Canada’s six regional development agencies (RDAs) will focus $961.4 million in federal COVID-19 relief funding on companies and industry sectors critical to the economy in each region.
The funding is aimed at small- and medium-sized enterprises that have been unable to access the government’s existing support measures. The Regional Relief and Recovery Program was initially announced in April and on May 13. Economic Minister Mélanie Joly provided details on how the money will be distributed: $675 million for RDAs and $287 million for the Community Futures (CF) Network of Canada (its funding will be distributed through the RDAs):
- Western Economic Diversification Canada: $304.2 million
- Federal Economic Development Agency for Southern Ontario: $252.4 million
- Federal Economic Development Initiative for Northern Ontario: $49.5 million
- Canada Economic Development for Quebec Regions: $211 million
- Atlantic Canada Opportunities Agency: $110 million
- Canadian Northern Economic Development Agency: $34.3 million
Regional and rural businesses not eligible to access existing federal support programs, such as the Canada Emergency Business Account and Canadian Emergency Wage Subsidy, will be able to apply to the RDAs for loans of up to $40,000 – 25% of which is forgivable if paid on or before Dec. 31, 2022.
At the May 13 news conference, Joly specifically encouraged technology startups to apply to their respective RDAs for funding.
Western Economic Diversification (WD) will support businesses that help to retain diverse and valuable talent; maintain sector knowledge and skills; maintain capital flow and critical supply chains; increase capacity to withstand supply chain disruptions; protect technologies and processes that improve resilience, productivity, and competitiveness, and protect vital intellectual property, Mark Feldbauer, WD’s communications manager, said in an email to Research Money.
In addition to offering loans of up to $40,000, WD may provide fully repayable, interest-free loans of up to $1 million “to businesses that can demonstrate a meaningful contribution to the western Canadian economy, and are experiencing liquidity issues,” he said. These companies may not have accessed other federal relief programs, or may have accessed them but require additional funding to mitigate cash flow pressures.
WD already has received a “significant volume” of applications, Feldbauer said. “The department expects to provide approval decisions to the first round of successful applicants requesting up to $40,000 in the coming days, while subsequent rounds of approvals and notifications will be made in the coming weeks.”
The Federal Development Agency for Southern Ontario (FedDev Ontario), in addition to loans of up to $40,000, may provide fully repayable, interest-free loans of up to $500,000 to businesses, Kerri Dunning, director of communications for FedDev Ontario, said in an email to R$. The maximum amount available for pre-revenue firms that have received venture capital or angel investment support is $250,000.
Dunning said if there’s significant demand for funding, FedDev Ontario may give priority to SMEs that are significant employers in communities, or operate in critical industries such as manufacturing, technology, tourism and others key to the regions and local economies.
Priority for funding may also be given to support the government’s commitment to inclusive growth, such as for women, Indigenous peoples, youth, persons with disabilities, visible minorities, newcomers, LGBTQ2 community, and Official Language Minority Communities, Dunning said.
Funding program expected to save at least 6,700 rural businesses
While the RDAs will target mainly businesses in urban centres, the grassroots and volunteer-based CF will focus on smaller rural businesses across Canada affected by the COVID crisis.
“Overall, we expect that at least 6,700 businesses across rural Canada will be maintained through the Community Futures-delivered portion of this fund,” Patty Hughes, president of CF, said in an interview.
Businesses in rural and remote communities can apply, at any of the 268 CF offices across the country, for loans of up to $40,000 – $30,000 of which is repayable, she said.
All decisions on loans will be made by each community’s CF office, by a volunteer board of directors, Hughes said. “They are local people in every community. They know what the needs are and understand what some of these businesses are going through.”
Funding has already started to flow, Hughes said. “If a business comes in to one of our local CFs and has everything in order, we can write a cheque within 24 hours.”
CF’s $287.2 million is being allocated across the regions as follows:
- Western Canada: $95.7 million
- Southern Ontario: $39.4 million
- Northern Ontario: $25.5 million
- Quebec: $71.3 million
- Atlantic region: $43.3 million
- Northern region: $12 million ($4 million per territory).