For those of you who are not familiar with it, CanExport SMEs is a funding program delivered by the Canadian Trade Commissioner Service (TCS) and Global Affairs Canada, in partnership with the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP).
It is designed to promote and enhance Canada’s trade diversification efforts through grants and contributions to Canadian companies in order to help them prepare for and establish a presence in international markets where they currently have little or no sales.
Last June, the CanExport SMEs program struck with sudden, unexpected, and surprising news,…
…announcing that it is no longer receiving any applications starting June 12th until further notice. The program advised the potential applicants to check the platform during the fall for any news regarding its reopening.
Proceeding the hectic announcement, our Government Grants team at Leyton Canada successfully prepared and submitted over 20 applications, defying all obstacles, from the time constraint to the slow portal.
And, just when we thought we were done, more changes followed…
After the initiated administrative pause lasting approximately 4 months, the CanExport SMEs program had announced its return, from October 12th until November 3rd accepting applications for the current fiscal year 2021-2022. The CanExport SMEs‘ budget, however, was very limited.
CanExport SMEs for 2022:
CanExport SMEs is a highly competitive program with limited funding. The applications are assessed against the same merit criteria and scored relative to project size, complexity, and funding amount requested. Of course, the funding is awarded on a competitive basis for activities that show more promise and will be most effective and achieving their goals and objectives.
Although it is no longer accepting new applications, the program will reopen in January 2022 for projects starting in the next fiscal year, i.e. after April 1, 2022.
Nonetheless, the conditions are no longer the same.
Previously, funding covered up to 75% of project costs. Now, CanExport SMEs has changed its cost-sharing formula to 50:50. The program now funds up to 50% of eligible costs for $10,000 to $50,000 in funding per project. The applicant may submit a maximum budget of $100,000; the minimum budget is set at $20,000. The applicant, therefore, remains responsible for the remaining 50% of eligible project costs (in-kind contributions are not permitted).
To be eligible, the applicant must satisfy the 5 following criteria:
- Be for-profit;
- Be an incorporated legal entity, limited liability partnership (LLP), or cooperative in Canada;
- Have a Canada Revenue Agency (CRA) business number;
- Have fewer than 500 full-time equivalents (FTE) employees;
- Have $100,000 to $100 million in annual revenue declared in Canada during its last complete tax reporting year (or during the last 12 months for monthly and quarterly filers).
Regardless of the criteria mentioned above, there are companies and projects that are ineligible, such as third-party representatives (which include agents, promoters, consultants…), and cannabis and tobacco-related projects, or any similar industry involving recreational substance inhalation.
What Activities Does CanExport SMEs Support?
The program offers 7 activity categories allowing a high degree of project customization. The main focus of the program is export marketing activities of existing products and services in foreign or target markets.
A target market refers to the country (or sub-national market) where the company wishes to secure new customers or generate sales with the help of CanExport SMEs funding. The market is eligible if, during the last complete tax reporting year, the company has made less than $100,000 in sales in that market, or less than 10% of the company’s total sales (domestic and international). If it exceeds that amount, the market is ineligible.
CanExport SMEs also supports exploratory activities as well as activities that contribute toward a longer-term strategy for internationalization.
Currently, CanExport SMEs support several categories of non-travel activities to help businesses prepare for international markets. Although travel restrictions have been partially lifted, funding for activities that require a physical presence in foreign countries will only be considered for activities taking place next fiscal year. These applications can be submitted when the program reopens in January 2022 for projects that will begin after April 1st, 2022.
Applicants are responsible for ensuring that travel restrictions are lifted in Canada and destination countries before submitting an application, as the program will not provide funding of any kind for any additional travel days that result from mandatory quarantine periods.
For more information regarding the internationalization of your project, please check out our blog post on the subject.
How Do Applications for CanExport SMEs Work?
Applicants may opt for a multi-year project, or submit a new application to build upon a previous project, including up to 5 international target markets. This helps companies accelerate their growth and pursue a regional expansion strategy.
Want to learn more?
For further information about CanExport SMEs, contact us at Leyton Canada. We’ll be very happy to provide you with the best consultancy service.
