Top government funding programs for Canadian manufacturers

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Manufacturers in Canada are eligible to apply for a wide range of grants and loans to offset the costs of strategic growth projects. In fact, manufacturers tend to have access to more government funding than any other industry, making them highly suited to access financial incentives.

Each provincial government offers additional funding programs for manufacturers, and the federal funding programs are available to all Canadian manufacturers.

Build a Plan Before Applying

Canadian manufacturers are a primary target for some of the most valuable government funding programs available. While it’s possible to access funding programs on a project-by-project basis, we recommend incorporating grants and loans as part of your overall growth strategy.

Government funding plans are a proactive means to offset a portion of all strategic project costs with manufacturing grants, loans, and tax credits.

Once your business has a timeline in mind, it becomes easier to align government funding programs, either independently or by using a government funding planner.

Top Canadian Manufacturing Grants, Loans, and Tax Credits

Provided through the Government of Canada, these manufacturing funding programs are available to manufacturers across the country. Discover how they can help your business grow and become more innovative.

Scientific Research and Experimental Development (SR&ED). Over 20,000 companies claim tax incentives under the SR&ED program each year, resulting in more than $3 billion in tax credits. The federal government awards more than $1 billion through this program, which is designed to encourage Canadian businesses to pursue research and development projects.

This program provides tax credits of up to 69 per cent of labour and overhead costs, up to 36 per cent of costs for contractors, and up to 45 per cent of material costs. The expenses must be commensurate with the needs of the scientific research and experimental development activity taking place within the company.

Industrial Research Assistance Program (IRAP). This program offers funding for technical or research-oriented projects to solve an internal innovation challenge. Funding supports software implementation, productivity improvements, and production design or marketing projects. Note that this program is not suited for training projects.

• Amount: Up to $10 million, non-repayable grant with 80 per cent of direct labour and 50 per cent of subcontractor expenses.
• Eligibility: Must have 1 to 500 people on payroll and be incorporated for two years with internal technical R&D expertise.

CanExport. This funding program provides support for export marketing and international expansion activities. It helps exporters improve their sales and brand exposure in international markets through trade shows and marketing activities, packaging modifications, and market research.

• Amount: Up to 50 per cent of project costs to a maximum of $50,000 in non-repayable funding per project. Up to two applications can be submitted per government fiscal year (April 1 to March 31).
• Eligibility: Must be a for-profit organization; earn annual revenues ranging from $100,000 to $100 million; maintain 1 to 500 full-time employees; be incorporated federally or classified as a limited liability partnership (LLP); create eligible project expenses of $20,000 or more; and be financially stable and able to pay all project expenses not covered by the program. Businesses in the agricultural or agri-food sector are now eligible for CanExport grants.

Canada Job Grant (CJG). This grant is a Canadian government funding program designed to reduce the costs of providing third-party skills training to new and existing employees. It’s available across Canada, with each province and territory responsible for co-branding and developing a system that’s suited towards its workforce and business makeup.

• Amount: Non-repayable grant contributions of 50 per cent to 100 per cent of training costs (i.e., course, exams, textbooks, software resources, etc.) to a maximum of $5,000 to $15,000 per trainee.
• Eligibility: Canadian small and medium-sized enterprises (SMEs) with $2 million liability insurance. Trainees must be permanent Canadian citizens or granted refugee status.

Innovative Solutions Canada (ISC). ISC provides government grants and procurement contracts to stimulate technology research, development, and commercialization. The program helps startups and SMEs overcome technology development hurdles so that they can produce globally demanded products and services while also improving government operations.

• Amount: Phase 1: Grants up to $150,000; Phase 2: Grants up to $1 million; Phase 3: Government procurement contracts with no fixed maximum.
• Eligibility: For-profit, privately held Canadian businesses with fewer than 499 full-time equivalent (FTEs).

NGen Manufacturing Supercluster Funding. This program supports collaborative technology development and application projects that help Canadian manufacturing companies compete globally.

• Amount: Offsets up to 44.4 per cent of eligible project expenses. Project costs should be between $1 million and $20 million, providing non-repayable funding of approximately $444,000 to $8.88 million.
• Eligibility: Open to all industries and sectors. Must have a minimum of three private-sector project partners; lead partner and participants must be NGen members.

Strategic Innovation Fund (SIF). SIF offers Canadian industrial and technology-based businesses financial support to fuel company expansion and R&D of products, processes, and services.

• Amount: A minimum funding contribution of $10 million per project. The type of financial support awarded is at the discretion of the program; this can comprise a combination of repayable financial support and/or financial reimbursements up to 50 per cent of project costs.
• Eligibility: Incorporated Canadian businesses with high growth potential and the ability to drive innovation.

Top Manufacturing Grants for Ontario-based Manufacturers

In addition to the Canadian manufacturing grants and loans listed previously, Ontario-based manufacturers also may qualify for the following provincially funded or targeted incentives.

FedDev Ontario Business Scale-up and Productivity (BSP) Program. BSP accelerates company growth and helps businesses adopt and adapt innovative technologies that support productivity. Funding supports early adoption or adaptation of innovative technologies and processes, commercializing and producing new products or processes, expanding management capacity, and researching and developing export markets.

• Amount: This is a repayable contribution (no-interest loan) of up to 35 per cent of eligible project expenses to a maximum of $10 million. The minimum ask is $500,000.
• Eligibility: Southern Ontario businesses that have been incorporated and profitable for three or more years and have five or more employees. Pre-revenue companies and those with fewer than five employees require proof of scale-up potential.

Eastern Ontario Development Fund (EODF). This fund provides financial support to Canadian SMEs that are expanding operations and creating jobs in eastern Ontario. Funding is suited to accommodate projects that will involve investing in new capital equipment, improving existing operations and processes, and pursuing new market opportunities.

• Amount: Up to 15 per cent of eligible expenses to a maximum $1.5 million in non-repayable grant funding for projects with budgets up to $10 million. Projects with budgets that exceed this amount may be eligible to receive a combination of grants and loans of up to $5 million.
• Eligibility: Applicants must be incorporated for at least three years, have 10 or more full-time employees, and operate in eastern Ontario. Projects must create at least 10 new full-time positions.

Southwestern Ontario Development Fund (SWODF). This program offers funding to support projects that involve investing in new capital equipment, developing skills, enhancing productivity, and developing new infrastructure.

• Amount: Up to 15 per cent of eligible expenses to a maximum $1.5 million in non-repayable grant funding for projects with budgets up to $10 million. Projects with budgets that exceed this amount may be eligible to receive a combination of grants and loans of up to $5 million.
• Eligibility: Applicants must be established for at least three years, have 10 or more full-time employees, and operate in southwestern Ontario. Projects must be completed within a two to four-year timeline and create at least 10 to 15 new full-time positions depending upon project size and company size.

Apply for Manufacturing Grants, Loans, and Tax Credits

The programs listed are just some of the many grants, loans, and tax credit programs available to Canadian manufacturers. Identifying government funding programs is just one stage of the funding process, however.

With this information, your business must align applicable projects and strategic spends, then craft and submit a detailed application that outlines your opportunity.

Matthew Mongeon is marketing specialist at Mentor Works, a Ryan Company, 28 Bett Court, Unit B, Guelph, Ont. N1C 0A5, 888-599-3111, www.mentorworks.ca.