Government grants are one of the most misunderstood sources of funding available to Canadian businesses. Every year, billions of dollars are distributed through federal, provincial, and regional funding programs designed to support business growth, innovation, hiring, and expansion.

Yet many businesses never apply.

Canada is home to roughly 1.07 million small businesses, however a 2023 report from Innovation, Science and Economic Development Canada found that 93% of small businesses do not take advantage of these programs.

Why? Because common misconceptions about grants make them seem confusing, competitive, or unrealistic to obtain.

In this guide, we’ll break down 10 common myths about government grants in Canada, explain the truth behind them, and help businesses better understand how funding programs actually work.

If you’d like to explore more misconceptions about grant funding, check out our previous blog covering five common myths. This article builds on that discussion and expands on additional myths businesses often encounter.

Myth #1: Government Grants Are Only for Startups

Many business owners believe grants are primarily designed to help startups launch their first product or idea.

The truth:
While some programs do support early-stage businesses, many government grants are actually targeted toward growing and established companies.

There are Canadian government grants available for any size business. Some grants cater to companies that are beyond the start-up stage. Our service offerings also reflect the range of grants available. Pre-revenue and early-stage companies can use our self-serve platforms GetGranted or GrantedStarter to find grants geared to them, while growing-stage companies can use our GrantedPro service for a full consulting package.

Funding is often available for businesses that are:

• Hiring new employees
• Training existing employees
• Entering new markets
• Scaling production

Many programs specifically require businesses to have existing revenue or operating history.

Myth #2: Only Tech Companies Receive Grants

Technology companies tend to receive attention when new grants are announced, which can create the impression that funding is limited to the tech sector.

The truth:
Government funding supports a wide range of industries, including:

• Manufacturing
• Construction
• Defence
• Agriculture
• Clean energy
• Mining
• Tourism
• And more!

Many grants are actually based on business activities, not industry type.

For example, companies hiring staff, expanding exports, or adopting digital tools may qualify regardless of sector. At Granted, we work with businesses across many industries to help them discover and pursue the funding opportunities that fit their activities.

Myth #3: Grants Are “Free Money”

This is one of the most common misconceptions about government funding. 

The truth:
While technically, grant funding is not expected to be returned, most grants are cost-sharing programs. This means businesses contribute part of the project cost while the government reimburses a portion of the expenses.

Typical funding structures include:

• 30-50% cost coverage
• 50-75% reimbursement for certain programs
• Fixed contributions toward specific activities

Even if a grant covers 100% of the costs, businesses usually receive funding after expenses are incurred and documented. This means it’s generally good practice for businesses applying for grants to have the capital available to fund the project upfront.

Myth #4: Grant Applications Take Months to Complete

Some business owners avoid grants because they believe the application process is extremely time-consuming.

The truth:
While some complex programs require detailed applications, many grants have simple application processes.

Common application requirements include:

• Business information
• Project description
• Budget estimates
• Supporting documents

For many programs, preparation becomes much easier once businesses standardize their documents and project planning.

This is something we’re addressing with the upgraded version of our GetGranted platform (coming soon). Our proprietary scoring system uses a unique algorithm to calculate a percentage match for every grant opportunity, factoring in not only eligibility but also how easy the grant is to apply for.

This helps businesses quickly identify their strongest opportunities, prioritize with confidence, and focus their time where it matters most.

Sign up for the waitlist to get early access to GetGranted.

Myth #5: Small Businesses Don’t Qualify

Some entrepreneurs assume only large corporations receive government funding.

The truth:
Many Canadian grant programs are designed specifically for small and medium-sized businesses (SMEs).

In fact, SMEs are often prioritized because they:

• Drive job creation
• Support regional economic development
• Encourage innovation

Businesses with fewer than 500 employees commonly qualify for many funding programs.

At Granted, we specialize in helping SMEs secure funding, demonstrating that this myth couldn’t be further from the truth.

Myth #6: You Can Only Receive One Grant

Some companies believe receiving one grant disqualifies them from others.

The truth:
Businesses can often access multiple grants over time, provided the funding programs support different activities or projects.

For example, a company may receive funding for:

• Hiring employees
• Export expansion
• Technology upgrades
• Employee training

Many businesses build long-term funding strategies that combine several programs.  At Granted, we help businesses optimize their funding strategies through grant stacking, identifying multiple opportunities that can support the same or complementary projects.

Myth #7: If You’re Rejected Once, You Won’t Get Funding

Being declined for a grant can make businesses think they are permanently ineligible.

The truth:
Grant programs frequently change. Eligibility criteria, budgets, and application timelines vary between programs.

A business rejected from one program may still qualify for others.

Sometimes approval simply depends on:

• Project timing
• Program availability
• Application details

Myth #8: Grants Are Only for Research and Development

Canada is well known for R&D funding programs, which can make it seem like research projects are the only activities supported.

The truth:
R&D grants are only one type of grant that is available out there. Most grants fund practical business initiatives such as:

• Hiring employees
• Workforce training
• Equipment purchases
• Export market development
• Digital transformation
• Sustainability projects

These types of programs are often more accessible and easier to apply to than R&D grants.

Myth #9: Grants Are Too Competitive

Some businesses assume funding is limited and impossible to secure.

The truth:
While certain programs are competitive, many operate on a rolling or eligibility-based approval process.

This means businesses that meet program criteria may receive funding as long as the budget remains available.

There are hundreds of grant programs available that businesses don’t know about and don’t apply for. Success often depends on finding the right program that aligns with your project. By signing up for our self-service portals, you can access the most comprehensive list of Canadian grants available for you, including the secret gems most businesses don’t know. 

Myth #10: There Aren’t Many Grants Available

A common belief is that only a handful of grants exist each year.

The truth:
Across federal, provincial, and regional programs, hundreds of funding opportunities exist annually.

These programs support activities such as:

• Hiring and training employees
• Expanding internationally
• Purchasing equipment
• Improving sustainability
• Investing in technology

The real challenge for most businesses isn’t availability – it’s finding relevant grants and tracking deadlines.

How Businesses Can Improve Their Chances of Getting Grants

Businesses that successfully secure government funding typically follow a few best practices:

✅ Plan projects in advance
✅ Keep financial and business documents organized
✅ Monitor new funding programs regularly
✅ Align projects with program goals
✅ Apply early when programs open

Preparation and awareness can significantly increase the likelihood of approval.

Government grants in Canada can play an important role in supporting business growth, hiring, innovation, and expansion. However, myths and misunderstandings often prevent businesses from exploring opportunities that could benefit them.

Understanding how grants actually work – and separating fact from fiction – helps businesses make smarter funding decisions and unlock new growth opportunities.

For companies looking to scale, invest, or expand, exploring available funding programs could provide valuable financial support for future projects.

Let’s get you funded

At Granted Consulting, we specialize in guiding Canadian companies through the funding process – making it simpler, faster, and far less stressful. Our team can help you access this program and other government funding opportunities so you get the support your business deserves. We stay on top of the ever-changing landscape of grants and funding, so you never miss an opportunity.

👉Join the waitlist for the upgraded GetGranted: Our upcoming, revamped platform for finding grants and funding tailored to your business, you can skip complex forms, get claim reminders, and receive smart funding matches and expert tips to help you make the most of every opportunity.

 👉Start today by trying our Grant Calculator to instantly see how much funding your business could qualify for.

With the right support, your business can secure funding, reduce costs, and keep growing despite challenges.