STEP 1.2.3

Budget and financing
Introduction to Exporting from Canada

Export Capital

Does your business have the capital to expand internationally? If not, how easily can you get it?

While traditional banks are an obvious place to start for loans and financing, financing projects in foreign countries is often seen as too risky by these institutions.

Export- and small business-focused financial and advisory organizations generally have a bigger risk appetite when it comes to investing in foreign activities—Export Development Canada (EDC), the Business Development Bank of Canada and the Canadian Trade Commissioner Service (TCS) in particular can offer financial support.

EDC offers direct loans to small businesses, along with a variety of other financing options:

  • Capital financing allows EDC to share the risk of financing with your bank.
  • CIA financing allows EDC to invest in new offices, factories or joint ventures set up in foreign countries by Canadian businesses.
  • Project financing allows EDC to bankroll companies who want to take part in large multi-organizational projects and bid on big ticket initiatives, such as government procurement programs.
  • Buyer financing provides loans to your customers, so that they can pay you what they owe you. The customers then owe EDC for the purchase amount.
  • EDC also offers a wide array of financing options for foreign customers, incentivizing them to buy from Canadian companies.

The Can Export Program, run by TCS, offers grants to SMEs registered in Canada for a range of exporting activities, especially those companies interested in high-growth emerging markets:

  • This program reimburses up to 50 per cent of eligible expenses and requires that applicants match funds on a one-to-one basis.
  • The minimum matching contribution is $10,000, and the maximum is $99,999—the total cost of activities must be double the amount offered.
  • With a few exceptions, this program is open to all industry sectors—agricultural and food and beverage producers are excluded from CanExport because they are eligible for the AgriMarketing support program.
  • Duane McMullen, Director General of TCS, says CanExport can cover things like the cost of an interpreter or translation of materials, a booth at a trade show, local advertising or a plane ticket:

“Can Export has been a very popular program. It’s a great way to reduce the risks of going into a new market. We take great pride in making that a really streamlined and quick application process. So companies can get a response really quickly, about whether or not their application is successful. And even if it’s not successfully initially, we can tell them why and what we might need to do to make the application successful.” – Duane McMullen, Director General of Trade Operations at Global Affairs Canada

The Business Development Bank of Canada offers financing from $250,000 to $35 million for a wide breadth of business needs:

  • Mezzanine financing: You can structure the loan according to your cash inflow to protect working capital. This can bridge the gap between senior debt and equity financing.
  • Cash flow financing: If your company has a track record of strong cash-flow and you want to plan large-scale growth projects. These loans raise capital with stable terms.
  • Quasi-equity financing: A good option if you run a business that has not reached positive cash flow, this allows you to raise capital to keep cash in your business for daily operations.

Government Grants and Tax Incentives

Funding Databases and Advisory Services

Canada Business Network- Canada Business Ontario

As a part of the Canada Business Network, Canada Business Ontario provides SMEs with market research, exporting assistance, and information on financing and government grant opportunities.

Government of Canada – Concierge

A federal government database that directs companies towards funding and business growth assistance services.

Ontario Ministry of Economic Development and Growth – Business Advisory Services

This service provides consulting services to SMEs on business planning, retention, expansion, financial assistance, exporting and other facets of operations.

Export Market Access

Offered through FedDev Ontario and the Ontario Chamber of Commerce, Export Market Access helps SMEs enter new markets such as China and Hong Kong, India and the United States.

Funding goes towards marketing expenses: trade shows, marketing tools, market research, international project bids.

The program provides up to 50 per cent of project expenses.

Technology Commercialization Organizations

Ontario Centres of Excellence

Ontario Centres of Excellence is a research-to-commercialization organization that works with Ontario colleges and universities.

The organization offers a variety of programs.

Ontario Regional Innovation Centres

Part of the Ontario Network of Entrepreneurs (ONE), which helps entrepreneurs accelerate and/or commercialize their technology.


An organization that builds partnerships between academia and business to create innovative products.

Technology Grants and Tax Credits

Government of Canada – Scientific Research and Experimental Development Tax Incentive Program

This program, commonly called “Shred”, provides tax credits or refunds for research and development activities. Firms can claim 15-35 per cent of eligible expenditures.

Ontario Ministry of Finance – Ontario Innovation Tax Credit

Qualifying businesses can claim an 8 per cent refundable tax credit for qualified expenditures on scientific research and experimental development performed in Ontario.

Ontario Ministry of Finance – Ontario Business Research Institute Tax Credit

Eligible corporations can claim a 20 per cent refundable tax credit for qualified expenditures on scientific research and experimental development work performed in Ontario under contract with eligible research institutes.

National Research Council Canada – Industrial Research Assistance Program (IRAP)

IRAP assists firms to develop, adopt and adapt technologies and incorporate them into competitive products and services to be commercialized in the global marketplace; through advisory services, funding, networking and linkages, and Youth Employment Programs.

80 per cent funding for research and development (workforce), 50 per cent (for consulting).

Natural Sciences and Engineering Research Council of Canada – ENGAGE Grant

The grant supports short term R&D projects to solve a problem specific to the company. The company and the researcher must not have worked together before. Project funding, up to a maximum of $25,000, is paid to the researchers for the six month duration of the project. The partnering company must be involved in the project and provide in-kind support. Any IP developed during the project belongs to the company.

Government of Canada – Build in Canada Innovation Program

This federal program purchases and tests products and services before taking them to the marketplace (up to $500,000/up to $1,000,000 for military technologies). The government sells your products, but you maintain control of your IP. Geared towards environment, safety and security, health, and enabling technologies.

Government of Canada – Technology Demonstration Program (TDP)

Run through the Industrial Technologies Office, projects funded through this program are expected to be the basis for the next generation of manufacturing, technical capabilities and services in Canada, and to generate material economic benefits for Canada in the longer term.

Non-repayable contributions are available supporting 50 per cent of total eligible project costs, up to a maximum of $54 million per project.

Aerospace Grants

Government of Canada – Strategic Aerospace and Defence Initiative (SADI)

Run through the Industrial Technologies Office, this program provides aerospace and defence industries with repayable contributions for strategic R & D projects: covers up to 40 per cent of project’s total eligible costs, no minimum or maximum level of funding, nor a maximum limit on how much a company can apply to receive through SADI.

Canadian Space Agency – Space Technology Development Program (STDP)

STDP is responsible for developing space technologies required to support future Canadian space missions, and strengthening the Canadian space sector through industrial capacity building efforts.

For the contracting component of the program, STDP is responsible for providing financial and technical support to Canadian organizations (Industry, Academia, and Not-For-Profit) to perform R&D related to Mission Enabling and Generic Space Technologies.

Startup Funding

FedDev Ontario – Investing in Business Innovation

This program provides funding to bridge private sector investment in start-up businesses (under 50 employees). Firms require angel or venture capital funding for two thirds of the project; support is available for the remaining one third of project costs as a loan (up to $1 million).

Futurpreneur Canada

Loans of $15,000 are available to start business for individuals age 18 to 39. Those who qualify can also apply for an additional $30,000.

Agriculture Funding

Agriculture and Agri-Food Canada – Growing Forward 2

Growing Forward 2 (GF2) aims to grow profits, expand markets and manage risk in the agri-food industry to both start-up and established businesses.

Agriculture and Agri-Food Canada – Agri-Innovation Program

The Agri-Innovation Program makes two types of investments: those targeted at research and development activities that bring innovation to the sector; and those that help industry bring the results of research and development to market through adoption/commercialization. This is a five-year program ending on March 31, 2018.

There are two streams of funding available:

  1. Industry-led Research and Development Stream supports projects that result in an innovative practice, process or product.
  2. Enabling Commercialization and Adoption Stream supports projects that prepare for the commercialization of an innovative technology, process or product through commercial demonstration, commercialization or adoption.

Energy Efficiency Incentives and Cleantech Funding

IESO – Conservation Fund

A grant fund to promote development and commercialization of technologies to improve electrical conservation. Funds for all project categories are up to 75 per cent (max $500k), apart from the Strategic Opportunities Stream, which is 50 per cent (for a max of $1 million).

Natural Resources Canada -Process Integration Approach

This program helps manufacturers improve the energy efficiency of their operations.

Sustainable Development Technology Canada – SD Tech Fund

Grant funding to support late stage development and pre-commercial demonstration of clean technology solutions to issues of climate change: clear air, water, soil.

Ontario Ministry of Economic Development and Growth – CME Smart Green Program

This program supports manufacturers across Ontario with matching grants (50:50) up to $200,000 for capital investment projects that reduce emissions, implement energy efficient technologies and best practices through process and/or product improvement.

Automotive Manufacturing Funding

Automotive Parts’ Manufacturers Association – The Automotive Supplier Competitiveness Improvement Program (ASCIP)

Small and medium-sized automotive suppliers, or large companies partnering with small or medium-sized automotive suppliers, can apply for to up to $100,000 in project funding, which must be matched 1:1 by industry funds and contribute to the adoption of industry-leading processes and IT solutions that result in gains in efficiency measures. Projects can be up to two years in duration.

Rural Business Funding

FedDev Ontario – Community Futures Program

This program provides loans for businesses in rural communities: up to $250,000 for equipment, inventory and working capital.


Ontario Ministry of Finance – Co-operative Education Tax Credit

A refundable tax credit for businesses that employ post-secondary students enrolled in a qualifying program. The maximum credit is $3,000 per placement.

Service Canada – Career Focus Program

Funding for employers to offer post-secondary graduates opportunities to obtain career-related work experience.

Service Canada – Employment Insurance Work-Sharing Program

Work-Sharing is an adjustment program designed to help employers and workers avoid temporary layoffs when there is a reduction in the normal level of business activity. Work-Sharing Agreements must be agreed upon by both employee and employer representatives, and approved by Service Canada.

Service Canada – Canada Summer Jobs

This program helps small business (less than 50 employees) to create jobs for students during the summer months. The application period is in January.

Ontario Ministry of Advanced Education and Skill Development – Summer Jobs Service Program

A $2-per-hour-per-student hiring incentive is available for eligible Ontario employers to create summer job placements for students between age 15 to 30 who are returning to school.

Service Canada – Skills Link Program

This program connects young people facing barriers with employers.

Ontario Ministry of Advanced Education & Skills Development – Employment Ontario: Employment Services Network

This service connects prospective employees and employers.

Employee Training Funding

Ministry of Advanced Education & Skills Development – Canada Ontario Jobs Grant

This program funds employee training, up to $10,000 per employee. Employers are required to contribute one-third of total costs.

FedDev Ontario/Yves Landry Foundation – Achieving Innovation and Manufacturing Excellence

This program offers employee training support for manufacturing SMEs, contributing up to 50 percent of eligible project costs to a maximum of $50,000 per business. Previous recipients are eligible for up to 25 per cent of project costs.

Ontario Ministry of Advanced Education & Skills Development – Apprenticeship Training Tax Credit

The apprenticeship training tax credit is a refundable tax credit, available for employers who hire and train skilled trade apprentices. The tax credit is based on the salary of the apprentice, and eligible businesses can claim 25 to 30 per cent of expenditures, or up to $5,000 per years for three years.

Ontario Government – Apprenticeship Completion Bonus

The Apprenticeship Completion Bonus is a taxable grant of $1000 to employers or sponsors whose apprentices complete an apprenticeship program in any trade.

Job Creation Tax Credits

Canada Revenue Agency – Apprenticeship Job Creation Tax Credit

This federal program provides eligible employers with a non-refundable tax credit equal to 10 per cent of apprentice salaries. The maximum credit an employer can claim is $2000 per year for each apprentice.

Ontario Ministry of Economic Development and Growth – South Western Ontario Development Fund

This program provides up to 15 per cent in grants for job creation and investment: $500,000 per 10 jobs created.

Product Commercialization Funding

FedDev Ontario – Southern Ontario Fund for Investment in Innovation

This program provides loans of $150,000 to $500,000 to support growth activities: late stage commercialization; new product or service development; new applications or market development, implementation of new processes or technologies.

Government of Canada – Canada Small Business Financing Program

This program provides loans from any chartered bank for companies with less than $10 million in revenues for capital acquisition: up to $350,000 available, $1 million available for real estate.

FedDev Ontario – Investing in Business Growth and Productivity

This program assists existing southern Ontario businesses to adopt new technologies that have the potential to improve productivity and expand their operations: 25 per cent repayable contribution, 0 per cent interest, flexible repayment terms.

Ontario Ministry of Economic Development and Growth – Jobs and Prosperity Fund

3 streams: New Economy Stream, Food and Beverage Growth Fund and Strategic Partnerships Stream.

The minimum project size is $5 million for Food and Beverage Growth, $10 million for New Economy Stream and Strategic Partnership Stream.


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