Financial Support and Grants for Small Businesses in Canada

Paul Sharpe, CPA, CA
September 30, 2018

Affiliate disclosure

There are many government grants and other sources of funding and financial support for small businesses.  It may be a simplistic view, but I like to think of all of these as free money for businesses. This article will describe a few of our favourite free money options.

Financial Support for Small Businesses

Running a business can be tough, but luckily there are programs that provide financial support to help ease the burden. There are many terms that basically mean the same thing: grants, tax credits, non-repayable or forgivable loans, awards, contributions, subsidies, and rebates. It may be a simplistic view, but I like to think of all of these as free money for businesses. This article will describe a few of our favourite free money options.

Get Youth Working! Program

The Get Youth Working! program is one that we have used successfully at Avalon to hire young talent. The program offers employers a $2,800 hiring incentive (up to 3 employees at $2,800 each) to hire workers aged 15 to 29 years of age. There is also an option to request up to $1,000 to help train newly hired youth workers.

To be eligible:

  • The business and employee must be located in British Columbia
  • Employers must be in business for a minimum of 1 year
  • Employers must be in good standing with WorkSafe BC
  • The new hire(s) must be employed for a minimum of 3 months and 30 hours per week
  • Application for the program must be approved before the new hire starts work

The program runs at various times throughout the year, so check out the Get Youth Working! website or call 1-877-866-3100 to find out more.

NRC IRAP Youth Employment Programs

The National Resource Council Industrial Research Assistance Program (NRC IRAP) aims to help young Canadians develop skills and find employment. There are two programs currently available: the Youth Employment Program (YEP) and the Youth-Green (YG) program. Both programs provide financial assistance to small and medium-sized businesses (up to $30,000) when hiring young talent. Financial contributions go towards supporting a portion of salary costs.

Eligible businesses must:

  • Be incorporated and for-profit
  • Have 500 or less full-time equivalent employees
  • The nature of the business aligns with green economy sectors or industries or expects to produce an environmental benefit (YG program only)

Eligible employees must:

  • Be between 15-30 years of age (inclusive)
  • A Canadian Citizen, permanent resident of Canada or person granted refugee status
  • Legally entitled to work in the province
  • Not have participated in the program previously
  • A post-secondary graduate (YEP program only)

The type of work that the employee is doing must meet some requirements, but there is a large range of activities that qualify. See the NRC IRAP website for more details or call 1-877-994-4727 to speak with an IRAP advisor and apply.

Startup Canada - Women Founders Fund

Startup Canada is investing in women-led businesses within STEM industries (science, technology, engineering and math). This grant provides between $1,000 and $5,000 in funding to support business operations and business growth opportunities.

Eligibility requirements are:

  • Applicants must be women entrepreneurs or women-led businesses
  • Applicants must be in the STEM field
  • Applicants must be based in Canada
  • The funds must be used to support business operations or access to business or professional growth opportunities

The program runs at various times throughout the year and there are application deadlines, so check out the Women Founders Fund website to find out when the next application deadline is.

Scientific Research and Experimental Development (SRED) Tax Credits

SRED is a refundable tax credit that provides a cash refund on eligible research and development expenditures. The benefit can be quite sizeable, especially for Canadian Controlled Private Corporations (CCPCs) which can receive up to 35% on the first $3 million of eligible expenditures and then 15% of eligible expenditures exceeding $3 million.

It is often believed that SRED credits are only for tech companies, but that is certainly not the case. We’ve written a more detailed article on eligibility and how to claim SRED credits, but the general idea is that the business must be able to answer yes to all of the following questions to be eligible:

  • Were you required to perform research and development to advance the current state of technology?
  • Did the effort involve formulating a hypothesis specifically aimed at reducing or eliminating the uncertainty?
  • Was the scientific method used during research and development (formulating, testing, and modifying the hypothesis)?
  • Did the process result in a scientific or technological advancement?
  • Were records of the hypothesis and results kept as the work progressed?

If the answer is yes to all of these questions, then you may be able to receive a potentially significant financial benefit by claiming SRED credits. Check out our article linked above and the Government of Canada SRED website for more info.

Innovate BC - Tech Co-op Grants Program

The BC Tech Co-op Grants program exists to support talent in BC’s technology sector. The program offers up to $10,800 in grants when hiring co-op students in technology roles.

Eligible employers must:

  • Be established in BC
  • Have less than 100 employees on payroll
  • Be either a tech business hiring for any role or a non-tech organization hiring for a tech role (a role primarily related to developing tech or providing tech support)
  • Be hiring a student for a co-op work term.

There is a simple application process that can be found on the Innovate BC website.

British Columbia Interactive Digital Media Tax Credit

The interactive digital media tax credit (IDMTC) is for eligible registered corporations that develop interactive digital media products in BC (e.g. video games, educational software, edutainment products, simulators etc.). The credit equates to 17.5% of eligible wages incurred in the tax year.

To be eligible companies must:

  • Be established in BC
  • Be registered for the tax credit with the Ministry of Finance
  • Develop interactive digital media product(s) in BC after August 31, 2010 and before September 1, 2023

More info on what constitutes interactive digital media products and how to apply can be found on the Ministry of Finance’s IDMT page.

Other Resources

There are a large number of other opportunities to receive financial and other types of support for your business in Canada. A few useful resources to find these include:

If you’re not sure where to start or where your business might fit into these programs, send us a message and we can help point you in the right direction.

Work With Avalon

Our goal is to help small businesses thrive, and we want to help as many businesses as we can.

Here are a few ways that we can help ⬇️

🤝Hire Avalon
We offer full-service bookkeeping and accounting services for small businesses in Canada.

We start by helping incorporated businesses navigate the maze that is tax compliance in Canada. We provide clarity on your business' financial performance so you can make informed decisions with the guidance of our expert team.

If you're interested in hiring Avalon, check out our Services Page or get an idea of the Service Packages that we offer.

🏫Learn New Skills
For those wanting to learn the skills needed take on your own bookkeeping and accounting, we offer online courses.

We've taken our years of experience working with hundreds of small business owners and distilled them down into practical online lessons.

Check out our Business Courses page to take your skills to the next level.

📖Share Our Knowledge
We know that being a small business owner is challenging.  There are so many hurdles to overcome and questions to answer when running a business.

We aim to help as many business owners as possible to overcome those hurdles and answer those questions by sharing our knowledge.

Check out our Blog, YouTube Channel and Downloadable Guides that have helped thousands of people get answers to their questions.  

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Thanks for reading!
Article by
Paul Sharpe, CPA, CA
Originally published
September 30, 2018
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