Government Grants that You Must Know when Investing in Canada

Posted by    on 23-03-2021
Government Grants that You Must Know when Investing in Canada

Many businesses, investors, and individuals have experienced the frustration of failing to find the appropriate government funding solutions available in Canada. This can be easily understood when taking into consideration that the world of government grants available for businesses can be quite complex and difficult to navigate. The large number of government programs currently offered by the government of Canada and the intricacy of grant application processes, regulations, and deadlines can result in an overwhelming experience.

In this article we hope to bridge the gap that separates Canadian government initiatives from existing or future businesses. What follows is a summary of programs as a helpful resource if you are a private equity firm (PE) seeking investment opportunities or if you are in the mergers and acquisition (M&A) sector advising potential investors in Canada. Business associations and chambers of commerce should also be aware of these incentives in order to better advise their associated members so that they can maximize profits and the generation of employment.

Government Grants Simplified

In order to simplify the government grants available in Canada for businesses, programs can be sorted in three ways:

  • Geographical location
  • Sector of the economy
  • Purpose or the type of project for which your business is seeking funding

The geographical location plays an important role when seeking government funding solutions. Although many programs repeat from province to province, the return of investment may vary. For instance, when it comes to workforce development or employee training, in some provinces the available programs may cover up to 100% of the training costs while other provinces may have a cap at 83%.

If you are about to invest in Canada or are planning to expand your business within Canada, you may want to also consider the location within the province since there are always areas in which the Government tries to foster employment where higher benefits can be expected. For instance, areas away from large cities normally have available programs that are unique to them.

The sector of the Canadian economy where you are currently investing or are about to invest is another classification for government funding programs that can make your search process more effective. There is a large variety of programs that can be grouped within the sector of the economy, including, but not limited to, any type of manufacturing, health care, technology, agriculture, food, etc.

However, the purpose or the type of project for which your business is seeking funding is, in many cases, the best way to start your search for funding options in Canada. These purposes or objectives can be simplified by sorting them into four main groups:

  1. Innovation: these types of incentives are related to product development or product upgrades, implementation of new processes or the redesign of existing processes, or simply improvements to your operations by overcoming technological challenges. These types of incentives are applicable across many sectors of the economy, ranging from all types of manufacturing companies to technology, software, healthcare, and engineering firms, to name a few.
  2. Business development and expansion: in this category there are programs oriented to fund your business expansion efforts as well as your sales and marketing endeavors. Sales and marketing costs for participating in trade shows held overseas with the intent of selling your products and services in that country are eligible under these types of programs. These programs also include business expansions within Canada and cover several costs such as the acquisition of equipment.
  3. Human resources: these types of programs include hiring and training grants. The objective of these incentives is not only to foster employment but also develop the workforce by means of training your existing employees or candidates that your business may be willing to hire after the training is completed. The type of corporate training and certifications vary significantly and can include Lean Six Sigma certifications or leadership skills that improve the ‘employability’ situation of the trainees. These grants are applicable to a large range of businesses regardless of the sector of the economy: examples are companies in the service sector (financial, hospitality, retail, etc.) as well as those in manufacturing, energy, technology or the public sector.
  4. Capital acquisition: this category includes the acquisition of new or second-hand equipment. There are further incentives available when the acquisition of this equipment may bring additional benefits related to reduce the impact of climate change, such as acquiring equipment with higher efficiency in energy consumption or lower greenhouse gas emissions.

How to Optimize the Benefits of Available Programs

As was mentioned earlier, there are government grants designed to address specific industries or sectors of the economy or incentives that are specific to a province or region. To find out more about the opportunities available within your industry or geographical location, please contact our team of government funding experts by clicking here or calling us at 905-315-6847.

However, if your business is currently taking advantage of government incentives in Canada, there is a question that remains unanswered: is my business optimizing the benefits of this program? Our team of experts can help you answer that question by providing standards that are most typically observed in businesses of your size within your industry and geographical location. Please contact us here for further details or give us a call at 905-315-6847.

One last consideration to ensure the optimization of benefits is the type of corporation of your existing or future business in Canada. This can play a significant role in the ROI achieved by your company. For instance, Canadian Controlled Private Corporations (CCPCs) are entitled to a maximum of 42.3% return of eligible expenditures for research and development projects when applying to the SR&ED program (depending on taxable income and other variables), whereas the ROI for other types of corporations drops significantly to 17.98%.

Private investors and PE firms, as well as M&A companies, business associations, chambers of commerce or other entities providing investment advice to third parties, must be aware of all these benefits and of ways to optimize them.

Process Optimization & Continuous Improvement

At AMSaxum our team of experts also specialize in Lean Six Sigma. We provide onsite corporate training on lean six sigma/continuous improvement methodologies and help our clients with the implementation of process improvement projects. There are government grants available in Canada and the USA to help cover the cost of corporate training.

For more information, please call AMSaxum at 905-315-6847 or contact us here.

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