Funding is a key challenge for technology start-ups. Often, early-stage companies rely on bootstrapping until they develop to a point where they are able to raise equity through Series funding. However, there are a variety of government programs that can ease this transitional burden by providing funding. Scientific Research and Experimental Development (SR&ED) is one of the most common sources of government funding for technology companies, but it by no means the only money out there. Other programs often come in the form of wage subsidies, as they are focused on trying to create jobs for Canadians, but other government grants and credits exist.
Some programs, like SR&ED,
offer funding if you meet the eligibility requirements. But other
programs are competitive and require applications, as there is a
limited pool of grant funds. Having a business plan and a prototype
increases the chance of success with these programs.
A sampling of the programs available:
Industrial Research Assistance Program (IRAP)
IRAP can provide grants to small to medium sized technology companies with the potential to grow. There is an application process. IRAP can also assist in business development with consulting by using their industrial technology advisors.
BC interactive digital media tax credit
Corporations that develop interactive digital media products in British Columbia can be eligible for this credit, which is equal to 17.5% of salaries and wages. Games and educational software are types of products that can qualify. There is an application process, and if approved, the refundable credit is claimed on your corporate income tax return.
Alberta Innovates Technology Futures
This program offers support and grants between $15,000 and $50,000 to early stage technology companies. There is an application process with various deadlines throughout the year.
Canada Job Grant
This grant can cover 2/3 of your employees' training costs, but there are restrictions on how training can be done.
MITACS
MITACS is a salary matching program for organizations look to hire graduate students and postdoctoral fellows for specific projects.
Digital skills youth internship program
This program offers a $16 per hour subsidy for wages for a youth working to develop digital skills. The company needs to have existed for at least two years and have five or more employees.
Get Youth Working! Program
This program provides a $2,800 wage subsidy incentive to hire eligible youth outside of the Lower Mainland of B.C.
YMCA Youth job match program
The program offers $9.25 per hour wage subsidy for prospective candidates who may otherwise be unqualified.
BC tech co-op grant
Offers a $2,700 grant for hiring first-year co-op students for technology companies.
As you see, there is a lot of non-SR&ED government funding available, but it requires awareness and time to apply. Each program has their own eligibility criteria, some of which are general, and some of which are technology specific. Some of the more competitive grants can be difficult to get. The application process is time away from developing your core business, so you should consider only pursuing grants that you have a higher chance of obtaining.
For a summary of programs available in different provinces and territories, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
