The Power of Government Funding: COVID-19 Recovery for Ontario ICT Businesses

Ontario is one of Canada’s largest tech hubs and has continued to draw in companies of all sizes – the startups, those in the scale-up stages, to the large global corporations – as the talent and opportunity has proven to be endless.

Unfortunately, COVID-19 has created its fair share of challenges for businesses of all sectors in not only the province, but Canada as a whole.

The federal and provincial governments have made available immediate temporary relief, but have you thought about a long-term recovery strategy? While multiple payment extensions may offer a sigh of relief, be proactive and find a way to maintain cash flow towards critical operating and strategic growth projects.

Create an Opportunity out of Today’s Circumstances

It can be difficult to visualize the impact of developing and executing a multi-program government funding plan, but the results are profound. Without a doubt, the time and resources required to access government funding programs are worth it.

Typically, a business’s strategic growth projects can align into four categories: capital investment, research and development, hiring and training, and business/market expansion. We’ve highlighted some of the top government funding programs in these four investment areas that Information & Communications Technology (ICT) businesses should take note of.

Bucket 1: Capital Investment Programs

Businesses should first focus on what key capital expenses they need to make, and would like funding support for, that will help them become more productive.

Community Economic Development and Diversification (CEDD)

Available via FedDev Ontario, the CEDD program supports projects committed to improving productivity, capacity, and competitiveness of businesses to increase employment and growth opportunities, as well as enhancing the resilience of communities.

• Amount: Incorporated, for-profit businesses may receive a repayable contribution (no-interest loan) from $250,000 up to $5M per project.
• Applicant Eligibility: Legally incorporated businesses, including Indigenous-owned businesses, with operations in rural areas of eastern and western Ontario.
• Project Examples: Adoption of new equipment; market development, diversification, and expansion; and facility improvement or expansion to support greater economic diversification.

Bucket 2: Research and Development Programs

Industrial Research Assistance Program (IRAP)

Designed to help accelerate the research and development projects of Canadian innovators, IRAP can be leveraged to subsidize a portion of payroll costs.

• Amount: Coverage ranging from 50-75% of payroll costs for projects.
• Applicant Eligibility: Canadian-owned, incorporated private sector companies with <500 employees and in-house R&D capabilities (i.e. technical staff). Potential applicants must first present their project idea to an Industrial Technology Advisor (ITA).
• Project Examples: Developing a new version of a product or service that has an innovative feature such as reducing energy usage, increasing productivity, etc.

NGen Capacity Building Projects

Next Generation Manufacturing Canada (NGen), one of Canada’s five innovation superclusters, administers $192M in federal funding for collaborative technology development and application projects among member organizations (membership is free).

The Capacity Building Project stream supports Canadian SMEs by de-risking their implementation of advanced manufacturing technologies that will improve competitiveness and grow customer sales. This stream offers funding for three specific types of projects:

• Pilot Projects: Funds partnerships of at least two SMEs undertaking activities to prove out technology implementation projects such as manufacturing process development, risk mitigation planning, and business case development. Project costs should be $100,000-$500,000 of which NGen may reimburse up to 50%.
• Feasibility Studies: Funds partnering organizations (including at least one SME) undertaking advanced manufacturing, business planning, and technology implementation strategies such as risk assessments, market studies, and/or economic analyses. Project costs should be $50,000-$200,000 of which NGen may reimburse up to 50%.
• Cluster Development: Supports new or existing clusters (minimum five SMEs) that are taking on a transformative initiative in advanced manufacturing such as commercialization, IP development, and/or training. Maximum project value is $150,000 of which NGen may reimburse up to 50%.

AV Research and Development (R&D) Partnership Fund

A pillar of the Autonomous Vehicle Innovation Network (AVIN), the AV Research and Development (R&D) Partnership Fund offers AV technology innovators (SMEs) Ontario government grants to develop, prototype, and validate pre-commercial autonomous vehicle technology. There are two streams of available funding: Stream 1 – Collaborative R&D Projects and Stream 2 – Technology Demonstration Projects.

• Amount: Up to one-third of eligible project costs to a maximum of $100,000 for Collaborative R&D Projects and up to one-third of eligible project costs to a maximum of $1,000,000 for Technology Demonstration Projects.
• Applicant Eligibility: Ontario-based SME technology developers with fewer than 500 full-time employees. Applicants must partner with at least one other organization, which may include another SME, national and multi-national enterprises, academia, municipalities, non-profits, or Indigenous Communities.
• Project Examples: Development and demonstration of pre-market technologies (TRL 3-7) in the Connected and Autonomous Vehicle (C/AV) sector. Some priority areas include mass light vehicles, heavy-duty vehicles, transportation infrastructure, and intelligent transportation systems.

Interactive Digital Media Fund (IDMF)

Administered by Ontario Creates, the Interactive Digital Media (IDM) Fund is an Ontario government grant that offsets a portion of costs directly related to concept definition and production projects. The Concept Definition (early-stage activities) and Production (market-ready projects) streams provide IDM content creators with funding for high quality, original interactive digital media content projects that make a positive contribution to the Ontario economy.

• Amount: Up to 50% grant to a maximum of $50,000 for Concept Definition projects, or $250,000 for Production projects to release interactive digital media content to end- users.
• Applicant Eligibility: Incorporated, Ontario-based digital media companies (can be Canadian-owned), with at least one owner/employee with minimum of three years of related industry experience.
• Project Examples: Interactive digital media content creation/development that is unique, creative, professional, and is intended to educate, inform, entertain, and generate revenue.

ENCQOR 5G Technology Development Program

The ENCQOR 5G SME Technology Development Program supports collaborative 5G technology development projects with government funding to further develop, integrate, test, or validate pre-commercial 5G technologies.

• Amount: Awarded funding is based on the current Challenge Statements but typically ranges from $50,000 to $500,000.
• Applicant Eligibility: For-profit Ontario SMEs with fewer than 500 employees. Applicants must partner with an ENCQOR 5G Anchor Firm (Ciena, Ericsson, Thales). Additional eligibility criteria may be enforced based on some Challenge Statements.
• Project Examples: Be developed in response to a posted Challenge Statement, have a technology readiness level (TRL) of 1-7, and use the ENCQOR 5G Innovation Platform as a Service (iPaaS) testbed.

SCALE.AI

The Supply Chains and Logistics Excellence AI (SCALE.AI) supercluster enhances Canada’s existing supply chain practices by boosting economic development through faster adoption and integration of artificial intelligence (AI). It seeks to connect researchers and industries to establish Canada as a global AI development hub.

• Amount: Up to 40% of eligible costs for projects that can accelerate the adoption and commercialization of AI for supply chains. Minimum 2:1 cash match from applicant and/or partners. The match must come from private sector contributions.
• Applicant Eligibility: All national and international companies, but projects must occur in Canada and have at least one SME partner. SCALE.AI encourages projects that demonstrate collaboration across large and small enterprises, research institutions, and academia.
• Project Examples: Projects should contribute to strategic objectives such as AI adoption and commercialization of AI-based products. They must also benefit Canada’s supply chain eco-system and help Canadian supply chain companies compete globally.

Bucket 3: Hiring and Training Programs

Your business has just embarked on an R&D project; does your team need extra training to be successful? Or maybe you simply need extra hands. Layering on hiring and training grants can be critical to meet your current and future needs.

Canada-Ontario Job Grant (COJG)

The Canada-Ontario Job Grant (COJG) is an Ontario government funding program that offers training grants to employers. Through the program, companies may receive non-repayable funding from the government to purchase third-party business training programs, including training for in-demand skillsets.

• Amount: Grant up to 50% (>100 employees) or 83% (<100 employees) to offset up to $10,000 per trainee. Small businesses with new hires may receive up to 100% coverage to a maximum of $15,000 per trainee.
• Applicant Eligibility: For-profit and not-for-profit sector employers, First Nations, and organizations acting on behalf of employers may apply. They must be licensed to operate in Ontario and be applying for training that is delivered in Ontario and is related to a job that is in Ontario.
• Project Examples: Training topics are to relate to the trainee’s career or skill development. Eligible training programs include leadership, financial planning, marketing, project management, software and technology, and more.

Hire a Full-Time Post-Secondary STEM Graduate

Funding is available to assist innovative businesses to connect with recent graduates from STEM-related (Science, Technology, Engineering, Mathematics) programs.

• Amount: The program provides up to a maximum of $15,000 in wage subsidies.
• Employer Eligibility: Canadian organizations (for-profit SMEs, not-for-profits, post-secondary institutions, municipal governments, etc.) providing a full-time STEM- related internship for six to 12 months.
• Candidate Focus: They are to be a Canadian citizen, permanent resident, or have refugee status, be under the age of 30 before the start of the internship, and have graduated in the last three years from a post-secondary STEM program.

Hire a Full-Time Post-Secondary R&D Graduate

Take advantage of funding available to cover Ontario college and university students, as well as recent graduates, to work on industry-driven R&D projects in all sectors.

• Amount: Up to $10,000 per four-month unit to a maximum of $60,000 (six units).
• Employer Eligibility: Ontario-based businesses with research-oriented projects where results can be commercialized to benefit both the applicant and the Ontario government. The current focus is on automotive manufacturing companies or product/service providers for the automotive industry.
• Candidate Focus: Final-year undergraduate student; master’s or Ph.D. student; or within three years of graduation from an undergraduate or master’s program from an Ontario college, university, or research hospital.

We have upcoming Hiring & Training webinars this Spring! Register today for the latest updates on programs available.

Post-Secondary Co-op Hiring Grants – Open for Summer

There are hiring grants available to provide a portion of a current post-secondary student’s wage while they complete a paid, full- or part-time co-op placement. The roles can be in any industry but must support the student over a full semester (minimum 16 weeks).

• Amount: Up to 50% to $5,000 or up to 70% to $7,000 if the student is a woman in STEM, has been in Canada for less than 5 years, identifies with a disability, or is a first-year student.
• Employer Eligibility: Canadian businesses can be in any industry and only net new positions qualify. Those looking to fill placements from May-August 2020 may now apply.
• Candidate Focus: Must currently be enrolled in a post-secondary program that includes a work-integrated learning component (mandatory co-op/work placement). The student can be in any program of study. They are to be a Canadian citizen, permanent resident, or have refugee status. Must not be hired based on nepotism.

Bucket 4: Market Expansion Programs

While international travel has halted, for the time being, there are still programs that can be used to tap into the markets recovering from COVID-19.

CanExport SMEs Program

The CanExport SMEs program provides financial support to eligible Canadian exporters for marketing and expansion activities in up to five target export markets. Eligible expenses include marketing activities, packaging modifications, market research, and other initiatives.

• Amount: Up to 75% of eligible costs associated with export marketing projects to a maximum $75,000 grant per application.

• Applicant Eligibility: 1-500 FTEs on payroll, $100,000-$100M in annual revenue, 1+ years incorporated with taxes filed, and project expenses must be at least $20,000. The applicant’s sales must be under $100,000 (or less than 10% of total sales) in the target export market(s) over the previous 24 months.

• Project Examples: Promotional video creation, designed for a foreign market.

Apply for COVID-19 Loan and Grant Programs

Take the next step and find out if your business is applicable for Canadian government loan and grant programs related to COVID-19.

View the latest COVID-19 funding program updates on our support page or register for a free Canadian government funding webinar to learn about the latest funding updates.