Small businesses in Canada can expand their horizons through a new program by the Canadian Trade Commissioner Service (TCS) that offers them an incentive to diversify their export markets. Called CanExport, the program provides, from now until the end of March 2020, $11-million per year in contributions to small and medium-sized enterprises (SMEs) across Canada that are seeking to develop their exports to a new market. The application process is simple with a quick turnaround. Applications are entirely done online and are assessed based on the information submitted by the company within 25 business days. The program is administered by the TCS, in partnership with the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP).
CanExport shares the cost of pre-approved eligible expenses for initiatives that aim to develop new markets. It is expected to help hundreds of exporters per year across the country to better compete in the global economy. The non-repayable contributions will be determined on a cost-sharing basis and can represent up to 50 percent of eligible expenses, which can include for instance travel costs, event registration, translation and contractor fees. Ranging from $10,000 to $99,999, approved contributions are made to successful SMEs via the reimbursement of certain expenses based on status reports and claims. The remainder of the funds can come from other sources, but the total of all government assistance cannot exceed 50 percent of the expenses for the project. As such, applicants need themselves to provide funds covering at least 50% of the eligible costs in order for their project to qualify.
With the help of CanExport, Canadian SMEs are encouraged to look outward Canada to expand their export capabilities. CanExport is intended to build stronger and more competitive Canadian capacity to effectively compete in the global economy, by connecting SMEs with the tools and resources they need to succeed in a new market. CanExport compliments the large spectrum of services that the TCS already offers each year to thousands of Canadian exporters. This program intends to bring companies literally to the market and to provide a “bridge” between the assistance that companies get preparing for international markets from Regional Offices of the TCS across Canada and the help they receive from Canadian Embassies and Consulates abroad, such as making introductions and facilitating contracts. Many SMEs are not used to exporting or they have experience only with more traditional markets and are concerned about the risk of developing new opportunities that can boost their prospects abroad. These new endeavors represent a certain level of risks for these companies, but CanExport is a way for the Government of Canada to share these risks so that Canadian SMEs have a greater interest to explore new markets, get out of their comfort zone and pursue new opportunities.
Is your company eligible?
To be considered for CanExport funding, a firm must:
- Be a for-profit company in Canada, either incorporated or a limited partnership;
- Have a valid CRA business identifier number;
- Have at least one (1) and up to 250 full-time equivalent employees that can be verified by the CRA based on payroll accounts;
- Have $200,000 to $50 million in annual revenues, which can be verified by the CRA based on the most recent GST declarations of the company.
Is the market your company targets eligible?
It is important to mention that the objective of this program is to help SMEs export to a new target market, which the program guidelines define as a foreign country where the applicant has not exported or had locally based operations for at least 24 months. It is therefore key that applicants be able to demonstrate that the market they target is a country where they have not exported. When opportunities exist for companies to expand in markets where they are already exporting, though a financial support from our program is not possible, we still strongly encourage them to contact the TCS to obtain assistance in order to prepare for international markets and receive services and support throughout the implementation activities. The TCS can also help develop your business internationally by identifying market opportunities, barriers and trends or by making introductions to qualified foreign contacts. For more information on the TCS services offered, and to find the regional trade commissioner nearest to you who is responsible for your sector of activity, please click here.
Beyond the requirement for the market to be a new one for the applicant, the program is otherwise open to all markets, except in countries where sanctions apply to the planned activities. Though many experienced exporters might contemplate a project to develop a more difficult market, new exporters may be looking to fairly traditional countries as a first step to diversify its customer base. In fact, for many companies that have never exported before, even entering the U.S. market can be quite an adventure and might require some financial support.
Are your activities eligible?
Proposals will be evaluated based on the viability of the applicant’s export business case and whether the project is expected to yield incremental results and benefits to Canada. There will also be an emphasis on whether the activities align with the Government of Canada’s trade strategies and on whether there is a market potential in the targeted country for the products or services the applicant intends to export. The assessment could also, when applicable, include elements such as the company’s export readiness and business history. The project and export business case, as illustrated via the online application, can include many different types of activities, all of which could be considered eligible as long as they meet the following: aim at promoting international business development; go beyond the company’s core-business activities; are clearly linked with the applicant’s long-term international business development strategy for the chosen target market; bear potentially significant benefits for Canada and for the company’s growth; are supported by sufficient detailed information on the nature and extent of the proposed expenses; and, of course, as long as the proposed course of action is strongly justified by the rationale outlined in the application. Examples of eligible activities could include, but not be limited to, the following: travel to meet with potential clients or agents; attendance at trade fairs, seminars and conferences; participation in trade missions; the development or adaptation of marketing tools to suit new markets; legal fees involved in agreements with local partners and distributors; consultant fees for a custom-market study, etc.
Guest Blog Author: Elise Racicot, CanExport Program Manager, Global Affairs Canada
Have questions regarding the eligibility of your company and its activities? Have you heard or considered the CanExport grant before reading this blog? Let us know in the comments below or email us at Ask Your Broker.