Agriculture and food, collectively, is Canada’s largest manufacturing sector and boasts a contribution of $110 billion to the country’s Gross Domestic Product (GDP). To maintain and strengthen the organizations in this sector, both federal and provincial levels of government provide a substantial amount of support for a diverse range of initiatives to streamline, develop, and grow agri-food and beverage businesses. This year, the government launched a $3 billion program called the Canadian Agricultural Partnership(CAP) – a five-year funding initiative that supports new, small, medium and large agri-food and beverage businesses in the achievement of their goals, from market development and creating products to improving processes, creating efficiencies and developing innovations. Funding is provided through a federal-provincial partnership, which means that grants can be accessed from both levels of government.
Under the CAP program, manufacturers and producers of agricultural and food products and beverages are eligible for funding related to activities that will improve their productivity, efficiency, market reach, and growth, while impacting the economy through job creation and improved return on investment (ROI). Priority businesses for this program are food and beverage manufacturers and processors, or those businesses that are actively engaged in the transformation of agricultural commodities, food, beverages, or agricultural based bio-products. These also include food and beverage brands which do not possess manufacturing facilities, as well as co-packers that manufacture on behalf of such brands. In addition, licensed cannabis businesses can also qualify for CAP funding.
Ineligible candidates include retailers, restaurants, caterers and food service businesses, as well as packaging companies and cigarette manufacturers.
Types of opportunities
Available in most provinces, the CAP program helps businesses secure funding of up to $250,000 per application for the following activities:
- Business assessments;
- Business plans;
- Marketing plans;
- Labour productivity plans;
- Development of new products or processes;
- Improvement and development of Canadian and international markets;
- Purchase and implementation of technology and equipment to improve labour productivity (including building modifications and expansions);
- Enterprise resource planning and supply chain management systems; and
- Food safety and traceability system improvements.
Capital expenditures, contracted services and employee labour, as well as training and implementation costs, are all eligible for reimbursement.
Additional government programming is available in the form of sector-specific funding within the agri-food and beverage industry, such as grant programs supporting dairy and milk processors, co-ops and similar organizations, and farm businesses. These programs are in place not just to support the growth of agri-food and beverage businesses, but also to boost the economy and allow Canada to maintain its position as one of the top five producers and exporters of agricultural commodities in the world.
The Dairy Processing Investment Fund provides funding to milk processors that are improving processes, enhancing productivity, growing their business through building modifications and expansions, and developing products and markets. The maximum amount of funding per capital investment project is $10 million. Funds can be allocated to all types of costs related to the above-mentioned eligible activities.
Similarly, the Matching Investment Fund offered by the Canadian Dairy Commission provides up to $150,000 in funding to support milk manufacturers in developing products, acquiring technologies to maximize milk usage in their products, and purchasing services from specialists and experts in relation to many areas of the product development process, including management and market research, dairy and food science, technical services, and food processing.
Another sector that has specialized programming through the federal, provincial and territorial governments is fisheries. Set to launch in late 2018, the Atlantic Fisheries Fund will be a $400 million initiative over seven years that will support projects demonstrating innovative processes, technologies and infrastructure, as well as research and development collaborations between industry and academia to enhance fish and seafood product quality and sustainability. More information on the program will become available prior to implementation. Additional programming will be available for developing commercial fisheries enterprise governance and business management skills, clean technology adoption programs, and initiatives to build capacity in commercial fisheries operations.
While the application process varies by program, there are a few similarities and general requirements that need to be met in most cases. In addition to the project plan, applicants must provide a market plan, competitive analysis, detailed budget that includes ROI calculations, and economic impact assessment as part of the application package. Some programs also require additional registration and enrollment forms to be included in the application package.
Each program operates differently with respect to the timing for applications and funding. While CAPoperates on an intake by intake basis, many of the sector specific grants accept applications on an ongoing basis.
As with almost all government grant programs, applicants are required to apply for funding a minimum of 3 to 6 months prior to the start of the eligible project. Any costs listed in the application cannot be incurred prior to government approval; otherwise, they will become ineligible.
Government grants are one of the best ways of financing new projects and initiatives. Your competitors are undoubtedly benefiting from grants and incentives, especially within the agri-food industry, where billions of dollars have been set aside to specifically help grow businesses within this sector. Having said that, just because your company meets all published eligibility criteria, it does not necessarily mean that your application will be successful. Grants are discretionary, have fixed budgets to be allocated, and in some cases, can be very competitive. As such, below is a list of important considerations and pitfalls to avoid when applying for grants:
- Timing is crucial. You must apply before making any legal or financial commitments to fundable projects.
- Lack of knowledge of available funding. Projects and initiatives might be eligible for more than one government program. Understanding which grants are most appropriate and how to stack programs is necessary in order to optimize the funds you can receive.
- Ignoring the key objectives under the program. Each grant program was created to deal with one or more specific government priorities. Knowing and addressing these objectives in order of priority can make the difference between a successful application and a denied application.
- Failing to know how the government evaluates grant applications. By knowing what the government is looking for, you can emphasize certain parts of your projects and initiatives and improve your chances of success.
- Not providing sufficient information. Any requested documentation, whether it is financial projections or a marketing study, must be included. Exclusion of any items from the checklist available for a particular grant can result in an unfunded project.
- Applications often have set character limits. Respecting the character limits by neither exceeding nor providing too little detail will help with the success of all applications.
- Knowing your market and competition can help impact the outcome of your application. Successful applicants know their markets and demonstrate their competitive advantages.
- Inadequate risk assessment. Every project has risks. Whether it is developing a niche product with a small demand or implementing a system that may not produce the optimal result, it is in your best interest to outline these risks and how to mitigate them, in order to let the funder know that you’ve done your research and are prepared for any undesirable outcomes.
A well-rounded project is one that takes into consideration all aspects of the business and not just the technology, product or system to be implemented. An application that touches upon the current state of the business, financial considerations, project(s) to be implemented, expected growth (i.e., job creation, revenues, markets and trade, and other economic benefits), and the environmental impacts, as well as avoiding the pitfalls noted above, will show the merits and benefits of funding of your project(s).
Manager, Government Grants