December 26

Government Funding for Startups

Angel Investors, Investors, Startup Finances, Startup Funding, Venture Capital, VIDEO

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What government funding for startups are available from the Canadian government? Deloitte Canada helps us go through the different funding programs from tax credits to grants, the funds available and how to qualify.

Government Funding for Startups – Automated Transcript

SUMMARY KEYWORDS

grants, questions, employees, canada, program, eligible, SRED, deloitte, project, tax credit, business, funding, jen, innovation, irap, hiring, funds, canadian, ontario, training

SPEAKERS

Craig Major, Jennifer Bleakney, Jon Irwin

Jon Irwin  Government Funding for Startups

Hi guys, my name is John Irwin. I’m a software engineer, I worked for a little company called Deloitte, Jen and I work at Deloitte there. And we focus primarily on government grants and incentives for innovators. So, Andre, good to see you. We. So today’s presentation is about global incentives and innovation, we’re going to talk to you about tax credits and grants. And before we get into things, I’m gonna let Jennifer introduce herself because she’s on she’s also part of the team here.

Jennifer Bleakney Government Funding for Startups

Thanks so much, John. And thanks for having me cranked. Good morning, everyone. My name is Jennifer Blakeney, as you can probably seeing my screen name here. And per John’s introduction. I’m a senior manager within Deloitte grants and incentives practice located out of our kitchen, our office in Waterloo. But I’ve spent a lot of time in Toronto used to live in Toronto and love going back and visiting often. So it’s nice to be here this morning. And I look forward to the conversation. Yeah, great. All right. Looks like we’ve had great attendance. So we’ll jump right in guys.

Jon Irwin – Government Funding for Startups

And just for those who are of you who are joining, feel free to ask questions using q&a or in the chat Kregel field the questions and, yeah, we’ll just, we’ll just go through things. So first off, where can funds come from, I just want to a blanket kind of start for this. So there’s a bunch of different ways that funds go for personal funds, you can get personal funds, which is typically called bootstrapping and friends and families. It’s a high risk, it does require strict financial discipline, which is not good for me. And it depends on your personal status. So you, it all depends on on do you have access to that it can be beneficial as you don’t really, or it can be very detrimental borrowing money from friends and family and then expecting you to pay you back. So it can be hitting this I would say 5050. The next which is a big portion and growing, hopefully here in Canada, is equity investment for VCs, though, that’s venture capitals, angel investors, private or even crowdfunding, like on Indiegogo, or things like that. The caveat with that is you do have to give up ownership, your shares do dilutes most likely and increase the number of stakeholders but if you get investment from the right VC or angel, or or whatever, they can also help to skyrocket your business as well. They can put you in touch with the right people. So if you partner with the right, people who are investing that could be beneficial to you. And also just let you guys know, as a side note, Deloitte does have a ventures branch. We launched it, Jennifer, I think was it this year with 100 million in funding.

Jennifer Bleakney – Government Funding for Startups

Yeah, that’s right, I think in January of this year.

Jon Irwin – Government Funding for Startups

Yeah. So primarily, we’re focused on series a funding, but we’re not really going to talk about that today. Today, we’re talking about grants in the great tax credits and grants and government incentives. There are loans that you can get. So BDC, gives out loans fed that gives out loan PVC is the Business Development Bank of Canada. They’re great for startups, they’re great for working with startups. I’ve partnered with them in the past. You can get you can you can mortgage your house to use for funding, again, that talks more about personal funds, but it is considered a loan. So you have risk of cash flow issues, repaying the loan, interest rates, personal guarantees from directors, the two we’re going to talk about today, tax credits from the federal government or provincial governments, well, mostly the the federal government, there’s no risk of losing equity or raising debt. And its success based on eligibility grants. And that’s what Jennifer’s expertise is in as well as stretching and sharing as well is, we’re going to talk about that we’re gonna talk about the difference between the two. So you’ve got your government grants, you got private grants, there’s actually a really cool app for those in the web three space. If you’re in the web three space, reach out to me after there’s a great app for private grants that you can access through an app. So really cool, Jennifer, I think I don’t know if I shared that with you. But we’ll have a conversation about that. It’s really cool. And there’s no risk of losing equity in a success based on timing and eligibility. But there’s a caveat. What is the difference between the two? So tax credit you’re entitled to, for example, the SRED program is part of the Tax Act, which means that if you’re doing SRED eligible activities, you are eligible to receive a tax credit for the work that you’ve done. The problem with a tax credit is you receive the money after you’ve already spent it. The beauty of the SRED program, we’ll get into that actually, we’ll get into that in a second. But again, because it’s part of the tax act, if you meet the requirements, you essentially get the money. Grants are extremely competitive. And Jen, I don’t know if you want to talk about these, these three bullet points are kind of putting on the spot. But did you want to kind of talk about how competitive the scene is now post COVID Or is Has it changed?

Jennifer Bleakney – Government Funding for Startups

It really depends on program. So the range of grants available in Canada, there’s more than 3000 I think total if you look across federal, provincial, and or municipal levels of government. So the landscape is very different per on a per program bases. However, I do agree they are very competitive, or they can be very competitive. And typically the way applications are assessed is using a merit based assessment criteria. So whereas the tax credits, they’re really assessed on whether or not they’re eligible, and of course, there can be some gray area and that but there are a defined parameters for what’s eligible. And if it’s eligible, then it’s to be approved. With grants, you can have an eligible project, you can have a strong project, and maybe not get approved, depending on the pool of applicants that you’re competing against. So the onus is on the applicant to really truly understand the eligibility criteria, and to showcase how their project aligns with the criteria and generates a lot of positive benefits that the government wants to see for the projects that they ultimately invest in.

Jon Irwin – Government Funding for Startups

Yeah, and things. The one thing I like to give to people as kind of like a catchphrase for grants, you must be granted permission before spending the money. So you have to you have to be accepted in and you receive the funds as you go. So some programs, you report quarterly, some programs, you report monthly, some programs, you you report your receipts, and they reimburse you. So that’s why the difference between the exclamation mark and the question mark is if you meet the requirements, you get the money with tax credits, if you meet the requirements, you might get the money with grants. So it all depends on the story that you tell them. So we’re not getting it into what is SRED this time. And Craig, we can talk about doing maybe a webinar specifically on SRED and the complexities of the program and the changes to the program. But today we’re going to talk about what is SRED is as a tax credit. So it’s a tax credit. If you’re a CCPC. That means you are incorporated in Canada, you are you’re incorporating Canada, you have expenses in Canada, you are you can get a refund from the government. Now, that being said, you don’t have to be a CCPC in order to take advantage of the program. If you’re not a CCPC or you’re a large corporation, you still get a tax credit, it just becomes non refundable. The difference between the two is still your Canadian company like Craig’s Toronto starts. So Craig says, hey, I want to apply for SRED, I have $100,000 in expenditures for salaries, Craig can get a check from the government in his hand and go buy a new car, if you like for $60,000 Approximately, there’s a small portion that is non refundable. And so just to break it out the federal level, it’s 15 to 35%. The higher rate is if your CCPC. lower rate is if you’re either non CCPC, or you’re too big. Then there’s two Ontario credits, the 3.5% which is non refundable, so that goes towards taxes owed and then the Ontario innovation tax credit, which is a percent refundable. Then there’s the OPR ITC, which is for if you’re if you’re spending money on it’s called third party payments. So third party payments is if you’re paying into a research institute, like the NRC or something like that, for access to their research, the ones in red, I just I’m assuming that most of the people here and Ontario. So there are other rates that we can get into if you have specific questions about a specific province, we can certainly have that conversation. So the one caveat with with with tread is that there is a time limit, you can only go back up to 18 months from your fiscal year end of the company. We’ll get into the details of that it gets it gets complicated to explain. But for today, we’re not talking we’re not training on trade. We’re just talking about the tread as a tax credit so but one thing to think about though, is you must be the one thing is you must be advancing your knowledge internally in order to be eligible. You don’t have to be developing machine learning or for those of you that I’ve been following the news chat GPT like you don’t have to be inventing the next chat GPT using GPT. Three. You have to just be advancing your knowledge and the expenditures that are eligible for that are labor materials. Materials can be bought from anywhere if you’re building a prototype. Not not you can’t buy laptops will get that and subcontractors. Subcontractors have to be Canadian Labor has to be Canadian, but materials can be from anywhere in the world as long as you’re building a prototype that SRED the other Tax Credit, which I know someone needs here to learn about today, for sure. And Jen, I don’t know if you know a little bit more about this, but I haven’t touched this in a while. But I can talk high level on this. There is an interactive digital media tax credit in almost every province, we’re going to talk about the IDM. TC here in Ontario. So there, it’s for developing interactive products. Specifically, if we want to just make it as simple as possible. If you’re building a video game, something that’s interactive, you’re eligible for this. So you can get up to 100% of eligible expenditures in between, and the refund is about 35 to 40%, depending on if you are developing the product for yourself, or developing the product for someone else. The other cool thing about this one, now, Shrek can’t play marketing costs. But the cool thing about the oId BMTC is that you can claim marketing costs up to 100,000? I think. So it all depends. It all depends on the size of the company. And there’s a whole bunch of different criteria that comes into play. It’s a very complex program. But video games are educational for children under 12. That’s kind of the two caveats for eligibility there.

Craig Major – Government Funding for Startups

I got a quick question on that, John. You know, we have a board game person in the room. But is it so is it just video games? Not physical games?

Jon Irwin – Government Funding for Startups

Because it’s a digital media tax credit? Yes. So if you were to build a digital component to it, we could talk about eligibility. But if it’s a physical game without any sort of digital component, there are other media, tax credits and grants in general know if you’re familiar with with any of the other ones, I know there’s publishing things for books, and, and magazines, but I’m not too familiar about physical games. But we can certainly there’s, there’s going to be a link to a website for you to do your own search on grants and tax credits at the end of this. So maybe you find it and as Jen said, there’s over 3000 grants, there might be one that we don’t know of, that’s out there as well. So it’s certainly worth a shot. But for this eligibility, it’s going to be a digital product. Jen, do you want to talk about r&d grid,

Jennifer Bleakney – Government Funding for Startups

I would love to thank you, John. Um, so just to kind of preface things here, the next few minutes, we’re going to go through a number of different slides with highlights on different incentive programs. As mentioned, the landscape is very broad. These are just some of the the key programs that we see oftentimes, they’re, for the most part industry agnostic. So regardless of what industry you operate in, these may be applicable to you. So this is really intended as just a snapshot as to what’s available and not a holistic overview. But hopefully it gives you a sense as to how grants work more or less and different focus areas. So the first category of incentive or grant programs we’re talking about today, focus on r&d. It’s a great segue from SRED. This program here, the Industrial Research Assistance Program, commonly referred to as IRAP is a program some of you may have heard of before. It’s a national program. It’s been around for many, many years. It’s administered by the National Research Council of Canada. And it’s actually often paired with the SR and Ed tax credit program, because activities can be eligible for both. This is a grant IRAP is a grant. So you’re pre approved in advance of starting your project. And then you file monthly claims, and that triggers direct deposits to your bank account. So the access to the cache is very, very quick. SRED, on the other hand would be filed at the end of your your fiscal year as part of your tax return. So there’s a difference in timing of funding, but the two can work harmoniously together. There’s some strategy involved in how to optimize the two, but they can be used together. Yes, what’s the eligibility criteria? As far as because they no SRED? You don’t have to be incorporated. You can file within your first year of a corporation. Is there a minimum for IRAP? So IRAP wants to see incorporation, typically two years, not necessarily revenue generating I have seen successful applications to IRAP for pre revenue companies, but there does have to be a strong path to commercialization as part of the application story and a minimum one employee on payroll. Normally, though, more than one employees necessary to really one make a strong argument in the application as well as have sufficient costs to be able to request sufficient funding. So with grant funding, it’s always tied, the funding is always tied to your costs and costs that fit into what is packaged or positioned as a project. For IRAP, the cost that it will find will be internal technical labor for time spent on a technical project, and or 50% of Canadian subcontractors that are spending time on the project. So it doesn’t find materials, it only finds labor. And so the more people you have on staff who are undertaking technical projects, the easier it is to build up a significant budget to then request IRAP for contribution for that. Typically, Irap projects at their core are looking for either product development, with some element of technical risk or uncertainty, and or process improvements. So that’s where we see the most interest as it relates to Iran. And the great thing about IRAP, is that because it has been around for so long, and it’s also a very unique program, wherein you don’t go to a website and submit an application, you actually have to have a one on one conversation with a federally appointed representative of the program, about your business about your project. And they decide if they would like to invite you to submit an application. So they’re kind of the gatekeeper. But in, in, in getting through their gate, if you are invited to submit an application, it’s really the beginning of an opportunity to build a long standing relationship with IRAP. And what we see with clients is that when they have one positive experience with IRAP, they do a project, it goes, well, they generate some benefits that IRAP likes to see, IRAP will come back to them in the future and say, What are you doing next? What can we find next? And they just, they want to constantly increase their support for that business, because they can see that positive track record. So it’s a really good program to consider as a long term strategy to support your growth over many years.

Jon Irwin – Government Funding for Startups

Are they still called it as Jennifer, the

Jennifer Bleakney – Government Funding for Startups

industrial technology advisors, so basically, every IRAP official, for the most part has a technical background. So sometimes they like to weigh in on the projects that are being pitched to them in terms of providing any technical insights. And sometimes it’s welcome. Sometimes it’s not. But I have had clients who really do value, the expertise and the perspective that their ita brings to the table.

Jon Irwin – Government Funding for Startups

Awesome.

Jennifer Bleakney – Government Funding for Startups

So I think that’s all on IRAP Unless there’s any specific questions.

Craig Major – Government Funding for Startups

Um, the next one, if you don’t mind this, with the employment thing, if you’re the only employee of your company, can you leverage that to what I would guess is your actual first employee.

Jennifer Bleakney – Government Funding for Startups

So So being an employee is helpful, because then you are hitting the criteria of one employee. However, if you’re the owner, or founder of the company, and you’re at Ford employee, and they’re the project will solely be executed by yourself, and you won’t be building up a team to support you in the project, it’d be very difficult to access Ira funding. But if it’s a founder if there’s only one employee who’s the founder on payroll, but if they get funding, they commit to hiring, say, two or three other technical staff members to support the execution of the project, then that could resonate well with IRAP, because IRAP likes to see job creation, and they like to see incremental revenue for Canada. So if they see that you’re creating jobs to move you on that path of development toward commercialization, then that ticks some of their boxes.

Jon Irwin – Government Funding for Startups

 And remember, this is a great, so the better the story, the more chance you have. So having one employee there’s, there’s less likely of a chance than a same company with three or four or five employees. So that makes sense. Is that it I kept for that region. Yeah.

Craig Major – Government Funding for Startups

Absolutely. And there’s a question here says, Do you need to pay yourself to be considered an employee? If you’re not on payroll? You’re not an employee, buddy.

Jennifer Bleakney – Government Funding for Startups

That’s right.

Craig Major – Government Funding for Startups

For I wrap, is there a window for the application? Or can you just play it anytime?

Jennifer Bleakney – Government Funding for Startups

Great question. So our app gets reimbursed every fifth federal fiscal year so the federal fiscal year is April 1 to march 31. So in the new year, January, February timeframe, is a really good time to start approaching IRAP, especially if you don’t have a relationship there yet. It can take some time to try to schedule a meeting with your ITA. I TAs are usually assigned based on your location and or the sector that you operate in. And so reaching out in say January During February is really great because it gives you a bit of time to schedule a meeting get in front of them. And the intention getting in front of them is really to pitch them on your company and your project. So they invite you to apply. And then if they invite you to apply, you can prepare paperwork, say in March, and then submit it. And that can then theoretically or technically be approved in April, once the budget is actually released and available for allocation.

Jon Irwin – Government Funding for Startups

Awesome. So I know there’s a lot of questions coming in, so

Craig Major – Government Funding for Startups

quite great. I’m gonna ask the rest of these ones at the end. So keep going. Yeah, awesome.

Jon Irwin – Government Funding for Startups

Innovation solutions Canada.

Jennifer Bleakney – Government Funding for Startups

Yeah, so this one is really unique. It’s it’s not really a grant, it’s an opportunity for the federal government to buy a pre commercial technology to test it, and provide you with testing or trialing feedback and data to allow you to leverage that to move towards commercialization. So the intent is really to help federal procurement in finding Canadian developed solutions, but also helping Canadian businesses in moving their product toward commercialization and giving them that test user as of the federal government can be very beneficial in terms of how you market your solution.

Jon Irwin – Government Funding for Startups

Oh, go ahead. This used to be called built in Canada is just Yes.

Jennifer Bleakney – Government Funding for Startups

Yeah, so this is, with some federal government funding programs, there’s evolution in the program. So sometimes they like to change the name to give it a bit of a refresh. So this has been around for several years in various formats. But effectively, the way that you access it, if you have a solution that you think would be of interest to fed the federal government, it can be any department is that you have to wait for federal calls for proposals. So the government decides what their procurement needs are, and what they want to take out effectively for bid to Canadian companies. And then those companies that have a solution that align with the, the the tender request can apply. Basically sharing information about their solution and how it aligns with the requirements. And then the federal government picks a couple. And they trial a couple, they spend about usually about $150,000, to buy some some of the product or some of the time of the applicant business. And then if they like what they see, then they can move toward folk procurement, which can be usually in the magnitude of two to $3 million. So that’s at the end of the day, the first customer that companies have would be the federal government, and they are buying the product, testing it giving you feedback and allowing you to leverage that feedback as you go to market.

Jon Irwin – Government Funding for Startups

 For example, during the pandemic, at the start, I think Jen, they had a bunch of, of procurement, or they had a bunch of requests out there for PPE, right, and in hand sanitizer, and things like that. So it’s always changing. So

Jennifer Bleakney – Government Funding for Startups

we can move on to the next slide. Um, this one here is for Northern Ontario, I’m not sure if there’s anyone here that is whether with a business located in northern Ontario, but we thought we’d include it, just to highlight the fact that there is this unique pot of funds available specifically for Northern Ontario. And if there’s any question as to where that boundary begins, feel free to reach out and I can confirm that with you. But it’s certainly north of berry. And it’s a suite of programs that also change frequently, they evolve, they morph, they close new ones appear. But it’s a suite of programs that are for the most part grant funding that can support innovation in northern Ontario. So if you are in the north, this is certainly something that you would want to look into.

Jon Irwin – Government Funding for Startups

Yeah, sorry. It’s kind of selfish. I put it there. Because I’m from Thunder Bay. I’m very familiar with no ECFC. So and I know that there was someone from Northern Ontario who was attending the event on Tuesday. So or when was the event? Um, last anyways, but Wednesday, Wednesday, yeah. All week. So yeah, this is great. Thanks, Jen.

Jennifer Bleakney – Government Funding for Startups

No problem. Still. So one important thing to share with grants is that finding the right grant or font deciding and learning if there is a grant for what you’re doing is certainly an art. So grants can be paired with projects in many different ways. So first, we spoke about IRAP, which is industry agnostic focused on r&d, or process improvement. Then there’s also a suite of programs that are focused more around industry, and their objective is to support businesses in certain endeavor. STS and that you so you just you determine if you fit into that industry. And then from there you determine if you have a project that has eligible expenses to meet that program’s criteria. So there’s a lot of different ways that you can play this matching game. With agri food. We just wanted to there’s one slide here. But there are many different programs in the agri food sector, especially in Ontario, it’s one of the critical sectors for Ontario. And for Canada, especially coming out of COVID, looking at increasing Canadian food security, increased reliance on domestically grown food rather than imported food. So it’s a it’s a major policy focus area for the government. And we see so many agri food programs open and close all the time. So this is not to say that there’s one agri food program, it’s more to illustrate the fact that there are agri food programs, and they always change. Right now there’s a program that just opened in in Ontario. And this slide is doesn’t fully reflect the scope of the program that just open but it’s open for a short period of time until February, the ninth. And it’s looking at supporting farmers, food producers, food processors in Ontario, who more or less supply the Ontario market. So it’s really looking at increasing capacity to grow and produce and processed food here and consume it here in Ontario. But there are, like I said, many programs that constantly open and close and they usually have defined intake deadlines. So they open and you have a limited amount of time to react to decide if there’s a fit or not. So just kind of an important piece of information to be aware of.

Jon Irwin – Government Funding for Startups

And for those of you that are familiar with agri some some of the programs in the past, were growing forward growing forward to now it’s cap and I think Jen is changing again next year.

Jennifer Bleakney – Government Funding for Startups

Yeah, it’s changing to sustainable cap. So they’re just adding the word sustainable in front of it. But there is a five year framework for these some suites of programs. So they just changed the name of the framework every five years. So the next five year wine kicks off in April. Yeah. Training. So you might, if you have any third party training costs, for instance, say you’re sending your employees for training or you have an employee who really wants to, to progress within your organization, but you feel need some additional development, perhaps you would like to send them for training to support them in their in their career development journey. This program here in Canada, Ontario, job grant will fund third party training costs. And the contribution varies depending on the size of the business. But if you have less than 100 employees, which I’m guessing a lot of the audience members here would fall into that category, you can qualify for up to 83% funding, grant funding on any third party training costs that you incur. So some clients that I work with, might say, Oh, I would love to send my employees for training, but I don’t have the budget for it. But then when they learn that they can get 83% of the cost funded, that changes their position, and they say, Well, let me apply for the grant. If I get approved for the grant, then I’ll go ahead and enroll my employees for the training. So they they do it based on whether or not they receive the funding.

Jon Irwin – Government Funding for Startups

Jen, Sam, Sam, I’m a I’m a I’m a company and I want to send my employees to get training on Microsoft Office or Excel. Is that an eligible activity? For CGG? I’m putting on the spot.

Jennifer Bleakney – Government Funding for Startups

Yeah, no, it’s I mean, it’s a great question. So where I will say there are challenges is as it relates to Microsoft Office Excel not so much. The challenge is, if if you have recently adopted a digital system, so say you’ve recently adopted Salesforce, and you want to send your employees to be trained on Salesforce, you would have to send your employees for training with an alternate organization than the one that implemented for you. And typically, whoever implements also trains the staff. So there’s a lot of challenges around ability to leverage this program on digital solutions that have been implemented within your organization. If it’s Excel training. That’s not an implementation project. So that’s no concern. You can just send your employees to be trained anywhere on how to, you know, use Excel and advanced skill sets there.

Craig Major – Government Funding for Startups

Thank you. What about dental practice employees for that kind of training? Sir, we have a question in chat room, I thought I think we need more information or no.

Jennifer Bleakney – Government Funding for Startups

Yeah, um, possibly more information there are. There are considerations around regulatory requirements. So it would depend as well on whether the training is required as part of their for their job or whether it’s optional training that’s designed to advance the skill set that the employee, but we could certainly look into it and discuss further

Jon Irwin – Government Funding for Startups

CanExport

Jennifer Bleakney – Government Funding for Startups

So this program here canexport has been around for a few years and has evolved and morphed and changed many times. Currently, it finds export marketing development activities outside of Canada, at 50% contribution to a maximum of $50,000 in a single application. What is interesting is that this program does allow applicants to submit multiple times so you can submit an application get approved, undertake your project, close that out, and then reapply for perhaps a new market as you’re, you know, you’re extending your reach globally, it finds many different costs associated with marketing and export markets. So that can include travel to those markets, accommodations, and per diems. Attending trade shows in foreign markets, Business Development travel, so you may have contacts in foreign markets, but you may want to go visit them to demo your solution or to just work through the sales cycle with them. And those trips can be funded as well. So and then there’s also other marketing costs, like booth displays and collateral SEO, optimization, different things like that. But it’s a very good program for any company that’s looking to increase their marketing and exposure outside of Canada. And then that brings us into our last category, which is hiring grants. So hiring grants are, I would say, the easiest category of incentives to access, because the eligibility requirements on the business are relatively minimal or almost non existent. What the eligibility requirements really pertain to the student or the role that’s being filled or the employee that’s being hired. But how they work is that their reach subsidy, so you can apply for funding with that potential candidate that you’re looking at hiring, find out if you’re approved for funding or for a wage subsidy, and then move ahead with hiring that person. Knowing that you’re going to get a wage subsidy for a certain period of time, usually about three to six months. And and then you you receive that wage subsidy just by filing their payroll records at the end of the funded period. And that triggers a direct deposit contribution.

Jon Irwin – Government Funding for Startups

And I know I’ve seen a couple questions like this, and I’ll just address them all Canadian. So all of these granting grants and tax credits are for Canadian costs for Canadian employees. So you can’t apply for a grant for foreign employees. And you have to hire Canadian or PR or students if that’s if I’m correct. Now, there are depending on the hiring grant to there are there could be eligibility criteria. I know there’s some for if you’re hiring someone with a disability, there’s specific criteria around that. But some are, this one is up to a max of 30 years old, somewhere between 15 and 30, different things like that. Does that make sense? Jennifer?

Jennifer Bleakney – Government Funding for Startups

Yeah, absolutely. So the eligibility criteria really does come down to the person you’re looking at hiring and I see a question here. Does it have to be a student? No, some programs do require that the hire be a student and other programs don’t so it’s they’re not overly difficult programs. It’s not overly difficult funding to access from a company qualifying perspective. But it can be challenging to navigate who you’re hiring and and which program they may fit into. And if the programs open and accepting applications, so there is some complexity but at the end of the day, there’s opportunity to receive wage subsidies for typically students, recent graduates, so anyone who’s graduated from post secondary in the last three to five years, and or employees that are high being hired into a technical or green focus role. Those are priority areas, if you will, but it really comes down to who the person Isn’t is what job they’re being hired for? And when and then that dictates if you’re able to access or apply for funding.

Jon Irwin – Government Funding for Startups

Yeah. And, yeah. And so just as a takeaway from this genuinely talking about this, or do want me to talk about this, you can have summer jobs. You can go ahead, John, I love this program. It’s because it’s so easy to apply for at least it used to be. And if you’re not for profit, I think you can you get 100% wage subsidy, but it’s for and Jen, correct me if I’m wrong, is it for minimum wage within the province that you’re in, right is the coverage, that’s the max. That’s right. So if you’re paying above minimum wage, you’re not getting contribution toward that. But nevertheless, nevertheless, it’s great, you can hire summer students, you don’t have to you can do less than 50 employees. It’s a great program to get some additional help through in the summer, and spring, summer and fall. So it’s a great program to currently accepting applications, which is weird, because definitely they open it up in January, but they’re open until January 12, takes you half an hour to apply for this one, maybe an hour, depending on how many. And it’s I don’t know if there’s a limit to have a number of positions that you can apply for. So it’s a great, great, great, easy program. Good takeaway for you guys.

Jennifer Bleakney – Government Funding for Startups

And the benefit of this one, so as you’ll see, just at the top of that last slide, the deadline to apply is January 12. So you can put forth a hiring plan in your application that may include hiring, let’s say, for instance, four students, and then you hear back in April, how many you’ve been approved for? And if you’re approved for four, then maybe you would go ahead and hire four. But maybe you hear back and you’re approved for two or three, then it’s up to you at that point do you actually want to still hire for? Or would two or three be funded positions be sufficient for you? So based on timing, and when information decisions are made, you’re able to pivot and adjust as needed? Yeah, thanks. That’s awesome.

Jon Irwin – Government Funding for Startups

So we’re coming to the end, just some useful information takeaways. For most grants that are Jen, feel free to correct me because I just put this in myself. But like, if you’re getting if you’re looking for at least $100,000, typically, they’re looking for you to be incorporated for at least two years. Is that a safe bet you’re shaking? Okay, grants, you must be approved before starting the work. Again, most hiring grants can be completed within 30 minutes to an hour. Some grants do require you to have income, I think can export needs you to requires you to have income $100,000 For the last year, or over at least one fiscal year or something. And then here Oh, go ahead.

Jennifer Bleakney – Government Funding for Startups

No, sorry. I was just agreeing with you on that.

Jon Irwin – Government Funding for Startups

And here’s the takeaway for you guys. And yes, we will providing the slides in a PDF format. And here’s the takeaway for you guys. If you want to conduct your own search, I highly encourage it, you can go to this link. And it’s called the big business benefits finder. You can also type it in Google right now, if you’d like. You create a profile, it’ll tell you what grants you’re available for. I don’t know if it still updates you when new grants are released, that you that your profile matches up with. But it’s a great opportunity for you to kind of do your own legwork. And if there’s any, and here’s the thing that I’m offering to you guys, because Craig such a nice guy. And so if you find any that you’re interested in that you want, it’s kind of my two cents, feel free to email myself. If I can’t answer it, I’ll ask Jen. Single Jen super, super busy. So I’ll try to feel as much as I can for for her. But if there’s any grants or tax credits that you find through that benefits finder that you want more information on or you think you’re eligible for and you want our two cents, let us know, we’re more than happy to answer any questions and feel that kind of stuff. So at the end of the day, how can we help beyond? Beyond just doing these presentations, and I don’t know, John, if you can talk about to the second one. I don’t know. I’m kind of new to Deloitte only been here since March. So so we can help you identify which over the 3000 tax credits and grants and incentives are most applicable to your growth plans and help you successfully access your share of the $6 billion of funding. I guess what the hardest part of my job is saying no, you’re not eligible, eligible because a lot of people think oh, yeah, can I go up to this? Can I go up to this? Can I go after this? Because they don’t typically tell you what everything that is comes in when it comes to eligibility. So it’s, it’s it’s Yeah, so we’ll help we’ll advise you in that in that route. But I highly suggest going to the business benefits. Find your doing a search and then presenting send the links with, with the grants that you find that you that you’re interested in. Gender, we still do the GI Q greenhouse lab.

Jennifer Bleakney – Government Funding for Startups

We do offer them yes, in certain circumstances. And we could, we could advise accordingly based on the feedback received from the grants finder, that you mentioned, John to see how would make sense to proceed?

Jon Irwin – Government Funding for Startups

Yeah. So again, more than happy to again, we’re gonna get into questions. So anyway, anyone? Anyone have any questions? And I think

Craig Major – Government Funding for Startups

it’s been, it’s been crazy. And I’m hopefully I’ve got most of them here. If I don’t, if I’m not asking and asking your questions, please throw them in again. But at the very beginning, we started early on, if we create smart living projects and Wi Fi routers that are engineered in Waterloo, but manufactured outside of Canada, are they eligible for IRAP?

Jennifer Bleakney – Government Funding for Startups

So Irap is, I would say, manufacturing outside of Canada, there’s certainly not preclude you from IRAP, I’ve worked with clients in the past who have manufactured offshore, what I find is not the manufacturing itself, but rather the r&d that goes into the product design. So since that’s happening in Waterloo, presumably the all the IP created would be housed within Canada, within that company. So I don’t see any reason why that alone in terms of business model would not qualify for IRA.

Craig Major – Government Funding for Startups

And for the hiring grants, specifically, or maybe even more for any of these grants, we get a lot of these types of questions. So I’m going to kind of lump them together, do you need to be incorporated? Our limited partnership, Liability Partnership help or whatever it is in Canada? And do you need to have the accompany form before you apply?

Jennifer Bleakney – Government Funding for Startups

So for hiring grants, you don’t, you don’t typically have to be incorporated. Again, there’s hiring grants are a broad umbrella of different programs. So each program sometimes has its own nuances. And that’s the complexity of grants and incentives. But typically, incorporation is not required not for profits also qualify, just want to add that I saw some some comments about not for profits. And in terms of the company being formed, at the end of the day, if you’re hiring somebody through one of these programs, that individual who’s being hired does have to sit on a corporate payroll, and there has to be what the government deems capacity within the organization to train and help that individual develop their skill sets. So depending on on that, it may still work and may not I think it would it would be dealt with on a case by case basis. Yeah.

Craig Major – Government Funding for Startups

Great. I’m gonna jump into the next one here. For IRAP, are you eligible? If you have more than five technical staff in another country in general, generating revenues? In Canada? It’s the same question, I guess.  So Irap, there’s nothing that precludes you from having technical staff outside of Canada. However, IRAP would only fund salaries of staff that are within Canada. So those those employees offshore would not be eligible for IRAP subsidy, but the company could be eligible for IRAP. And how long do you have to have employees on your payroll? How many years before you can apply?

Jennifer Bleakney – Government Funding for Startups

For it? The question is for Irap, there’s not really a rule around that it’s really dealt with on a case by case basis by typically two years incorporation for the business is the minimum threshold.

Craig Major – Government Funding for Startups

And I think this next question has to do with thread. How do you define innovation? And more importantly, how do you define competitive innovation?

Jon Irwin – Government Funding for Startups

Finally, question for me, gentlemen, getting all the questions. That’s great. So I so innovation, can’t really define innovation. Everyone has their own definition of innovation. Essentially. Innovation is just you’re pushing the boundaries, you’re advancing knowledge. You’re trying new things. There’s a funny graph. It’s, it’s a mess around and find out. So that’s that’s kind of that’s kind of what innovation is. Innovation is failures. Innovation is is trying new things that like inventing. Innovation is maybe inventing a new a new coffee cup or innovation can be anything as long as it’s something that’s essentially new. You don’t have to be doesn’t have to be bleeding edge. It doesn’t have to be the next latest and greatest Next, Facebook or VR or AR doesn’t have to be anything like that innovation can be very small or it can be very big.

Craig Major – Government Funding for Startups

All right, we’ve got a few of these, which was interesting, like what does the word sustainable mean for future cap eligible projects.

Jennifer Bleakney – Government Funding for Startups

I lost also curious to learn that compensation for that new forthcoming framework just ended, I think it was at the end of September. So there aren’t that many details available at this time as to what it will entail. But certainly it it accentuates the fact that sustainability will be a focus of sound, at least some of the programming that will come out of this new S cat framework. And have, like I said, is a five year framework of funding. So there are different programs that come out of cat so well, a lot of times with incentives, there’s multiple layers of initiatives and programs and iterations of programs. So there’s a lot yet to be told. But certainly, we can appreciate that there will be an emphasis on sustainability, whether that be energy, efficiency, packaging, reducing plastic waste, so many different angles. From a producer farmer perspective, agricultural sustainability practices, I’m sure will be a component of it as well. So it will be multifaceted.

Craig Major – Government Funding for Startups

Or there sectors activities that are receiving more funding from SRED than others

Jon Irwin – Government Funding for Startups

from SRED? No, it’s Well, I would say there are more companies in the tech sectors that are applying, I would say, if we looked at AI, in the past, there was data, I’d haven’t seen any recent data. But it’s, it’s a much just to give you guys kind of an example, it’s much easier for an IT company to claim SRED and get good a good tax credit back from the government. Because if you have one or two employees, you’ve got $100,000 in salaries for that developer. Whereas if you have a farm or something like that, you’re you’re paying your people less than in, there’s less innovation when it comes to farming unless you’re building a new machine, or you’re building something good, something something innovative. But again, I would say the larger sectors that that that we’re seeing, but there’s tons of manufacturing clients that we have as well. So manufacturing and tech are probably the two biggest. But obviously they cover a large range of other sectors, sub sectors from that.

Craig Major – Government Funding for Startups

Sorry, I just had to unmute, you’re behind a window there. And the next one is does can export deal with projects that I’ve concluded or projects that are coming up? I think you have to get pre approval. But let me throw it your way. Yes, you’re right, Craig, you do have to be approved in advance of undertaking project activities for can export.

Jennifer Bleakney  – Government Funding for Startups

So again, that can the beauty of that is that if you apply, perhaps you’re applying with your wish list of all the different expenses you would like to incur to be able to do that broadly, if you will. And then once you receive feedback from Kanex button, you understand if you’re approved, and if so which costs are you approved? For? Is it everything you requested as a? Is it a portion of what you requested? Then you have you’re armed with that information to decide? Is that going to change the way that you’re going to approach the market? Are you going to move away from incurring certain expenses? Because you didn’t receive funding? Or? Or how will you deal with it? So at least you have that Intel to make your decisions.

Craig Major – Government Funding for Startups

Another can export question is can export for trade shows in the US only or trade shows in Canada as well.

Jennifer Bleakney – Government Funding for Startups

So it’s can export could theoretically support trade shows anywhere in the world outside of Canada. So it could include the US. But it could include other countries as well. And it cannot support Canadian trade shows, unfortunately.

Craig Major – Government Funding for Startups

Okay, so anywhere outside of Canada, and is their preferred destination. But it sounds like we’ve answered that they’re great.

Jennifer Bleakney – Government Funding for Startups

The preferred destination is really dependent on where the company is currently exporting, if at all. And the the rationale or the strategy for why they’re targeting certain markets.

Craig Major – Government Funding for Startups

up there’s a question here, I thought there was I thought Ontario also high offered hiring grants.

Jennifer Bleakney – Government Funding for Startups

There are some hiring grants that are available through the province as well. They just weren’t explicitly outlined here. But yeah, well, usually they’re federally funded, but in some cases, they’re provincially funded as well.

Craig Major – Government Funding for Startups

Yeah, and a couple of people asking here do you need And accountant to help with threat.

Jon Irwin – Government Funding for Startups

Ah, so you actually need more than an accountant act? Well you don’t need but it is ideal to have more than an accountant because there’s a technical portion to Betrag claim, which is why me being a software engineer, I’m involved working at an accounting firm with Deloitte, you need to you need to tell a story to the CRA from a technical perspective as to what you did throughout the year and why it’s an advancement from your perspective. Accountants, for the most part, accounting firms will have potentially a consultant, the larger ones that big seven or the top seven in Canada, the smaller mom and pops might not. But any accountant can file it, you just need to make sure that you have the technical portion as well, because it’s not just about the numbers. There’s a technical portion as well. I know lots of people who file who write their own SRED program or write their own SRED reports and give it to their accountant to file. So you can certainly do that if you’d like there’s just there is a risk. If if you’re doing it yourself, because the CRA, they’re not just going to let you keep filing without checking in. So sometimes they’ll go they’ll do an audit or what’s called an ft cast first time claiming advisory service. When you file for the first time for SRED which they’re going to want to come in make sure it’s not vaporware and, and different things like that. Make sure it’s an actual if you’re claiming manufacturing that you have a building you’re doing, you’re doing what you said you’re doing so

Craig Major – Government Funding for Startups

right, and I’m putting the business Finder link in the window. Again, we had a lot of another question about Hey, where’s that business Finder link? With an accountant, other. If you’re using an account or someone else they follow up on the inquiries or issues? Or Is that why you hire them.

Jon Irwin – Government Funding for Startups

So we will help out? Well, at least hired Deloitte, we will help defend your claim from start to finish. Because there’s a lot there’s a lot more and without getting into what like the nuances of SRED. If you get paid for an audit, there’s a lot more to just filing a claim, you have to have some contemporaneous supporting documentation. There’s a whole bunch that comes into play. If you’re picked by the CRA for audit, we at Deloitte, we will hold your hand we will we will do we will do specific training for the audit, we will defend your claim in front of the CRA auditors, we will help to put together an audit package and we will coordinate everything with the CRA but it’s it’s a lot. There’s actually there’s a potential for two reviewers auditors to come one for the financial side and one from the technical side not trying to scare you guys just kind of letting you know what you’re getting into if you’re doing it yourselves.

Craig Major – Government Funding for Startups

Is there a different link for the big business fund than the business benefits finder? Is that the same thing? I don’t know. I don’t know what the big benefits big business funding is. Okay, I think that’s the same link just make things that might have just been me mumbling Navia. So I think I’ve answered all the questions. I’m going to leave it open just for a second. So but I wanted to throw it over to you. If people want to work with you and contact you, first of all, you know, what is working with Deloitte like, you know, fee wise and whatnot in to where did they at the end? Where did they go to find out more? Connect with you or Jennifer?

Jon Irwin – Government Funding for Startups

Yeah, so I’ll, I’m sure you you might I’ll type in my email address here, Jen, and you’re more than welcome to but I can feel the questions. But feel free to reach out there are fees, there’s three types of fees that we can work on. One is contingent, where it’s a percentage fee, and we share the risk and filing that’s for SRED. I think we can do it for some grants. But some grants explicitly state that we can’t do contingency fee. So there are some that we have to do hourly, there are some we can also do flat rate. So those are the those are the kinds of options that you have. And if I thank you for putting your email in the chat room here, we won’t do that I need to but for people who are on YouTube, they want to find out more about you and Deloitte on LinkedIn. Where do they go or anywhere else social media. I will post my Yeah, LinkedIn is probably the best way I check that as much as I can on a daily basis. I’ll post right now just give me a second I’ll go to my profile and post every call. Here’s my in my LinkedIn profile, feel free to add me I post some cool stuff. I posted some stuff about the fusion reaction that just happened track TPT I share a lot of stuff from Craig so but you’re you’re better to follow Craig than to follow me as far as new information and things like that. So

Craig Major – Government Funding for Startups

any last words, Jennifer

so again,

Jennifer Bleakney – Government Funding for Startups

thank you for everyone for attending. We hope to see If this was helpful for you, and as Dan mentioned any questions, feel free to reach out. Thanks for hosting as well. Craig, thanks.

Craig Major – Government Funding for Startups

Thank you very much for taking the time today. We really appreciate thank you for all the questions and everyone who participated today was really a fun time. Have a great weekend, everyone.

Jon Irwin – Government Funding for Startups

Thanks, guys. Take care. Bye


Tags

Entrepreneurship, government grants, startup funding


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