Top Government Funding Programs for Canadian Manufacturers
The Canadian government offers a variety of grants and loans to assist manufacturers with strategic growth projects. As a result of greater access to government financing than any other industry, manufacturers tend to be ideal candidates for financial incentives. Additional funding programs are available from each province, and federal funding programs are available to all manufacturers in Canada. As a result of the ongoing COVID-19 pandemic, a few of the programs listed here have temporary changes.
Manufacturing grants, loans, and tax credits can support technology adoption, facility and export expansion, research and development, and hiring and training projects.
Identifying and securing manufacturing grants and loans that can help to fund your business’ upcoming projects is the first step to developing and implementing a strategic government funding plan. Mentor Works is a great partner for companies interested in identifying funding programs for which to apply. Our pool of resources can help you find funding programs that are worth applying to. Our team of Canadian government grant and loan consultants and application writers can support this matchmaking process; just contact us to start a conversation about accessing funding for your upcoming growth projects.
Before You Access Government Funding for Manufacturers: Build a Plan
Several of the most valuable government funding programs are geared toward supporting Canadian manufacturers. Although funding programs are available on a project-by-project basis, we recommend including 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.
Identify all investments the company will make in the coming 12-24 months as the first step. This roadmap can be used either independently or in conjunction with a Canadian Government Funding Planner to align government funding programs.
Please note: Agri-food manufacturers will find more applicable funding programs from the Top 4 Funding Programs for Ontario’s Agri-Food Industry.
Top Canadian Manufacturing Grants, Loans, and Tax Credits
Manufacturers across Canada can be eligible for manufacturing funding programs offered by the Government of Canada. Find out how these programs can help you become more innovative:
Scientific Research and Experimental Development (SR&ED)
The SR&ED program provides tax incentives to more than 20,000 companies each year, resulting in more than $3 billion in tax credits. This program is helps Canadian businesses to take on research and development projects.
SR&ED provides tax credits of up to 69% of labour and overhead costs, up to 36% of costs for contractors, and up to 45% of material costs. Any costs must be commensurate with the needs of the SR&ED activity. Learn more about the eligibility criteria for SR&ED projects.
Learn more about the Scientific Research and Experimental Development (SR&ED) program and how your business may be eligible to receive tax credits through this program.
Industrial Research Assistance Program (IRAP)
IRAP offers funding for technical or research-oriented initiatives to solve internal innovation challenges. Funding may help with software implementation, productivity improvements, and production design or marketing projects. However, this program is not suitable for training projects.
- Amount: Up to $10M, non-repayable grant with 80% of direct labour and 50% of sub-contractor expenses.
Eligibility: 1–500 people on payroll; 2 years incorporated with internal technical R&D expertise.
Learn more about the Industrial Research Assistance Program (IRAP) program.
CanExport
CanExport supports international expansion and export marketing. Exporters can take advantage of the program’s trade shows and marketing activities, packaging modifications, and market research to improve their sales and brand exposure in international markets.
- Amount: Up to 50% 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:
- Be a for-profit business;
- Annual revenues from $100,000 to $100,000,000;
- Maintain 1 to 500 full-time employees;
- Is incorporated federally or classified as a LLP;
- Create eligible project costs of $20,000 or more; and
- Is financially stable and able to pay all project costs not covered by the program. Businesses in the agricultural or agri-food sector are NOW eligible for CanExport grants.
Learn more about the CanExport funding program.
Canada Job Grant (CJG)
In 2014, the Canadian government announced a funding program called the Canada Job Grant that will reduce costs associated with providing new and existing employees with third-party skills training. CJG is applicable across Canada, but each province and territory is responsible for co-branding and tailoring the program to the needs of its workforce and business structure.
- Amount: Non-repayable grants of 50%–100% of training expenses to a maximum of $5,000 to $15,000 per trainee.
- Eligibility: Canadian SMEs with $2 million liability insurance. Trainees must be permanent Canadian citizens.
Learn more about the Canada Job Grant (CJG) program and each of its provincial variants.
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Innovative Solutions Canada (ISC)
Research, development, and commercialization of new technologies are facilitated through government grants and contracts from ISC. The program helps start-ups and SMEs solve tech 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 FTEs.
Learn more about the Innovative Solutions Canada (ISC) program.
Innovation for Defence Excellence and Security (IDEaS)
IDEaS, a federal government procurement program, is allotted via the Department of National Defence (DND), and seeks pre-commercial military and defence technology projects that may address Canadian Armed Forces challenges.
- Amount: Varies according to challenge, applicants may earn up to $20 million per project.
- Eligibility: All organizations are eligible to apply. Though, applicants must demonstrate at least 50% Canadian content for goods and services.
Learn more about the Innovation for Defence Excellence and Security (IDEaS) program.
NGen Manufacturing Supercluster Funding
The NGen Manufacturing initiative helps with collaborative tech development and application projects to allow Canadian manufacturing companies to compete globally.
- Amount: Assists with up to 44.4% of eligible project costs. Project costs should be between $1M and $20M, providing non-repayable funding of approximately $444,000 to $8,880,000.
- 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.
Learn more about the NGen Manufacturing Supercluster Funding program.
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: Minimum contribution of $10 million in funding per project.
- Eligibility: Incorporated Canadian businesses that have potential to drive innovation.
Learn more about the Strategic Innovation Fund (SIF) program.
Top Manufacturing Grants Ontario
Moreover, here is a list of the top Ontario-specific funding programs for manufacturing:
Ontario Automotive Modernization Program (O-AMP)
O-AMP helps manufacturers improve productivity with tech adoption projects. It integrates innovative equipment that reduces costs and expands manufacturing capabilities.
- Amount: Up to 50% of eligible project costs to a maximum $100,000 in Ontario government grants (cost-sharing contributions).
- Eligibility: Ontario automotive businesses with fewer than 500 employees. At least 50% of revenue must come from the automotive supply sector.
Learn more about the Ontario Automotive Modernization Program (O-AMP) program.
Business Scale-up and Productivity Program (BSP) Southern Ontario
BSP funding supports early adoption and adaptation of new technologies and systems, commercializing new products or processes, and researching/developing export markets.
- Amount: Repayable contribution (no-interest loan) of up to 35% of eligible project expenses to a maximum $10 million. Minimum ask of $500,000.
- Eligibility: Southern Ontario businesses, incorporated and profitable for three or more years with more than five employees..
Learn more about the Business Scale-up and Productivity Program (BSP) Southern Ontario program.
Eastern Ontario Development Fund (EODF)
EODF offers financial support to Canadian SMEs that are growing operations and creating jobs in Eastern Ontario. Funding geared towards investing in new capital equipment, improving operations and processes, and pursuing new market opportunities.
- Amount: Up to 15% of eligible expenses to a maximum $1.5 million in non-repayable grant funding for projects with budgets up to $10 million.
- Eligibility: Applicants must be incorporated for at least three years, have 10 or more full-time employees, and operate in Eastern Ontario. Projects have to make at least 10 new full-time positions.
Learn more about the Eastern Ontario Development Fund (EODF) program.
Southwestern Ontario Development Fund (SWODF)
SWODF supports projects which invest in new capital equipment, develop skills, enhance productivity, and develop new infrastructure.
- Amount: Up to 15% 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 10–15 new full-time positions depending upon project size and company size.
Learn more about the Southwestern Ontario Development Fund (SWODF) program.
Apply for Manufacturing Grants, Loans, and Tax Credits
These programs outline only some of the best grants, loans, and tax credit programs available to Canadian manufacturers. With this information, your business can align projects and strategic spends, to craft and submit a detailed application that reviews your opportunity.
You’re not alone in the process. Mentor Works can help you optimize the entire funding application process; download our free slide deck to learn more about your options or contact our team to get started on applying for these programs.
Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.
Author: Nathan Chick
