A guide to grants for small business owners

Navigating the early stages of starting a business as a Canadian business owner can be challenging. One of the first steps in your financial plan should be applying for federal and provincial grants. Yearly, small- to medium-sized enterprises (SMEs) play key roles in the growth of Canada’s gross domestic product (GDP) and employment rates. As necessary assets for the country’s economy, the government has continued to invest billions of dollars into grants. These can help you to begin or expand your business.

In 2021, the government released the Canadian Key small business statistics.  It reported that small businesses alone contributed to the GDP by 37.5 per cent by the private sector. Medium businesses contributed by 14.4 per cent. In 2020, small businesses employed more than seven million workers in the private sector. As for medium businesses, they employed more than two million. 

Online, you can find grants available to fund all types of businesses. The Ontario website has made this easy by creating a list, search engine and guide to support your needs.

Depending on the scale of your business, you may be eligible for up to $1,000 in grants for personal protection equipment to as much as $5 million if you are operating an innovation project to develop your rural community in Southern Ontario.

It can be overwhelming if you don’t know about the different types of grants or how to assess your needs. It can also be difficult when you aren’t sure which grants to apply for. Below is a simple list to help get you started.

To better prepare yourself, keep in mind the tight deadlines, competitiveness, terms and conditions. You should especially pay attention to whether the incentive allows ‘stacking.’ This involves a combination of grants and loans to fund a business. Some funding may or may not be available if this is your strategy. So, it’s important to read carefully and treat grants competitively!

Types of federal small business grants


Free grants require no repayment or contribution, unlike a loan. However, these funds often have very specific criteria depending on what the business needs. If your business fails to use the funding as required, your grant may turn into a loan.

Partial contribution

With matching contribution grants, you must provide half the amount of your desired funding. The other half is fully covered by the government, and if eligible, no repayment is needed. But depending on the type of business, the amount of partial contribution can differ.

Conditional repayable

As the name suggests, these funds must be repaid fully or by as little as 10 per cent. That is the case only when certain conditions are met. For example, a few conditions may look like: 

  • No repayment until the business has met a profitable margin
  • Partial repayment after a set amount of years of profitability
  • Only 10 per cent of the grant is to be repaid
Grants to consider for SMEs in Canada

To start, SME grants generally cover hiring, training, capital investment, research development and market development. 

Some grants that cover these areas and work on an ongoing basis include:

Canada-Ontario Job Grant Program

This grant helps business owners with hiring and training new employees. You may be eligible for 50 to 83 per cent of non-repayable funds if you need  assistance. That includes access to business training programs. 

This grant helps employees stay up-to-date with the current knowledge and skill sets wanted for a growing and competitive economy. 

Note, if an employer has less than 100 employees, they are required to cover one-sixth of all training costs. To apply or learn more, you can visit http://tcu.gov.on.ca/eng/eopg/cojg/.

Government of Ontario Apprenticeship Completion Employer Bonus

This grant provides $1,000, no repayment required if a for-profit. That is under the condition that the SME hires and trains an apprentice from one of Ontario’s 27 trades. Its purpose is to improve apprenticeship registration and completion, address skill shortages and reduce training costs. The first requirement is  the apprentice’s certification. The second is proof that the business has not received more than $2 million in funding.

To apply or learn more, contact your local Employment Ontario apprenticeship office.

Canada Digital Adoption Program (CDAP)

SMEs who need assistance obtaining new technology for better efficiency can receive up to $15,000 in grants. They can also receive  up to $100,000 in a no-interest loan. The loan covers new or updated IT equipment, installation of new technologies and staff training for technology equipment. It also covers material and support services related to technology.

It comes with two elements in the form of sub-grants that you can apply for together or separately. 

The first grant of $2,400 helps SME owners who need to grow their business online. They also provide guidance from third-party organizations. Additionally, they developed a network of youth e-commerce advisors to help SME owners get started.

According to the Government of Canada page, the second grant is for “boosting your technology” with updated technology and software. Funding can be up to $15,000. To be eligible, businesses require one to 499 employees with annual revenue of $50,000 to $100 million.

For more information: https://www.canada.ca/en/innovation-science-economic-development/news/2022/03/backgrounder–the-canada-digital-adoption-program.html.

Government of Ontario Summer Company

Youth may be eligible to receive $3,000 to start their business in the summer, if the SME owner is aged 15 to 29 and still enrolled in school. Applicants must apply between May and July and not own a business yet. On top of the grant, owners will receive free advice and mentorship from local business owners. 

To send an application and learn more, visit: https://www.ontario.ca/page/start-summer-company-students

Starting a business is challenging, and for SMEs, the biggest barrier to taking that first step is access to funding. Exploring the grants or loans available is always a great start to get your business running. It may just be the opportunity you need to transform your business and yourself into a successful leader.

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