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Canada, through its federal and provincial or territorial governments, offers small business grants designed to assist entrepreneurs in starting, growing, and sustaining their businesses.
As of writing, the Canadian government offers around 1,570 programs and services aimed at addressing different business needs of multiple industries.
Whether it’s to fund an upcoming expansion, raise capital, or hire new staff, grants provide necessary support for your business. On this page, you’ll discover everything you need to know about small business grants in Canada and where to find them.
A Canadian small business grant is an award given out by the government or other funding entities to eligible small businesses to help facilitate a specific goal or incentivize a performance. These grants target specific business needs like expansion, capital investment, research and development, wage subsidies, training, and more.
For businesses that want to undertake new projects, grant funding is a great source of capital.
Government grants focus on stimulating the economy. So, most of the time, small business grants come with specific eligibility requirements, cater to specific industries, and apply to specific projects.
However, being eligible for a grant does not mean being automatically entitled to it. This causes the application process to be extremely competitive.
For a lot of businesses, the strict requirements and competitive application process translate to additional administrative burdens. Thus, it is important to know and understand the entirety of the grant before deciding to apply for funding.
Keep in mind that while most online resources also refer to grants as “free money,” it largely depends on what kind of grant you’re applying for.
As mentioned above, it depends.
There are two main types of small business grants: repayable and non-repayable grants.
Repayable grants involve interest-free contributions that are to be spent and paid back in full, as outlined in your grant agreement, regardless of project outcomes. Like all small business grants, its use may be subject to some conditions, and it may limit what aspect of your business you can utilize it for.
Non-repayable grants, on the other hand, typically involve interest-free contributions that are to be spent as outlined in your agreement. These grants do not have to be paid back as long as the conditions are met, unlike repayable grants. In other words, non-repayable small business grants don’t have to be repaid unless there’s changes on your eligibility.
Here’s the good news — small business grants in Canada are usually non-repayable. However, to determine what type you’re applying for, we always recommend going through the program guides.
Yes, grants count as taxable income. If you get a small business grant from the Canadian government, you will have to report it as income or as a reduction of an expense. However, you may be able to deduct expenses related to your use of the small business grant, which may, in turn, offset the tax liability.
There are several small business funding available in Canada yearly. The most viable ones for small businesses revolve around grants, loans, tax credits, and wage subsidies.
As already established, grants are financial awards given to fund some type of business project. It aims to boost the economy, give critical recovery support to businesses, stimulate research and development, and more.
A loan is money borrowed from a bank or a financial institution. For businesses, this may be offered to fund operations. It covers expenses like salaries, rent, purchasing equipment, or expansion. Loans are always repayable – typically with interest, unlike grants.
Tax credits are amounts you can subtract or get refunded for, from the income tax you owe or have paid for. In other words, tax credit may reduce the amount of tax you owe and could even help you qualify for a tax refund. There are a variety of tax credits provided by the federal, provincial, and territorial governments in Canada.
A wage subsidy is a financial support given by the government to eligible small businesses to help them cover employee wages. In Canada, wage subsidies can be used to reduce the cost of hiring and training a new employee, cover a portion of employee wages, fill vacant positions, provide disability support to injured workers, and more.
The type of funding you should look into depends on what your business currently needs. If you need additional capital or funding for expansions, acquisitions, or projects, grants or loans are the way to go. On the other hand, if you’re looking to hire additional staff or conduct training, wage subsidies are the type of program you should look into. Lastly, if you’re looking for a way to decrease your tax liability, tax credits might be the right choice.
Aside from programs available across all of Canada, provinces also have government funding programs that are exclusively available only to businesses operating within the province. These government grants usually align with the type of industries that are common in a specific province.
Ontario has a highly diversified economy. Its common industries range from manufacturing, agriculture, technology, real estate, and finance. The top small business funding in Ontario includes the Canada-Ontario Job Grant, Southwestern Ontario Development Fund (SWODF), Eastern Ontario Development Fund (EODF), Starter Company Plus, and more.
Service-based industries are known to dominate the economy in British Columbia. However, resource-based industries like forestry, agriculture, natural gas, and mining play a significant role in the province’s economic landscape. The top small business funding in BC is designed to support these industries and other emerging sectors. Notable programs include the Northern Industries Innovation Fund, PacifiCan Regional Economic Growth through Innovation, and more.
Similarly, Alberta’s economy is driven by oil & gas, mining, manufacturing, agriculture, and forestry industries. To support these vital sectors, Alberta provides multiple small business funding programs like the Alberta Innovates, Alberta Export Expansion Program, and more.
Atlantic Canada is composed of four provinces: New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The primary industries in these provinces include natural resources like fishing, forestry, oil, mining, and hydroelectricity. Other industries like manufacturing and transportation are also top contributors. Discover the top small business funding programs in Atlantic Canada like Future Farmer Program, Atlantic Canada Opportunities Agency Regional Economic Growth through Innovation, Impact Your Business, and more, through this page.
Aside from province-exclusive funding programs, Canada also provides small business grants for specific industries. These grants are often for emerging sectors that need a boost to effectively compete in the market and ultimately drive innovation and economic progress.
Some of the industries with a lot of dedicated grants include:
With the growth of women business ownership in Canada, there is also an increase in available grants for self-identifying women entrepreneurs across the country. Designed to support women-owned businesses across multiple industries, these grants, wage subsidy programs, and loans can be a good resource for women looking to start, grow, or expand their business.
Some of the grants under this category include:
Applying for grants can be intimidating. Most of the resources you find online are tailored for non-profit applications. However, with small business grants in Canada, the approach might be a bit different.
A small business grant’s eligibility criteria are always your first hurdle. Before anything else, it is important that you are able to identify if you are suitable to apply for a grant.
Small business grants in Canada typically have their own eligibility criteria. However, we’ve noticed some similarities across some programs. We listed out some common eligibility requirements – let’s see if you fit!
It is important to note, however, that some variation may be present depending on what the funding is for. That’s why we generally recommend going over the program guidelines carefully so you will know what to expect.
The grant writing process involves four key steps:
Once you’re able to go through all of these steps, you’re ready to apply for that small business grant!
The easiest way to find the right small business grants in Canada for your business is to check out grant databases. However, navigating through extensive databases might not be the best idea when you’re busy running your business.
Here at GrantFundPro, we take care of all the hard work for you. Our grant search platform is designed to give tailored recommendations based on your profile, making it easier than ever to find grants that match your needs. Learn more.
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