations and over 8,500 rural companies, saving around 100,000 jobs during the ongoing global COVID-19 pandemic.

What is the Regional Relief and Recovery Fund (RRRF)?

The Regional Relief and Recovery Fund (RRRF) provides repayable interest-free loans that support the fixed operating costs of Canadian businesses that cannot meet the eligibility criteria to receive funding through other federal and provincial COVID-19 support programs.

The RRRF was recently extended and expanded in southern Ontario and businesses may now receive loans for retroactive costs from March 15, 2020 until March 31, 2021 for up to a maximum of $1 million, and select not-for-profit organizations are now eligible for funding.

“Our government will always be there to support Canadians to stabilize the economy and help businesses grow. We’re working with you to support good, local jobs and help Western Canada’s economy come back strong.”—Mélanie Joly, Minister of Economic Development and Official Languages

The expense deadline of March 31, 2021, for RRRF funding support is fast approaching, so those who are interested need to apply soon to receive interest-free loans to support their economic plans during the pandemic.

Canada’s 2020 Fall Economic Statement: Plans for Ongoing COVID-19 Support for Canadian Businesses

The Government of Canada’s 2020 FES highlights an ongoing action plan including proposed measures to continue protecting Canadians’ health, businesses, and jobs in order to maintain strong economic growth and stability. The full 2020 report can be accessed here.

A few of these major planning measures include:

• A new Highly Affected Sectors Credit Availability Program that would provide government funding in low-interest loans for hardest-hit businesses, including those in sectors like tourism and hospitality, hotels, and arts and entertainment.
• A $206 million investment over two years, starting in 2020-21, to the regional development agencies for a new Regional Air Transportation initiative.
• Extending the 25 percent top-up to the Canada Emergency Rent Subsidy until March 13, 2021.
• Extending the Canada Emergency Response Benefit for an additional four weeks.
• Increasing the maximum Canada Emergency Wage Subsidy rate to 75 percent for the period beginning December 20, 2020, and extending this rate until March 13, 2021.

The government is anticipating an additional investment of up to $500 million for RRRF funding to support Canadian businesses, bringing the total funding to over $2 billion. These changes have not yet been announced, but you can stay up to date on the RRRF or  COVID-19 funding news and support through Mentor Works.

To get more expert advice on how to manage your business and taking next steps during COVID-19, read our blog COVID-19 effects & next steps for your global business.