Financing your tech startup: Government funding programs across Canada
Depending on where you and your tech startup are located in Canada, the federal and provincial governments often offer funding programs to help build technology businesses. These programs aim to boost technology transfer from academic and research organizations to business, to create useful commercial products and profitable businesses in their jurisdictions, and to support employment and training in technology sectors locally.
Government programs provide good support to a financing plan but often require that the business provide some level of funding from their own sources. As a key qualifier, many programs call for the startup to provide matching funds (50%). This may be prohibitive depending on what stage your idea or company has reached and what resources you have available.
When seeking government funding, tech startups should ask:
- Where will we find the required (matching) funds necessary to qualify for a number of government programs?
- How long will the approval process take for your application, and when would the government funds be advanced to my business?
- Do any terms associated with these programs limit the operation, funding or exit of my startup? For example, you may face a requirement to spend all of the funds in a specific geographic location, or that the government can veto the sale of the business to a third party that is not located in Canada.
Government programs and funding sources in Ontario
- Federal Scientific Research and Experimental Development (SR&ED) tax credits
- Ontario Innovation Tax Credits (OITC):
- Ontario Centres for Excellence
- Market Readiness Program (a program funded by Ontario’s Ministry of Research and Innovation, and delivered by the Ontario Centres for Excellence and MaRS Discovery District)—it has two initiatives:
- National Research Council/Industrial Research Assistance Program (NRC/IRAP)—it offers technology expertise and advisory services as well as networks/partners along with specific financial assistance for R&D activities in two core areas: youth employment strategies, and research and technology development activities details.
- Ontario Ministry of Research and Innovation —it offers various programs targeted at technology sector, including funding specifically for clean technology projects.
- Sustainable Technology Development Canada (SDTC)—they have a funding process available for clean tech and environmental opportunities.
- Natural Science and Engineering Research Council of Canada (NSERC)—it runs grant and scholarship programs.
If you decide to pursue one of these government programs, keep in mind that resources exist to help you determine if these programs make sense for your business idea. You’ll find a comprehensive listing of government funding programs in the Funding sources directory of this website. You can also access this information through advisors for each of the programs in your local area.
Canada Revenue Agency. Retrieved April 7, 2009, from http://www.cra-arc.gc.ca/menu-eng.html.
MaRS Discovery District. Retrieved April 7, 2009, from https://www.marsdd.com/aboutmars/.
National Research Council Canada. Retrieved April 7, 2009, from http://www.nrc-cnrc.gc.ca/eng/.
Natural Science and Engineering Research Council of Canada. Retrieved April 7, 2009, from http://www.nserc-crsng..gc.ca/Index_eng.asp.
Ontario Centres for Excellence. Retrieved April 7, 2009, from http://www.oce-ontario.org/.
Ontario Ministry of Research and Innovation. Retrieved April 7, 2009, from http://www.mri.gov.on.ca/english/programs/.
Ontario Ministry of Revenue. Retrieved April 7, 2009, from http://www.rev.gov.on.ca/english/.
Sustainable Development Technology Canada. Retrieved April 7, 2009, http://www.sdtc.ca/.