As an entrepreneur, you know that getting venture funding to support your business growth is a gold standard. You’re also aware that it’s one of the most challenging factors you’ll face as a budding entrepreneur. There is a certain cachet attached to being “venture-backed”. However, giving up equity is a very expensive way to get the cash. Far better is to first try to make use of generous government grants aimed at spurring innovation.
The list below are 8 grants every Canadian entrepreneur should be aware of. These are all non-repayable sources of funding for your business. In other words, free cash to help you with your venture! These grants are geared towards technology-enabled businesses, and some apply to Ontario only (though other provinces may have similar programs).
Are you building an innovative technology company?
1. Industrial Research Assistance Program (IRAP)
This grant provides small to large grants (i.e., $50,000 to over $500,000) to support the development and commercialization of innovative, technology-driven new or improved products, services, or processes in Canada. Funding could be hundreds of thousands in total and is provided to you before you incur the expenses. You need at least 1 full-time employee to qualify, though larger companies tend to get more funding.
2. Scientific Research and Experimental Development (SR&ED)
Geared towards companies conducting R&D activities in Canada, this is a refundable tax credit, so you get the credit after you have incurred the expenses. This is likely going to be your biggest source of cash, though the application and reporting are the most involved.
Providing up to $70,000 ($40,000 if the founders are 30 years of age or greater), this grant supports Ontario-based start-ups transition from product development to market entry and company building. There are four application deadlines a year (March, June, October, January), though rumour has it that they run short on funds later in the year. So, it is best to apply earlier in the year.
Hiring young employees or fresh graduates?
This grant covers a portion of the salary of someone between the ages of 15 and 30 for a duration of 6 to 12 month.
5. The Co-operative tax credit
Provides up to a $3,000 refundable tax credit for hiring a student enrolled in a co-operative education program at an Ontario university or college
6. Talent Edge
Conducting R&D? This grant provides $10,000-$15,000 for hiring recent graduates to conduct R&D related activities. R&D does have a fairly broad definition, so take a look at their website for examples of qualifying work.
Creating digital media or informational products?
7. The Ontario Interactive Digital Media Tax Credit
This grant provides a 35–40% refundable tax credit for the creation of informational and digital media products. Informational products have a very broad meaning here, so take a look and see if you can make the case for your product.
Training your employees
8. The Canada-Ontario Job Grant
If you’re ramping up and training your employees, this grant provides up to $10,000 per trainee for eligible short-term training expenses. Keep in mind that training has to be conducted by an accredited institution.
All of the programs listed above have eligibility criteria and application timelines, so be sure to check out their sites for further information.
Show me the numbers
- 79.5% of SMEs rely on the personal savings of the business owner to support a start-up.
- 40.9% used credit from financial institutions.
- According to Stats Canada, 49.2% of SME’s get their funding from domestic chartered banks.
- Approval rates for government financing were 83.8% in 2011.
Resources for your business
The Government of Canada has a tool that allows you to filter throw a comprehensive list of available grants and federal programs for businesses.
The Government of Canada has a page which indexes a comprehensive list of grants and financing information for all industries. Keep in mind that proposed changes have been made to the 2018 Budget, however, results from the list of grants and financing is up-to-date.
Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.
The DMZ is a leading business incubator for tech startups in Canada. They help startups build great businesses by connecting them with customers, capital, experts and a community of entrepreneurs and influencers.
The DMZ is a partner in StartUp Here Toronto.