Competition for business grants can be fierce, but if you have a business dedicated to improving the lives of others and are committed to research, global initiatives or expanding job opportunities for new graduates, you may qualify for a grant from the Canadian government, your local province or territory, or other businesses and organizations. Grants for a small business startup are hard to win and many require you to use the funds for a specific purpose – but some are available to all business startups who meet the criteria for the grant in question. With so many grants out there, you can find your business the free money it needs to be successful.
Before applying for a grant, keep in mind that most startup grants are specific to a certain province or territory, so it’s best to search the Innovation Canada website to see what you’re eligible for since you’ll need to take your business goals, size, sector and location into consideration before applying for a grant.
Getting a startup grant during COVID-19
Many of Canada’s major startup grant programs are still up and running. However, startup businesses created before March, 2020, that are struggling due to COVID-19 might benefit more from local or more focused assistance programs. Visit our page on coronavirus grants for businesses to learn more about your options. If you’re thinking of starting a business and are short on funds, check out our guide on how to start a business with no money.
1. SD Tech Fund
Running a clean technology business? The SD Tech Fund caters toward businesses that are looking to support the green industry. Grants are offered to businesses working in the clean energy, air, water and climate change space. Offering a 33% contribution, the SD Tech Fund will continuously fund a project that has 4-6 milestones. Funding is continuous as each milestone is met.
Any projects that support the productivity and competitiveness of Canadian green industries will be considered for the grant. This grant is available Canada-wide.
2. SmartStart Seed Fund (Ontario only)
Offered by the Government of Canada, the SmartStart Seed grant provides funding up to $70,000 for startups. The only catch is you’ll need to be operating in the tech or innovation space in the province of Ontario. In addition, funding up to $7,500 is available for training and other professional support services.
To be eligible, you’ll need to meet the following requirements:
- Be a first-time applicant
- Be a Canadian citizen or a permanent resident
- Meet the age requirements
- Own an incorporated Ontario-based start-up
- Own your intellectual property
- Match the main funding at a rate of 1:1
- Obtain an endorsement
This grant is available to businesses located in Ontario only.
3. Industrial Research Assistance Program (IRAP)
One of the larger grants out there, the Industrial Research Assistance Program IRAP provides startups with funding between $50,000 to $500,000. Larger businesses tend to get more funding, however many small businesses are eligible for smaller grant amounts. IRAP supports the development and commercialization of technology-driven products, services or processes in Canada. Technology can be new or improved, giving a wider range of applicants the chance to receive grant funds.
This grant is available Canada-wide and in order to be eligible, you’ll need to have at least one full-time employee. The grant money will be issued before you incur the expenses, so if you’re thinking of applying, head online before you begin developing or advertising products or services.
4. Scientific Research and Experimental Development (SR&ED)
The SR&ED is not actually a startup grant, but rather a refundable tax credit. Claimed on your yearly taxes, this credit is geared toward startups and businesses conducting research and development toward products, services and processes.
This refundable tax credit is available to all businesses Canada-wide. While it depends on the type of business you’re running, you could be eligible for a 15% refund on any research and development taking place at your business.
5. Canada Job Grant (CJG)
The Canada Job Grant offers up to $10,000 toward training and developing your workforce. The funding can be used for a variety of purposes such as hiring and training programs that develop skillsets and enhance employee performance on the job.
Although this grant is available Canada-wide, it’s important to note that each province and territory usually has it own CJG program – with the exception of Quebec – which will likely dictate specific funding requirements and eligibility criteria. You will need to meet the eligibility requirements for the province or territory that your business is located in.
If you’re working in the export business, you could be in luck with the CanExport grant. If your business is operating in a market that represents less than 10% or $20,000 of international sales over the past 24 months, you may be eligible to apply for the grant. The CanExport grant helps to fund research and competitive analysis, product certifications, translations of marketing and packaging supplies and professional development and marketing tools such as attending conferences and trade shows.
The grant includes funding up to $50,000 or up to 50% of your project expenses. It is available Canada-wide. Providing funding for up to 1,000 business per year, you will need to meet specific criteria which includes employing 1-500 employees, running a small or medium sized business, have an annual revenue of at least $100,000 and have a $20,000 project on the table. While this grant may not be super helpful for some startups who are struggling to bring in income, it’s a good one to keep in mind should your business be successful in a niche industry.
7. Strategic Innovation Fund (SIF)
Provided by the Government of Canada, the SIF focuses on advancing innovation across a number of sectors in Canada. This fund looks to help businesses and startups simplify and accelerate processes and technology, as well as provide assistance that is focused on results.
The Strategic Innovation Fund is available Canada-wide and has four different “streams” focusing on a specific objective:
- Stream 1. Encourages research and development that focuses on accelerating the current and new production of technology transfer, as well as the commercialization of new products, services and processes.
- Stream 2. Focuses on facilitating the growth and expansion of businesses across the country.
- Stream 3. Aims to attract and retain large-scale investments into the country.
- Stream 4. Encourages the advancement of industrial research, development and technology through collaboration between the private sector, researchers and non-profit organizations.
The Strategic Innovation Fund (SIF) is available Canada-wide.
8. Proof of Concept Program by Natural Products Canada
If you’re a researcher or startup, you can get repayable financing for up to $250,000 to cover up to 50% of the costs to demonstrate the business viability of innovative natural products and technologies. The program does not support basic research or early product development. If you’re a startup company, Natural Products Canada’s contribution will be 50% non-repayable grant and 50% repayable loan.
To be eligible, you must have an innovative natural product or technology with the potential to achieve $10 million to $15 million in annual revenue within a reasonable time period. Applications are accepted on an ongoing basis.
The Lab2Market Program is a 16-week program to help researchers explore innovative ideas related to science or technology in order to find business value. The maximum grant amount is $15,000, and you will have access to mentors, advisors and workshops. Lab2Market encourages graduate students, PhD students or post-doctoral fellows to apply. If you do not fit any of these categories but still think you would be a great fit, you can reach out to Lab2Market through its contact page.
As of April 2021, Lab2Market is not accepting applications, but you can subscribe to their newsletter for updates on future programs.
Looking for a loan instead? Compare business loans for startups
Looking for a small business loan instead? To apply for a business loan, you’ll typically need to be in business for at least 100 days and meet a minimum monthly revenue requirement.
Dos and don’ts: How to get approved for a grant for a small business startup
- Tailor your application for a specific grant. Each has different eligibility criteria and is designed for a specific purpose. Your application needs to specifically address all of these.
- Address all eligibility criteria and answer every application question. Be succinct, yet thorough, and answer all questions. If you are unable to answer a question on the grant application, then you’re probably not ready. Get informed rather than guessing or leaving the section blank.
- Have a grant strategy. Plan ahead. Map out an application timeline, and systematically review each grant’s eligibility criteria and submission requirements.
- Consider specific projects instead of the business as a whole. Most grants are given to businesses that are engaging in specific activities like product development, importing/exporting and recruiting or training staff. If you can’t get grants for your business as a whole, consider grants for individual business projects or departments.
- Apply for grants you’re unlikely to get. A proper grant application takes time and effort, so you don’t want to waste your time on application that likely won’t get approved.
- Assume that a startup based on a good idea is good enough. Grants are awarded for fulfilling specific requirements and meeting certain business goals. “Having a good idea” isn’t enough to convince financiers that their money is safe with your company — you need real evidence that your business is solid and has a bright future.
- Fail to follow up. Think about the long-term success of your business, and follow up on grant applications even if you think your chances aren’t high. Find out which factors weren’t favourable, and find out where you can improve for next time.
Free money is out there to help your startup business navigate through those first few difficult years. While applying for startup grants can take valuable time, receiving a grant can make a difference in the day-to-day operations of your business — especially if you’re granted a large one or get access to free advertising.
If you’re unsure where to start or are wondering if your business is eligible, there are plenty of resources out there like Mentor Works that can help you get acquainted with different grants and guide you in the application process. You can also learn more in our guide on loans for startups.
Frequently asked questions about startup grants
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