Canadian Government Funding Landscape: A Wrap on 2019 and Insights on 2020

Well, whether we’re thrilled about it or not, we’ve officially put 2019 behind us and have welcomed 2020! As Canadians prepare for the year ahead, many businesses plan to undergo a similar jumpstart. Companies and governments operate on cycles that change throughout the year. These organizations tend to prepare and/or focus on annual budgets while also planning how strategic growth projects will unfold over the coming months or years. We’ve seen a lot of change and impacts with provincial and federal funding over the last year, and we’re expecting 2020 to be no different. The start of a new year is an ideal time to establish or re-focus your government funding plan.

The government funding landscape is constantly changing. Companies should evaluate their growth priorities and consider if there are government funding programs that can help them achieve success.

Significant business growth challenges can be turned into growth opportunities with careful planning and use of Canadian government funding programs. Hiring and training employees, researching and developing innovative products/processes, expanding production and exports, and purchasing advanced technologies are just some of the ways that businesses plan to build a competitive edge over the coming year; fortunately, these are all areas where companies can receive government grants and incentives.

Canadian Government Funding: A Look Back at 2019

In 2019, one of the biggest trends we saw was from the Trudeau government and their offer of “pre-election funds created.” These were a range of one-time funds such as the Steel and Aluminum Initiative (SAI), Climate Action Incentive Fund (CAIF), and Women Entrepreneurship Fund (WEF). All are being called “one-time funds” because it is unknown if there will be a second round of funding.

Cleantech Funding

With the Liberal government back in power following the 2019 Canadian federal election, we saw a huge focus on cleantech funding initiatives – such as the Electric Vehicle Infrastructure Demonstration (EVID) Program and the Zero-Emission Vehicle Infrastructure Program (ZEVI) – and our team is waiting to see how the money will continue to be dispersed in 2020.

Intake Deadlines Increasing in Popularity

In 2019, we saw an increase in intake deadlines – for example, multiple federal and provincial programs only had an intake of five to eight weeks – some with several intake periods throughout the year. This will hugely change businesses’ approach to government funding this coming year and make it even more important to be proactive with their strategic plans and project budgets.

Growth Opportunities for Canadian Businesses

Consider the following growth opportunities for Canadian businesses over the coming months, and don’t hesitate to contact a Canadian Government Funding Planner™ with questions about the programs and investment areas identified below.

Growth Opportunity #1: Hiring and Training

Recruiting, retaining, and improving the skillsets of employees is often seen as one of, if not the, most difficult aspects of running a business. Ensuring your team understands customer problems, and can create or implement solutions to those problems, is essential to providing sustained value. With a competitive job market and near record-low unemployment across Canada, being able to attract top talent has become increasingly important. Therefore, employers must be constantly seeking high-quality candidates, then supporting their career growth through periodic skills training.

Canadian government funding can help develop a team of highly capable employees in a few ways:

• Funding to Hire Recent Graduates: With many college and university students finishing their last semester at this time of year, employers have a wide range of applicants to choose from. Employers should consider tapping into hiring incentives, which can provide up to 50% of the graduate’s wage to a maximum $12,000 to $20,000 over the first year of employment. Ontario businesses hiring recent Master’s and/or PhD graduates may receive up to $20,000 to $35,000 per hire.
• Funding to Hire Co-Op Students: Hiring co-op students is another way to access grants while building your team’s capabilities. Employers can hire students for a period of 12-16 weeks to accomplish specific projects or expose the students to other valuable work experiences. Government funding programs tend to provide about 50-70% of co-op wages to a maximum grant of $5,000 to $7,000 per net new intern.
• Funding to Train Employees: Now is also a great time to consider the skills of your team and assess whether training programs could help improve its performance. Building a training plan that leverages internal and third-party training is vital for team growth and is another area where government funding can support. The Canada Job Grant is one of these funding programs; managed through provincial and territorial funds such as the Canada-Ontario Job Grant (COJG), employers can access up to 50-83% of training budgets to a maximum $10,000 per trainee. After six years, the program will be closing on March 31, 2020 and it is unclear whether the program will re-open.
• Training for Adaptation of New Technology, Processes, or Procedures: The Yves Landry Foundation Funding for Training Via the Government of Canada focusses on production-based training that positively impacts a manufacturer’s productivity and export revenue. Training should improve employee skills, productivity, and expand export capacity. Funding received can be up to 25-50% of expenses to a maximum of $100,000. The next intake is proposed in late Q1 2020.

Growth Opportunity #2: Research and Development

Research and development are critical to business competitiveness. Without the constant improvement of a company’s products and services, it is increasingly difficult to win customers and increase the revenue generated per transaction. Devoting time and resources towards innovative R&D will help ensure that your organization is proactive to new technological advancements and opportunities to better serve customers. While investing in exploratory innovation activities can carry risk, it is essential to leadership and to forging a greater share of the available market. Over the last year, we’ve also seen a greater focus on collaborative-based programs and call for proposal programs – which will require a shift in mindset for Canadian organizations.

Canadian government funding can help organizations perform cutting-edge research and development projects in several ways:

• Product and Process Innovation: The Industrial Research Assistance Program (IRAP) is one of Canada’s longest-running government grant programs, awarding non-repayable contributions towards innovative projects that carry some degree of technical risk or uncertainty. It provides up to 60-80% of research costs to a maximum $10 million in support, although the average range for most IRAP wins starts around $50,000 and can easily scale to provide hundreds of thousands in research grants. Common research themes include product and process development, business process mapping, and feasibility studies.
• Academic Research Support: While IRAP tends to support internal and professional consultant fees, some organizations may wish to involve a local post-secondary institution to support innovative projects. To this end, the Natural Sciences and Engineering Research Council of Canada (NSERC) provides some support programs that offset the costs incurred from working with a professor and team of student researchers. NSERC Engage typically focuses on short-term (up to six-month) research projects, while NSERC Alliance supports projects that fall in the one to five-year range. Since it’s been announced that NSERC funding programs will be enhanced starting in 2019, it will continue to be an important source of research and development funding for businesses.
• Accessible Technology Development: The Accessible Technology Program (ATP) supports development of technologies that enable people with disabilities to succeed in the digital economy. Businesses can receive up to 50% of eligible project costs to a maximum non-repayable contribution of $4 million per project per year to develop and test devices that help overcome numerous disabilities.
• Innovation Challenges: Innovators can also respond to the federal government’s identified innovation challenges through Innovative Solutions Canada (ISC), a multi-tiered funding program. The program uses current challenges experienced by government departments to request technology-based solutions from industry. Companies may receive up to $150,000 to perform proof-of-concept projects, up to $1 million to develop prototypes, and can also receive procurement contracts if the proposed solution can be adopted by the federal government.
• International Travel and Meeting to Secure a R&D Collaboration: The CanExport Innovation (CXI) grant – formerly known as Going Global Innovation (GGI) – reduces the cost of research collaboration development with international partners. Companies traveling to foreign markets to secure and formalize the conditions of a potential research partnership can receive grants to offset travel, meeting, and accommodation expenses. There cannot be a formal partnership in place before the trip. Applicants may receive up to 75% to a maximum of $75,000 in funding.
• Collaborative Technology Research and Development: As administered by Next Generation Manufacturing Canada (NGen), the NGen Manufacturing Program taps into Innovation Superclusters Initiative (ISI) funding to support groups of businesses that develop high potential technologies, create groundbreaking process transformation, and de-risk the adoption of technology to help manufacturers compete globally with up to 44.4% or $444,400-$8,880,000 in grants.
• Demonstration, Commercialization and/or Adoption of Agri-Innovations: The AgriInnovate program provides up to 50% or a maximum of $10M in repayable funding (government loans) for projects which increase agri-sector competitiveness and sustainability through innovative technology development and commercialization projects. Innovations can be a new invention or significant modifications to existing technologies, processes and services.

Growth Opportunity #3: Business and Export Expansion

Growing your business through large-scale expansion projects may seem daunting, but one must weigh the potential benefits and drawbacks of such projects over a span of years to understand if it’s worthwhile or not. Developing new facilities or expanding current ones, filling those facilities with advanced technologies, hiring and training workers to support those facilities, and expanding your product/services to new customers are all part of a long-term success strategy and must be supported with considerable investment.

Fortunately, Canadian government funding can help expand your business’ capabilities and support global market diversification through:

• Canadian Exporters: Once your business has scaled production and is ready to seek new customers, a common strategy is exploring international export markets. Exploratory trade shows and trade missions are routinely used by businesses to conduct market research, develop a supply chain, and seek new international customers. One of Mentor Works’ most popular programs, CanExport addresses these export initiatives and received a revamp in August 2019, providing companies with up to 75% of project costs to a maximum $75,000 per application. Aside from event registration, these export grants also support travel fees and marketing material translation/development for foreign audiences.

Growth Opportunity #4: Capital and Technology Adoption

For many businesses, significant expansion projects may require too large of an investment. More common among companies is acquiring a specific piece of equipment that has an immediate impact on revenue or addresses a specific challenge impeding growth. Advanced technologies and computing systems can lead to a dramatic improvement in productivity and/or eliminate process bottlenecks, which is why this investment area gets a lot of attention in the manufacturing industry and other vital sectors.

Canadian government funding can support investments into innovative equipment and technologies through:

• Significant Technology Investments: Businesses adopting highly innovative technologies, especially if those technologies are new to the industry or to Canada, may receive support from the Strategic Innovation Fund (SIF). SIF provides up to 25-50% of eligible project expenses as a combination of repayable and non-repayable contributions. This is a popular choice for large corporations that plan to integrate one or several new technologies and have implementation costs that must also be considered. A minimum budget of $20M is needed – this is a large-scale growth program. Hang tight for April 2020 as we wait to hear more about the future of this program.
• Technology Commercialization for Business and Export Growth: The Business Scale-up and Productivity Program (BSP) continued to provide support to Canadian businesses. Administered through Canada’s six regional development agencies (RDAs), BSP varies from region to region but generally supports large-scale expansion projects that carry the potential to improve productivity, create jobs, and expand export potential. In southern Ontario, businesses can receive up to 35% of eligible project expenses to a maximum $10 million in no-interest loans.
• Southwestern/Eastern Ontario Growth: Ontario businesses can also benefit from technology grants provided through two related programs, the Southwestern Ontario Development Fund (SWODF) and Eastern Ontario Development Fund (EODF). After about a 10-month closure, the programs re-opened in Fall 2019 with fresh eligibility criteria and eligible expenses. SWODF and EODF provide up to 15% of investment costs to a maximum $500K in expansion grants, or up to $5 million as a combination of repayable and non-repayable contributions. There are three more intakes noted in 2020, so there is abundant opportunity to apply to one of these programs!
• Ontario Automotive Manufacturers: Specifically for automotive manufacturers in Ontario, the Ontario Automotive Modernization Program (OAMP) began offering support in 2019. OAMP was built as an enhanced version of the popular Automotive Supplier Competitiveness Improvement Program (ASCIP), which is no longer accepting applications. The program will provide non-repayable contributions of up to 50% of project costs to a maximum $100,000 per application. The next intake is expected to launch in Q1 2020.
• Agriculture and Agri-Food Expansion: For agricultural producers and processors, a slightly different set of government funding programs can help address expansion and export projects. The Canadian Agricultural Partnership (CAP) is a federal-provincial-territorial suite of programs where specific incentives range in each province or territory supported. This variability helps address local growth challenges impacting the potential of producers, processors, and other businesses in the agri-food value chain. Funding typically supports up to 25-50% of expansion and investment costs. The next intake is expected in late Q1 2020.

Develop a Canadian Government Funding Plan

Ready to build a funding plan based on the growth opportunities and programs identified throughout this article? Join Mentor Works’ team of Canadian Government Funding Planners™ during an upcoming webinar to learn more about the government funding landscape. These 30- to 60-minute sessions take a deep-dive into funding eligibility criteria, how the funding process works, and identify specific government funding programs your business can use to fuel its growth.

Register for an upcoming webinar to learn more about funding programs for your industry and specific growth opportunities.