Government planning new fund to help SMEs boost exports

SMEs across the country may soon be able to benefit from more funding to support their export-based projects, the federal government announced last week.

Prime Minister Stephen Harper announced last week that the government plans to launch a new $50 million, five-year export market development program. The fund would provide direct financial assistance in the form of non-repayable contributions to entrepreneurs seeking to export to emerging markets for the first time.

Applicants would be required to contribute matching costs. Eligible activities under the fund would include participation in trade fairs and missions, and market research. Between 500 and 1,000 exporters are expected to receive funding from the program each year.

“Small and medium-sized enterprises (SMEs) represent 99% of all businesses in Canada and account for nearly 90% of jobs in the private sector,” read the government’s press release. “However, SMEs face greater challenges accessing financing for a variety of reasons, including having little or no credit history, few tangible assets to use as collateral and more volatile sales and earnings. This is even more so for businesses looking to export in emerging markets.”

Details such as a potential launch date and the name of the fund have yet to be announced. The government has indicated, however, that it plans to move forward with the program on an expedited basis.

The Prime Minister also announced last week an expansion of the Canadian Trade Commissioner Service (TCS) representing $42 million over the first five years and $9.25 million in ongoing support thereafter. This funding will support the deployment of an estimated additional twenty Trade Commissioners to target priority markets. The TCS provides export advice and guidance to entrepreneurs.

Looking for funding to support your export activities? Order a FundingSources Report today to explore your optimal sources of funding.

FundingAwards – Who got Funded – Week of March 16

Overall Disbursements: Funding from federal and provincial governments reached $68.1M this week, compared to $32.2M last week.

Top Sector: Academic & Research is the top sector this week, attracting $21M, 31% of the total amount disbursed.

Top Region: Ontario is the top province this week, attracting 32% of the total amount disbursed.

Top Recipients in Ontario:

  • Industry: Wolf Steel Ltd. receives $1.5M from the Southwestern Ontario Development Fund to expand and diversify its operations, while creating 176 new positions and retaining 574 jobs in the Barrie area.
  • Hospitals, Universities, Research Centres & Industry Associations: Ryerson University receives up to $10.7M over the next five years from the Canada Accelerator and Incubator Program (CAIP) to provide entrepreneurs with the resources and expertise needed to develop their business plans and seek follow-on financing.
  • Charities, Non-Profits & Public Sector: Canadian Tire Jumpstart receives $1.3M from the federal Sport Support Program. This funding will help more children across the country get involved in organized sport by removing some of the financial barriers that some parents experience.

Funding Disbursed by Industry Sector:

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Funding Disbursed by Province:

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Canadian Private Financing and M&A News Roundup – Week of March 16

  • Energy
    • Quebec-based Innergex Renewable Energy Inc. raised $491.6M construction and term project financing for the Boulder Creek and Upper Lillooet River run-of-river hydroelectric projects located in British Columbia.
  • Healthtech
    • TELUS Health completed its acquisition of Medesync, a certified EMR product, which will bring a web-based interface to TELUS’ EMR portfolio in Quebec. Medesync uses the latest cloud-based and mobile technologies to bring physicians anywhere, anytime, access to EMRs from any computer or mobile device.
  • Manufacturing
    • Armacell International S.A., a provider of engineered foams and flexible insulation foams for the equipment insulation market, announced the completed acquisition of Toronto-based Industrial Thermo Polymers Limited (ITP), a manufacturer of extruded polyethylene foam products.
  • Tech
    • Kitchener-based Clearpath Robotics raised $14M in venture capital from RRE Venture Capital, with support from iNovia Capital.
    • Ottawa-based programmable SDN switching company Corsa Technology announced an oversubscribed $16.5M Series B round of funding led by Roadmap Capital with participation from all previous investors including Celtic House Venture Partners, BDC Capital and a strategic technology company.
    • Opera Software acquired Toronto-based SurfEasy Inc., a company providing easy-to-use virtual private network (VPN) solutions for protecting customers’ online privacy and security on smartphones, tablets and computers.
    • Ottawa-based advanced threat detection company Interset closed a $10M round to expand the capabilities and accelerate adoption of its advanced threat detection platform, the company announced today. New investors include lead investor Toba Capital and Informatica. The round also included past investors Anthem Venture Partners and Telesystem Ltd.
    • Ottawa-based website creation app PageCloud raised a $2.2M seed round from MaRS IAF and Export Development Canada, as well as angels such as Tobias Lutke, CEO of Shopify, and Sarah Imbach, former Chief of Staff at LinkedIn, and more than a dozen others.
    • Toronto-based online marketplace VarageSale raised an undisclosed amount of Series A financing from Sequoia Capital.

FundingSources – Must Reads

  • BDC: BDC published its monthly economic letter. The latest indicators show that the impact of the oil price slump was felt very quickly: in January, exports again fell considerably due to the pullback in the value of energy product exports, and the inflation rate dropped again because of lower gasoline prices.
  • Employment and Social Development Canada: The governments of Canada and British Columbia applauded the completion of 45 targeted skills-training programs which helped more than 1,700 British Columbians gain the skills needed to qualify for jobs in their communities.
  • Genome BC: Genome British Columbia and the Sumas Regional Consortium for High Tech (SRCTec) have signed a Memorandum of Understanding (MOU) in an effort to collectively advance their goals of entrepreneurship and commercialization. Both organizations focus on accelerating technology innovation through to commercialization – from great idea to tangible product.
  • Manitoba: The Manitoba Government is investing an additional $600k over two years in the Manitoba Technology Accelerator (MTA) program. The not-for-profit Manitoba Technology Accelerator is dedicated to helping technology startups with support such as business mentoring, coaching, networking and investment.

QP Briefing: Sousa predicts province to gain competitive edge from launch of Chinese currency hub

By Geoff Zochodne

The imminent launch of the Americas’ first Chinese currency trading hub in Toronto will pay big dividends for the province’s economy, according to Finance Minister Charles Sousa.

The official opening ceremony for the renminbi (RMB) hub will take place Monday evening in Toronto. The exchange will let Canadian businesses convert their loonies into the Chinese currency without first trading for U.S. dollars, and vice versa – giving the province the inside track on trade with China, Sousa said.

“(Toronto) is the only jurisdiction in all of the Americas that will now be able to clear Chinese currency,” the finance minister told reporters. “That will give us a huge competitive advantage. It will enable us to build relations with China, now the second-largest economy in the world.”

Sousa will be present at the launch of the RMB hub on Monday night, along with federal Finance Minister Joe Oliver.

The RMB has eclipsed the euro to become the global finance industry’s second-most used currency. The trading hub in Canada was announced during Prime Minister Stephen Harper‘s trip to China in the fall.

The RMB hub is really three parts: a $30-billion currency swap, a clearing bank (which would be a first for the Americas) and a foreign-investor quota to buy Chinese stocks and bonds. A study done by the Canadian Chamber of Commerce in October projected Ontario’s exports to China would increase by over $1 billion in the next decade with an RMB hub.

Other RMB trading hubs exist in London, Frankfurt, Luxembourg, Hong Kong, Singapore, Taipei and Sydney.

“Using Toronto as the platform, as the go-between, is critical, not only to our brand but also speaks to the prominence of our financial sector here in Canada,” Sousa said.

Toronto is already home to the Big Five banks, as well as major insurers, brokerages and the Toronto Stock Exchange. China has selected the Industrial and Commercial Bank of China (Canada) as the designated clearing bank for the hub.

Ontario has been trying to boost its trade with the China in recent years as it attempts to diversify its economy. Premier Kathleen Wynne led a trade mission there last fall that was attracted $966 million in new investment by Chinese companies, creating 1,800 jobs in the province.

Two-way trade between China and Canada was more than $73 billion in 2013.

“This is an important aspect in terms of improving our competitiveness, for Toronto, for Ontario, for Canada, for that matter,” Sousa said.

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Funding announced for Canadian accelerators, including Ryerson

The Government of Canada is providing $13.4 million in funding over the next five years through the Canada Accelerator and Incubator Program (CAIP) to ensure entrepreneurs have access to resources and expertise, Finance Minister Joe Oliver announced yesterday.

Ryerson University, in partnership with Simon Fraser University and the University of Ontario Institute of Technology, will receive up to $10.7 million to establish a new national research-driven incubator network. The network, the Zones of Incubation and Innovation (ZI²), will aim to amplify the universities’ existing research and incubator facilities to drive technology-enabled innovation, productivity and job creation. Target sectors for the project are digital technology and gaming.

In addition, The Next 36 will receive up to $2.7 million from the CAIP. The Next 36 is a national accelerator and incubator program for promising young entrepreneurs. The funding to provide early-stage companies with access to mentoring and coaching to help develop their business plan, seek follow-on financing, and cultivate new international markets.

“The funding announced today will help ensure our best and brightest entrepreneurs and innovators get their start-up businesses off the ground, leading to more jobs and increased economic growth across the country,” said Minister Oliver. “Canada’s small and medium-sized enterprises are the engine that drives the national economy and with the assistance of our accelerator and incubator program, I look forward to seeing these new ventures compete with the world and succeed.”

The CAIP was established last year under the government’s broader Venture Capital Action Plan to help accelerators and incubators deliver services to Canadian startups.

Incubators are typically nonprofit organizations that provide financial support, business advice, mentorship, office space, and complementary services to startups, while accelerators deliver similar services, but are typically for-profit organizations owned and operated by venture capital investors whom aim to generate returns from investing in their clients.

The CAIP, which is administered by the National Research Council’s Industrial Research Assistance Program (NRC-IRAP), provides grants of up to $5 million per year per applicant, but the recipient is required to demonstrate matching contributions. Applications for this Program are currently closed.