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CanExport SMEs 2022 Updates

Are you looking to expand your business into a new market outside of Canada? You’re in luck!

The CanExport SMEs program exists to provide support for Canadian small to medium enterprises (SMEs) as they look to expand to new markets. An SME is defined as a company that has less than 500 employees. The goal of this business expansion grant is to help companies develop new export opportunities and markets – especially high-growth markets. This federal grant program is unique and highly sought-after because it’s industry-agnostic, and companies all across Canada can apply.

We work with our clients to develop grant strategies that reflect their business goals – and the program’s goals. Our goal is to create a strategy that demonstrates how their market expansion project helps the grant meet its goal: building the presence of Canadian goods and services in foreign markets and fostering international competitiveness. We are proud to uphold our 98%+ success rate with market expansion grants.

Who is eligible to apply?

With any program, there are criteria that must be met to apply. Let’s take a look at the eligibility requirements for CanExport. Your company must:

  • Be for-profit, 
  • Be an incorporated legal entity registered in Canada,
  • Have a Canada Revenue Agency (CRA) business number,
  • Employ less than 500 full-time staff, and 
  • Have between $100,000 to $100 million in annual revenue declared on your last tax reporting year.

2022 CanExport changes

As of the government’s new fiscal year, there are a few important changes that could affect your project proposal. Let’s dive in!

  • Before October 2021, the CanExport program covered 75% of the market expansion project up to $75,000. Now, the small business expansion grant has reduced its coverage to 50% up to $50,000. 
  • There used to be a limitation on consulting and advertising costs, now there is no limit for either one. 
  • Travel is back! As of April 2022, projects may include travel activities after two years of remote-only events. 

What expenses does CanExport cover?

To support small businesses in their expansion efforts, CanExport covers six types of expenses. The federal grant program arranges them from A to G, as follows:

A: Travel Expenses

A maximum of two people per organization can travel to the international market for trade shows, or to meet with leads. For example, if approved, the business expansion grant will cover two staff to go to one event in Germany, as well as two other people to meet with leads in Germany. Additionally, if visas are required, you could get those costs covered.

B: Tradeshows and conferences

Not only does CanExport support the costs of attending or exhibiting at an event, but it’ll also match the cost of booth rental, construction, A/V equipment, and shipping!

C: Marketing and translation

One of the more popular activities, the business expansion program will help with costs related to creating marketing materials, running ads, web development, and translation. It’s important to note that everything must be specific to your target market. For example, if you’re targeting Germany, you could include the expense to build a Germany-specific website, but not the cost of running your domestic website.

D: Interpretation services

If you are targeting a market wherein the official language is not English such as Japan or the Philippines, this federal grant program will support interpretation services. This includes things like meetings with leads, networking with potential clients, and interpreting presentations.

E: IP protection

Something that business owners often overlook is the need for IP protection or certification. Even in expanding to the US, it’s important to make sure that your intellectual property is properly protected. CanExport supports parts of the IP protection application fees.

F: Consultant for business, legal, and tax advice

Having an expert who understands a specific market is very valuable to your market expansion efforts. CanExport supports activities related to business, legal, and tax experts to give advice on their respective domains. This includes lawyers, business development specialists, sales strategists, marketers, and more.

G: Consultant for market research and lead generation

Another type of consultant you could include in your market expansion project is those that specialize in lead generation and associated activities. CanExport will support the costs for a consultant to identify leads, conduct market research, facilitate B2B contacts, and more!

This is just a snapshot of what the CanExport SMEs program will support. For a complete list of approved activities, please refer to the Applicant’s Guide.

What expenses does CanExport not cover?

While it is important to understand what you can apply for, it’s equally important to know what you cannot apply for. Including ineligible expenses in your application puts your whole proposal at risk because it demonstrates you don’t understand the program requirements.

Here are some key things that this market expansion grant does not cover:

  • Expenses that were paid before the government grant approval was received or outside the project proposal dates
  • Sourcing or development activities 
  • Setting up an office
  • Domestic or foreign staff costs
  • Overhead costs

If you’re looking to conduct R&D with a partner in an international market, CanExport SMEs is not the grant for you. But wait! There’s a different program, CanExport Innovation, that supports R&D activities for companies seeking to develop a new product or service with an international partner.

What markets can you target?

For a country, or ‘target market’, to be eligible, it must also meet certain criteria. The purpose of these criteria is to ensure that the market is new to your company, and not part of your current business operations. You must have:

  • Less than $100,000 in sales in the market, or 
  • It represents less than 10% of your company’s total sales, which includes domestic and international.

If you meet these requirements, you must also make sure that Canada does not have sanctions against the country in question. To see which countries this includes, check out this page.

With this market expansion grant, you can target a maximum of five target markets. It’s important to note that some countries have been broken down into multiple markets given their size and population. This includes Brazil, China, India, and the United States.

Our team has a 98%+ success rate in securing market expansion grants. We make sure our clients are supported through the entire process from planning, all the way through reporting.

Looking to expand to a new international market? Head over to our Grant Quiz to get in touch with one of our Grant Angels!