Areas of
Practice

Ottawa provides loans and ‘micro-grants’ to small- and medium-sized enterprises to go digital

Friday, March 04, 2022 @ 11:32 AM | By Cristin Schmitz


Ottawa is offering up to $100,000 in interest-free loans to assist small- and medium-sized-sized enterprises (SMEs) that want to go digital to boost their bottom line — for example, by adopting new customer relationship software, digital inventory management systems, network security software or other technologies such as artificial intelligence, machine learning and robotics.

The $4-billion Canada Digital Adoption Program, first announced in the 2021 federal budget, comprises $1.4 billion in grants and advisory services to SMEs from the government, and up to $2.6 billion in loans from the Business Development Bank of Canada to help businesses cover the costs of implementing new digital technologies.

The digital adoption program comprises two separate streams of funding: a $2,400 “micro-grant” for up to 90,000 smaller, consumer-facing businesses (including in service industries) which are registered or incorporated and have at least one employee to cover costs related to e-commerce adoption. The government has established a network of service providers to provide guidance to small businesses on how to best grow their online presence.

The $2,400 micro-grant can be used to cover the costs associated with a range of activities, including website development, search engine optimization, subscription fees for e-commerce platforms and social media advertising.

Small- and medium-sized businesses that want to improve productivity and become more competitive in the digital marketplace can turn to the second stream of funding, dubbed “Boost Your Business Technology.” Eligible businesses must have between one and 499 employees, and annual revenue between $500,000 and $100 million. Up to 70,000 enterprises will be supported by Boost Your Business technology funding, a March 3 government backgrounder from the Department of Innovation, Science and Economic Development states.

The government is providing enterprises with access to a “digital needs assessment” to help them better understand their digital readiness. SMEs can apply for a grant to cover 90 per cent, up to a maximum of $15,000, of the cost of developing a digital adoption plan. The government has created a roster of expert digital advisory service providers available to help enterprises build their plan.

To support the implementation of their individualized digital adoption plan and the acquisition of new technologies, SMEs will be able to apply for an interest-free loan of up to $100,000 from the Business Development Bank of Canada.

“We have partnered with Magnet, a not-for-profit organization dedicated to connecting businesses with young Canadians looking for work, to employ up to 16,800 students and young Canadians to support businesses looking to adopt digital tools and technologies,” a March 3 press release from the Prime Minister’s Office states.

Eligible enterprises can also apply for a wage subsidy of up to $7,300 to retain a post-secondary student, or recent post-secondary graduate, as part of a youth placement government program. The youth work placement is designed to provide additional support for SMEs undertaking their digital transformation. “Magnet will use its social innovation platform to pair students or recent graduates trained to support digital transformation with SMEs to help them with their digital adoption plans,” the Prime Minister’s Office said.

If you have any information, story ideas or news tips for The Lawyer’s Daily, please contact Cristin Schmitz at Cristin.schmitz@lexisnexis.ca or call 613 820-2794.