Are you looking to expand your business outside of Canada?
Does your small or medium-sized enterprise (SME) have between $100,000 and $100 million in annual revenue?
Does your Canadian business employ 500 or less FTE (full-time or equivalent) employees?
Is your business either a for-profit, incorporated legal entity or a limited liability partnership (LLP)?
If you answered yes to these questions you’ll want to read this article.
We’ll discuss this exciting Canadian business grant, eligible expenses, and how we can help you receive funding for it.
It’s never been a better time to apply for the CanExport SME grant. The Canadian Government will cover new costs associated with entering international markets that have emerged due to the COVID-19 Pandemic.
An Introduction to the CanExport SME
CanExport is a program offered by Canada’s Trade Commissioner Service (TCS) of Global Affairs Canada.
CanExport’s purpose is to provide funding for Canadian organizations, including small to medium-sized enterprises, academic institutions, and research centres, to help break into new markets or conduct research internationally.
In every application a business may select one to five export markets to execute the project in. It’s important to note the number of export markets you choose will not affect the outcome of your application.
Your project must offer the following benefits to Canada: new jobs, investments, increased sales internationally, and invigorate the Canadian industry and economy. Your grant must include marketing plans, sales projections, key performance indicators, timelines, milestones, customer identification and budget.
The professionals at the Trade Commissioner Service aren’t looking for applications written from a sales perspective. What they’re after is a detailed description of the activities you plan to undertake in the project, and how they’ll benefit the Canadian economy. Day to day business expenses are not eligible for the CanExport SME Grant.
A “project” can be anywhere from $20,000 to $100,000 in total. Here’s how it works:
The applicant must pay for 25% of the project and if your application is accepted Global Affairs Canada will pay for the remaining 75%. But wait, it gets better: you can be accepted for funding multiple times, although you can only have one active project at a time.
What’s new with the CanExport SME grant?
- Export brokers in the agriculture and agri-food sector may be eligible to the program, provided they meet Canadian content requirements.
- On August 22, 2019, the CanExport business expansion grant increased eligible expenses to cover 75% to a maximum amount of $75,000 for small to medium-sized enterprises (SMEs).
- The maximum funding for online advertising activities (Category C) including Search Engine Optimization (SEO) has been increased to $50,000 per project. The program is now allowing online advertising on social media platforms, online marketplaces and search engines.
- Expert advice for digital and e-commerce marketing (Category F) is now eligible.
Which sectors are ineligible to apply?
The Canadian Trade Commissioner Service welcomes applications from all sectors other than the cannabis, tobacco, vaping sectors, or any business involving recreational substance inhalation.
Which expenses does the CanExport SME grant cover?
The CanExport SME grant has 7 categories of eligible expenses:
A. Travel for meetings/events with key contacts from target market(s)
At the time of this article, November 2020 it’s best to avoid this Category. CanExport currently has a warning on their website that states:
“Approval of funding for travel and activities that require being physically present in a foreign country depends on the status of travel advisories when we assess your application.
Applicants are responsible for ensuring that travel restrictions are lifted in Canada and destination countries before submitting an application. We will not provide per diem funding for any additional travel days that result from mandatory quarantine periods.”
The Government of Canada wants to provide support to businesses through this unique time, but has pivoted its efforts.
B. Participation in trade events to meet key contacts from target market(s)
This is the second category you should stay clear of unless you’re attending a virtual trade event. From the CanExport’s Applicant Guide:
“CanExport SMEs may support participation in international trade events. These include trade fairs, seminars, international forums or private exhibitions. Participation can be virtual or in-person when travel permits. Trade events taking place in Canada are ineligible.”
C. Marketing tools creation, adaptation and translation for target market(s)
This is the category we get most excited about at BSBCON, but remember these expenses must be based on your expansion, not for day to day marketing expenses like employee compensation or rebuilding your website. With that being said here’s a list of eligible marketing expenses for your expansion project:
- The cost of creating or adapting brochures and promotional print materials, videos and websites.
- The cost of translating existing marketing materials. In your application, indicate the language for which you need the translation.
- The cost of online advertising including Search Engine Optimization (SEO) for a maximum of $50,000 per project. In your application, specify the platform chosen for your target market(s).
Eligible platforms include:
- social media platforms (ex. Facebook, Twitter, LinkedIn, Instagram and WeChat)
- online marketplaces (ex. Amazon and Alibaba)
- search engines (ex. Google and Yahoo)
D. Interpretation services for target market(s)
CanExport SMEs may support paying for an interpreter to facilitate teleconference/video conference meetings or in person interactions when travel permits. In your application, indicate the language for which you need interpretation.
E. Intellectual property protection, certification and adaptation of contracts for target market(s)
Eligible expenses under IP protection and certification:
- Application fees paid to local authorities for the protection of intellectual property (IP). This includes patents, trademarks, copyrights and protection of trade secrets.
- Application fees related to certification that is required to legally access a jurisdiction.
- The cost of registering a product in a target market.
- Adaptation and translation of contractual agreements (such as sales contract, distribution agreement, nondisclosure agreement, etc.).
- We may consider costs of new certifications to respond to COVID-19 related market requirements on a very limited basis. To be eligible, they must be market specific and COVID-19 related, and you must provide a full and detailed justification.
F. Consultant – Business, tax and legal advice for target market(s)
CanExport SMEs may support paying a consultant for expert advice pertaining to your target markets.
To be eligible, the consultant must be an independent contractor and have specific expertise outside of what the applicant company is expected to have. Expenses are ineligible where there is indication of an employer-employee relationship.
Eligible expenses under consultant fees include:
- expert advice for legal, tax or business matters
- expert advice on regulatory issues (such as market access, intellectual property and certification)
- expert advice for digital and e-commerce marketing
G. Consultant – Market research, feasibility studies, identification of key contacts and b2b facilitation for target market(s)
Here’s another category we get excited about. Namely for the option to retain outbound lead generation services for a target market. This option gives us reign to help provide direct business to our clients in international markets.
CanExport SMEs may support paying a consultant to provide services or create products for international business development (IBD), namely:
- export market research
- identification of key contacts
- facilitation of business-to-business (b2b) meeting programs and matchmaking
- technology feasibility studies
In addition, the purchase of IBD tools may be eligible with appropriate justification:
- prepared research studies/market evaluations
- contact lists from reputable sources
- market research software or subscription
Which expenses does the CanExport SME grant not cover?
Attention: Do not apply for ineligible expenses. If you do your chances of approval will diminish substantially.
Ineligible expenses include:
- Ongoing, regular operational activities or core business, including product development, production and distribution expenses
- Expenses for activities taking place outside of the project phase of the funding agreement
- Expenses related to non-specified activities, such as those marked “To Be Confirmed”
- Expenses related to preparing an application for CanExport SMEs or submitting claims
- Capital costs and office supplies (such as computers, office equipment, audio-visual equipment, office space, supplies and business cards)
- Overhead expenses (such as warehousing, long term legal services, utilities and photocopying)
- Salaries and commissions
- Honoraria for professional services
- Expenses relating to lobbying, public relations, policy development and influence
- Giveaway items (pens, mugs, umbrellas, tote bags, t-shirts, etc.)
- Goods and Services Tax (GST), including any GST share of the Harmonized Sales Tax
- Any refundable portion of taxes, duties or other items for which a refund or rebate is available (ex. carbon taxes and credits)
- All other costs that could be deemed as subsidizing a product’s selling price, therefore contravening Canada’s international trade obligations. The CanExport SMES program reserves the right to make this determination.
Please note: eligible and ineligible expenses change from time to time. As your CanExport SME grant writers we consult with Global Affairs Canada, and refer to up to date guidelines frequently at:
What defines an eligible target market?
This program helps Canadian businesses grow their market share by introducing their products and services to new international markets.
CanExport defines a target market as the country (or sub-national market) where a company wishes to secure new customers or generate sales.
Brazil, China, India and the United States (US) are segmented into independent sub-national markets.
Each sub-national market counts as one choice toward your company’s maximum of 5 target markets per project. In your application, you must disclose export sales for the chosen sub-national market, as well as total export sales for that country.
Let’s take the United States (US) for example. The US is divided into four sub-national markets which include:
Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin
Alabama, Arkansas, District of Columbia, Florida, Georgia, Louisiana, Maryland, Mississippi, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, U.S. Virgin Islands, Virginia, West Virginia
Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Kansas, Montana, Nevada, Oregon, Utah, Washington, Wyoming
They consider a market new and eligible if, during the company’s last complete tax reporting year (or last 12 months for monthly and quarterly filers), sales for that particular market were:
- less than $100,000 or
- less than 10% of the company’s total sales (domestic and international sales combined)
Which target markets are deemed ineligible?
Any country that has sanctions imposed by the Government of Canada is deemed ineligible.
Additionally, any country that the applicant has made more than $100,000 in revenue, or more then 10% of their gross revenue is also deemed an “ineligible market”.
Remember, this grant is meant to help Canadian companies with generating business in new international markets, not existing ones.
Why choose BSBCON as your CanExport SME grant writer?
At the end of the day the choice is yours. You can apply for this grant yourself, and you might be accepted; but for people who haven’t applied before it can take weeks, and even months!
Moreover, you’re an expert in your field, and we’re an expert in ours. We know the ins and outs of this program and take pride in helping our clients grow their business in international markets.
As Canada’s leading grant writing firm, we’re specialists in securing government funding.
We understand how stringent the Government of Canada is with utilizing tax payer dollars to fund businesses. We make sure to take the appropriate steps, as your success is ours too.
Now that you’ve done some research on the CanExport SME grant it’s time to understand if you’re eligible for funding or not.
Please do so by reaching out to our team by emailing [email protected] and we’ll get back to you within a matter of hours.
Once we approve your eligibility we’ll send over a service contract, and ask for a 50% deposit fee. Unlike our competitors we work on a fixed rate basis; therefore, saving you time, money and hassle.
Every client, and every application is taken equally as seriously. We look forward to working with you!