Canada will spend $4 billion to finance small and medium-sized businesses
Loans and grants will go to 160,000 business owners as part of Canada's digital inclusion program.
Canadian Prime Minister Justin Trudeau has announced the launch of a digitalization program. The application process began this Thursday.
The program will run for four years, during which the Canadian government plans to allocate $4 billion CAD to help 160,000 small— and medium-sized business owners. According to Statistics Canada, such businesses employ about four-fifths of the country's workforce.
The Canadian government hopes the program will boost the competitiveness of domestic companies in a new global environment in which online shopping and virtual doing business have become more commonplace.
A total of 2 streams will be created at Business Development Bank of Canada, through which owners will be able to apply for financing:
- "Expand Your Business Online".
This program is aimed at small businesses with at least one employee. They will receive $2,400 CAD in microgrants to offset the costs of website development, search engine optimization, e-commerce platform subscription fees and social media advertising. In addition to funding, they will initially be assisted by a dedicated network of youth advisors. There will also be about 11,200 jobs for young people. It is planned that about 90,000 small businesses will be supported under the program.
- "Improve your business technology."
The maximum grant will be $15,000 CAD. It can cover 90 percent of a company's digitalization costs, but only companies with revenues between $500,000 and 100 million CAD will qualify. The total number of staff must not exceed 500 employees. To apply, applicants will also have to submit a customized digitalization plan for the company.
The government said this grant could be spent in areas such as new customer software, digital inventory management systems, network security enhancements and robotics. Up to 70,000 small and medium-sized businesses will receive support under this program.
In addition to grants, small and medium-sized business owners will be able to receive interest-free loans of up to $100,000 CAD from Business Development Bank of Canada.
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The government also said it is working with Magnet, a non-profit organization that connects businesses with young Canadians. Through it, the government hopes to employ up to 16,800 students and young Canadians. The program includes a wage subsidy of up to $7,300 CAD for employers.
Digitalization of businesses could lead to higher sales and lower operating costs, which are essential to the survival of the Canadian economy as the Bank of Canada charts a course to curb inflationary growth. After the Central Bank raised its key rate, about 20% of small businesses in a Statistics Canada survey said they expect sales to decline over the next 6 months.
