Government export grants: Receive 50% of eligible expenses up to $50,000 annually

Now that COVID-19 travel restrictions are winding down, trade shows and business travel are increasing. If you’re looking to export outside of Canada or grow your export markets, the CanExport program, a government-funded initiative, can assist you.

About CanExport

The CanExport program offered by the federal government was introduced in January 2016 and will provide up to $50 million over five years in direct financial support to small and medium-sized companies in Canada looking to develop export markets. CanExport is expected to assist up to 1,000 exporters per year across the country (up to $10,000 per company on average). Companies applying for CanExport may apply as many times as they wish during the year. The company must, however, wait for one application to be processed before submitting another. If you’re denied once, you may apply again and be accepted for funding. Each application is processed separately and previous denials don’t affect future applications.

Eligible activities for funding

CanExport provides financial support to Canadian companies for a wide range of export marketing and sales activities. Qualifying travel activities include:

• Business travel to visit prospects
• Participating in trade shows outside of Canada
• Market research
• Adapting marketing tools for new markets
• Legal fees associated with a distribution or marketing representation agreement
Ineligible funding activities include (1) ongoing core or operational activities, and (2) activities in a market that’s already 10% of your export sales. Large countries such as the U.S., Brazil, China and India can be divided up into multiple markets.

Available funding

The CanExport program:

• Reimburses up to 50% of eligible expenses
• Requires that the company match funds on a dollar-for-dollar basis
• Provides a minimum contribution of $10,000 (requires that the total cost of eligible activities be at least $20,000) and a maximum contribution of $50,000.
Timelines for filing an applying
Companies can file an application for CanExport funding at any time. Once you have filed your application, you can expect to hear if your application has been approved within 60 business days. CanExport will notify companies whether or not their application is successful. If you’re approved, funding is retroactive to the date you submitted your application.

Eligibility

To be considered for funding, a company must meet the following basic criteria:

• Must be a for-profit company
• Must be an incorporated company or a limited liability partnership (LLP). Sole proprietorships are not eligible for funding.
• Must have a Canada Revenue Agency (CRA) business identifier number
• Must have between 1 and 500 full-time employees. All employees must be on payroll and receiving T4 slips during the year. Sub-contracted employees are not included in the employee count.
• Must have sales of between $100,000 and $100 million in annual revenue declared in Canada in their last complete fiscal year.

Limits on funding requests

Companies can apply for a minimum contribution of $10,000 per application (total cost of eligible activities must be at least $20,000) and a maximum contribution of $50,000 per application (total cost of eligible activities be at least $100,000). Consultant costs for the production of a market study, for market research, for business-to-business (B2B) meetings and matchmaking are limited to 25% of the total cost of the activity/project.

Receiving funds

If your CanExport application is approved, you must first spend the money and submit all travel receipts to the government. Once the government has received proof of payment of the travel expenses, a refund cheque will be issued.

Bonny Koabel
Bonny Koabel (CPA, CGA) is President of AKR Consulting Canada – a Mississauga, Ontario firm specializing in government grants, subsidies, tax credits, refunds and rebates since 2003. She can be reached at bonny@akrconsulting.com.

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