Applicant’s Guide to the CanExport Program

About CanExport

The Government of Canada’s CanExport Program will provide up to $50 million over five years in direct financial support to small and medium-sized enterprises (SMEs) in Canada seeking to develop new export opportunities and markets, particularly high-growth priority markets and sectors. CanExport is expected to assist up to 1,000 exporters per year across the country.

Delivered by the Trade Commissioner Service (TCS) of Global Affairs Canada, in partnership with the National Research Council Industrial Research Assistance Program (NRC-IRAP), CanExport provides financial support for a wide range of export marketing activities.

The CanExport program:

  • Reimburses up to 50 percent of eligible expenses:
  • Requires that the applicant match funds on a one-to-one basis;
  • Provides a minimum contribution of $10,000 (requires that the total cost of eligible activities be at least $20,000) and a maximum contribution of $99,999 (which requires that the total cost of eligible activities be at least $199,998);
  • Is open, with few exceptions, to all industry sectors. Note: the agriculture and processed food, fish and seafood, and wine, beer and spirits sectors are excluded from CanExport because companies active in these particular sectors and looking for export support are eligible to apply through Agriculture and Agri-Food Canada’s AgriMarketing program.
  • Is open, with few exceptionsFootnote 1, to companies looking at export markets worldwide.

Eligibility

To be considered for possible funding, a firm must meet the following basic criteria:

  • Be a for-profit company;
  • Be an incorporated legal entity or a limited liability partnership (LLP);
  • Have a Canada Revenue Agency (CRA) business identifier number;
  • Have a minimum of one full-time equivalent (FTE) employee and a maximum of 250 FTE employees. The number of employees working for a company is based on the number of T4 slips produced by the company;
  • Have no less than $200,000 and no more than $50 million in annual revenue declared in Canada during its last complete fiscal year. Company’s revenues are based on the line 101 of the GST 34 return (or the FP-500-V for Quebec based applicants). Under this line, all income, including exempt supplies, taxable supplies as well as international sales, must be included.

All of the above criteria will be verify by the CRA via the business identifier number indicated in the application.

Eligible Activities

To be eligible, activities must aim to promote international business development and must go beyond the applicant’s core activities, represent new or expanded initiatives and provide an opportunity to yield incremental results. For illustrative purposes, these activities could include:

  • Business travel;
  • Participation at trade fairs;
  • Market research;
  • Adaptation of marketing tools for a new market; and
  • Legal fees associated with a distribution/representation agreement.

Ineligible activities

  • On-going core/operational activities;
  • Activities in a market where you have been exporting within the last 24 months;
  • Promotional efforts that are considered to be “normal business activities,” as opposed to the long-term development of export markets;
  • Promotion of language training or other educational services where the funding for the training is from Canadian federal or provincial/territorial government sources;
  • Investment promotion or the seeking of entrepreneurial immigrants;
  • Activities involving used equipment, unless the equipment is reconditioned or rebuilt, and the benefit to Canada would be close to or equal to benefits obtained from the sale of new equipment.

Eligible Expenses

Eligible expenditures are shared up to a maximum of 50 percent between CanExport and the applicant. When completing the budget section of the application form, you will need to identify the eligible expenses as part of one of any of these three categories: travel costs, contractor fees or consultant fees. These three categories were developed to facilitate the assessment of applications. For illustrative purposes, please see the following examples of eligible expenses for each of the three categories:

Travel costs (for a maximum of two employees or owners working for the company)

  • Only the cost of return economy class airfare from Canada for up to two employees or owners working directly for the Canadian SME for the straight routeFootnote 2 is eligible. Applicants are expected to provide reasonable, economy airfare estimates in their application and that take into account advance booking, where possible.
  • If a traveller chooses to use another form of transportation, such as bus, train or car rental, to travel to an event as an alternative to flying, the claimed expense cannot exceed what an equivalent straight route economy class airfare would be expected to cost. If the amount seems excessive, the applicant will be expected to provide economy airfare estimates.
  • CanExport offers a per diem to offset expenses for accommodation, meals and incidentals. CanExport estimates that travellers will incur a daily average of $400 per employee in expenses for accommodation, meals and incidentals and will therefore reimburse the applicant 50 percent of a Per Diem incurred per traveller, up to a maximum of $200 each working day for each person travelling for CanExport activities. Note: receipts will not be required for meals and incidentals; however, applicants will be asked to keep proofs of stay (e.g., hotel receipt, airline ticket).Those fees are covered for a maximum of two employees or owners working for the company.
  • Cost of ground transportation from point of arrival to destination (taxi or car rental).
  • Temporary visa fees for up to two employees or owners working for the company for eligible travel to a target market.

Contractor fees

  • Event registration, participation and fees, such as:
    • The cost of registration for attending a conference or a trade fair for a maximum of 2 employees or owners working for the company including booth expenses, room fees, audio-visual equipment rental, etc.;
    • Trade show space/floor rental, design and construction services, etc.;
    • Shipping and handling costs related to the participation in CanExport-financed international business development activities (for instance, promotional material, booth pop-ups, prototype or product for showcase purposes, samples, etc.);
  • Interpretation costs: language must be specified;
  • Translation service costs for marketing documents or legal documents: language must be specified;
  • Fees related to the design, editing, adaptation and printing of marketing tools for the target market;
  • Legal fees pertaining to incremental activities targeting the export of products and/or services in the new market (e.g drafting contract, preparation of documentation for intellectual property application, etc.).

Consultant fees

  • Organizing business-to-business (B2B) meeting programs and matchmaking;
  • Information gathering and analysis pertaining to a custom market research or study specific to the applicant’s products or services in their target market;
  • Legal and tax advice regarding the target market;
  • Business consultants’ costs must not exceed the 25 percent of the total eligible cost of the project.

Ineligible expenses

Though most expenses supporting international business development are eligible, as described above, following is a list of expenses that are deemed to be ineligible under this program:

  • Expenses incurred prior to the effective date of the contribution agreement;
  • Expenses incurred outside of the project phase as defined in the contribution agreement
  • Expenses for more than two employees working for the company or owners, per activity or per trip;
  • Expenses for employees working outside of Canada;
  • Travel expenses and per diem for individuals who are not either the owners or direct employees of the Canadian SME applying for a contribution, such as consultants, sales representatives, partners, clients, etc.;
  • Expenses related to the use of a private vehicle;
  • Product/ service development expenses;
  • Applicant's ongoing or core activities (i.e., fundamental operational activities);
  • Salaries and commissions;
  • Costs related to the preparation of a business plan, marketing plan, public relations plan or documentation needed to present a CanExport application;
  • Corporate overhead expenses (e.g., office space, human resources, supplies, equipment purchase, office accommodation, warehousing, long term legal services);
  • Capital costs;
  • Entertainment and hospitality;
  • Event sponsorship and membership fees;
  • Telephone, fax, data roaming and photocopying charges;
  • Expenses relating to lobbying, policy development and influence;
  • Shipping/mailing costs for material not directly related to a CanExport funded activity;
  • Website application fees, maintenance and hosting fees;
  • Value-added taxes, goods and services taxes or harmonized sales tax or any refundable portion of taxes or other items for which a refund or rebate is available;
  • Carbon taxes/credits;
  • Bonus points earned from various programs, or other barter arrangements; and
  • Any other cost that could be interpreted as subsidizing a product's selling price and, therefore, contravening Canada’s international trade obligations.

List of Eligible Markets

CanExport is open, with few exceptions,Footnote 3 to all markets. Applicants will need to provide a rationale as to why their firm want to enter this specific market (one new market only per project application) and explain that they have either never exported to this market or at have not exported to this market within the last 24 months.

List of Eligible Sectors

CanExport is open, with few exceptions, to all industry sectors. Note: the agriculture and processed food, fish and seafood, and wine, beer and spirits sectors are excluded from CanExport because companies active in these particular sectors and looking for export support are eligible to apply through Agriculture and Agri-Food Canada’s AgriMarketing program.

Limits on Funding Requests

  • Applicants may seek a minimum contribution of $10,000 per application (requires that the total cost of eligible activities be at least $20,000) and a maximum contribution of $99,999 per application (which requires that the total cost of eligible activities be at least $199,998);
  • Applicants can only have one active CanExport project at any given time and will only be able to reapply once their current CanExport activities have been conducted and all claims have been processed;
  • The maximum annual CanExport contribution per applicant is $99,999;
  • The total amount of all Canadian government funding (federal, provincial/territorial, municipal) or stacking limit, is set at 50 percent of the total eligible project cost;
  • Consultant costs for the production of a market study, for market research, for business-to-business (B2B) meetings and matchmaking are limited to 25 percent of the total cost of the activity/project.

Preparing to Apply for CanExport

In order to ensure a smooth application process and complete application:

  • 1. Ensure that your firm meets the eligibility criteria set out in section 2 of this document.
  • 2. Verify that the proposed activities are eligible as outlined in section 3.
  • 3. Verify that your proposed expenses are eligible as outlined in section 4.
  • 4. It is advisable that you have the following necessary information on hand before completing the application:
    • Legal name of the firm;
    • Operating name of the firm (if different from the legal name);
    • Canada Revenue Agency (CRA) business identifier number;
    • Firm’s web address;
    • Primary contact’s name, title or role in the organization, phone number, fax number (if applicable), mailing address and email address;
    • Preferred language of correspondence (English or French);
    • Your firm and project North American Industry Classification System (NAICS) number;
    • List of markets where you have exported in the last 24 months and your target market;
    • List of potential contacts, potential buyers and expected meetings, if you are travelling;
    • Project overview: a short description and the planned activities;
    • Evidence of organizational capacity to complete the proposed project and activities;
    • Expected results and benefits, including benefits to Canada, and explanations on how the project and activities proposed are incremental to the core business of your firm;
    • Assessment of key risks and corresponding mitigation strategies;
    • Project budget listing all activities for which the firm is seeking funding, the total eligible costs of the project, the firm’s contribution and the contribution the firm is seeking from the program;
    • Details concerning any contributions from other sources at the federal, provincial/territorial or municipal levels.
  • 5. Applicants are encouraged to discuss their international business development plans with the Trade Commissioner Service (TCS) office in their region, where they can obtain assistance in preparing for international markets and support throughout the implementation. The TCS can also help you develop your business internationally by identifying market opportunities, barriers and trends or by making introductions to qualified foreign contacts.  For more information on the TCS services offered, and to find the regional trade commissioner nearest to you who is responsible for your sector of activity, please visit the TCS’ website at http://tradecommissioner.gc.ca/trade-commissioner-delegue-commercial/search-recherche.aspx?lang=eng

Assessment Process

Once the basic eligibility criteria are met, each application will be assessed on the basis of the proposed project’s incrementality, the soundness of the export business case, its alignment with Government of Canada trade strategies and, if the information is available, on the firm’s previous history and export readiness. More precisely, all applications that meet the eligibility criteria set out in section 2 will be assessed against the following five criteria:

A. Incrementality

Demonstration that the project goes beyond the applicant’s core activities, represents new or expanded initiatives and yields incremental results. The applicant will need to provide a specific rationale as to why they want to enter a new market where they have not exported within the last 24 months. The applicant also needs to demonstrate what the expected results are, how these will be measured and what indicators will be used.

  • This criterion will be assessed on the basis of the applicant’s attestation regarding the incrementality of the proposed project as described above. If the applicant fails to provide an answer that meets this criterion, other criteria will not be assessed and the application will be refused.

B. Export business case

The soundness of the export business case as described in the application form and the alignment of the export business case with the firm’s overarching business strategy (including resources available to perform the activities and to develop the new market).

  • The project proposed is aligned with the firm’s overall business strategy (including resources available to perform the activities and develop this new market);
  • The appropriateness of the proposed activities in light of the export business case;
  • The proposed activities and the expenses are reasonable and are justified; and
  • The objectives and expected outcomes seem realistic.

C. Alignment with Government of Canada trade strategies

  • The alignment of the firm’s products or services, proposed project and activities, and target markets to Government of Canada trade strategies.

D. Market potential

  • The possible specific in-market challenges (e.g., low market potential, product attributes, local barriers and regulations) or opportunities (e.g., emerging trends, possible clients, upcoming events) for the applicant’s products and services; and
  • The proposed activities appear to be part of a sound approach for this sector in the chosen market.

E. History / export readiness

  • Only when applicable, previous performance of applicant, previous interactions and services requested by the applicant involving Global Affairs Canada and its partners will highlight companies that have proven track record of performance and successes, as well as the demonstrated capacity to undertake the proposed project activities (financially viable company, export-ready, available resources, sufficient information, product development stage, production capacity, etc.).

Decision and Contribution Agreement

Applicants can expect to obtain the results of the assessment process within 25 working days of a completed application. Global Affairs Canada will notify both successful and unsuccessful applicants, and will provide the successful applications to NRC-IRAP, which will prepare and sign the contribution agreement with each recipient. For successful applicants, an authorized officer of your firm will be asked to review and sign the contribution agreement that sets out the approved activities and their associated costs, as well as the responsibilities and obligations.

The firm must notify NRC-IRAP of any material modifications to the firm’s information, approved activities, approved costs, or any other issues that may require a change to the contribution agreement. Changes that represent a significant departure from the scope of the original contribution agreement will require the applicant to submit a new application for assessment. The applicant will be notified if a new application is required. Note: activities that were rejected based on ineligibility in the original application cannot be resubmitted.

Claiming Process for Reimbursement of Eligible Expenses

Recipients will receive detailed information via email on the claiming and reporting process, upon the return of their signed contribution agreement.

Each claim must be accompanied by a status report as described in the contribution agreement, which details the activities and outcomes of your project, measured against the approved activities and project objectives. Firms will submit their claims to NRC-IRAP for costs incurred between the start and end dates of the project phase of the signed contribution agreement.  Firms will not be required to submit receipts. However, firms are required to keep adequate financial records and segregate CanExport project costs from their normal operation costs as the program may request proof of costs incurred. The terms of the signed contribution agreement will dictate the period for which recipients are expected to keep these financial records. The segregation of project costs means the ability to provide traceability of CanExport project costs from normal operating costs. For travel costs, more precisely air travel, firms will be requested to provide estimates of economy class airfare at the time of their application, and could be asked to submit receipts of costs incurred when submitting their claim. The program will endeavor to pay claims within 20 working days of receiving the claim and associated report.

Activity Monitoring, Audit, Evaluation and Reporting

The Government of Canada will monitor activities, conduct audits and evaluations and seek information on program results.

Site visits: On occasion, Global Affairs Canada or the NRC may visit the firm at its place of business or at the site where approved projects and activities are taking place. Such visits may require access to a site for a time; program recipients will be expected to grant such access. Such visits ensure that approved activities are being carried out.

Audits: All recipients of program funding may be subject to an audit. If a firm has been selected for audit, it will be notified well in advance. Audits normally occur after the expiry date of the agreement and are carried out by the Global Affairs Canada or by professional auditing firms on behalf of the Global Affairs Canada. That is why it is imperative that firms maintain records of activities to substantiate costs incurred, including dates, times and locations of travel, the name and role of the staff traveling and the use of consultants, as well as receipts for all expenses related to the approved activities set out in the contribution agreement terms and conditions. If overpayment is identified in the audit, the firm will be asked for reimbursement. Failure to provide payment may be deemed a breach of the contribution agreement.

Evaluation: An evaluation of a program will be conducted. Program recipients may be asked to provide performance-related information to an evaluator or to respond to a questionnaire to support the evaluation.

Results reports: Program recipients must submit a status report with their claim and a post-project report at the end of the contribution agreement project phase. The firm will also be asked to report annually for three years following the end of the project, on the benefits resulting from the project.

Feedback or Questions

If you require additional information about CanExport or would like to provide us with your comments or suggestions on this Guide, please contact us at CanExport@international.gc.ca or by phone at 1-866-203-2454. For more information, you can also consult our website at www.international.gc.ca/CanExport.

Please note that Global Affairs Canada and the NRC are committed to protecting the privacy rights of individuals and safeguarding the personal information under its control. Personal information collected by Global Affairs Canada and the NRC is protected from disclosure to unauthorized persons and/or agencies subject to the provisions of the Privacy Act. Individuals have the right to the protection of and access to their personal information and to request corrections where the individual believes there is an error or omission. Individuals may contact Global Affairs Canada’s Access to Information and Privacy Protection Division to request corrections.

Glossary

Benefits to Canada: Benefits to Canada resulting from export activity may include the creation of new jobs, an increase in revenues for Canadian firms, an increase in transactions with foreign firms or an increase in Canadian gross domestic product.

Canada Revenue Agency (CRA) Business Number (BN): The BN is a nine-digit identifier for businesses to simplify their dealings with federal, provincial/territorial, and municipal governments in Canada. The number is assigned by the Canada Revenue Agency. It aims to give each registered business its own unique number.

Contribution Agreement: A contribution agreement is a legal agreement between the two parties, in this case the Government of Canada and the recipient, which sets out the terms and conditions of the funding, as well as the legal and reporting obligations of each party.

Incrementality: Incrementality is a project that goes beyond the applicant’s core activities, represents new or expanded initiatives and yields incremental results.

Legal name: The legal name of your business is the name you choose when you apply to incorporate a company under the Canada Business Corporations Act. If you do not choose a name, you are assigned a numbered name and this is your legal name.

Market: The term “market” refers to a foreign country in which a firm may conduct export activity. In the context of the program, “target market” refers to a foreign country where a program applicant plans to carry out a project (i.e., export activity). Applicants may only select one market in which to carry out their project and cannot have conducted export activity in that market for at least 24 months.

NAICS number: The North American Industry Classification System (NAICS) is used by businesses and governments to classify and measure economic activity in the United States, Canada and Mexico. NAICS is 6-digit code system that is currently the standard used by federal statistical agencies in classifying business establishments according to the similarity in the processes used to produce goods or services. Each and every company will have a primary NAICS code. This number indicates a company’s primary line of business. A company’s primary NAICS code is the code definition that generates the highest revenue for that company at a specific location in the past year.

Operating name: Your operating name is the name you use in your day-to-day activities and to advertise your business. You only need to provide your operating name if it is different from your legal name.

Other government assistance: Other Canadian government sources of funding include funding provided by federal, provincial/territorial, and municipal governments.

Primary contact: The primary contact is the employee of your firm designated as the main contact point for communications regarding your firm’s application. The primary contact must have full legal signing authority to sign the application and contribution form.

Project: For the purpose of the program, a “project” is defined as the grouping of activities to be undertaken in the target market, during the period established in the approved application.

Qualified foreign contacts: Qualified foreign contacts may include foreign buyers and partners. If a company requires assistance from the Trade Commissioner Service in order to identify and qualify key contacts, it should visit the following websites:

http://tradecommissioner.gc.ca/exporters-exportateurs/find-qualified-contacts-trouver-contacts-qualifies.aspx?lang=eng
http://tradecommissioner.gc.ca/how-tcs-can-help-comment-sdc-peut-aider.aspx?lang=eng

Revenues from international sales: The revenues from international sales cover the income from the sale of goods and services to non-Canadian residents as well as revenue earned from interest and dividends on foreign assets.

Stacking limit: The stacking limit refers to the maximum level of total Canadian government funding (federal, provincial/territorial, and municipal) a successful applicant can receive towards the total eligible costs of a project.

Footnotes

Footnote 1

Activities in all countries are eligible, provided Canada has not imposed trade or economic sanctions that apply to the proposed activities in a given country. Exceptions also apply for activities with individuals or entities against which Canada has imposed sanctions. See listing of Current Sanctions Imposed by Canada.

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Footnote 2

Straight route is defined as the route between the employees or owners’ home in Canada and the location of the approved CanExport activity, without any additional stops/legs/destinations for non CanExport -related purposes (layovers or stops are acceptable when they are for the purpose of securing a more economical price).

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Footnote 3

Activities in all countries are eligible, provided Canada has not imposed trade or economic sanctions that apply to the proposed activities in a given country. Exceptions also apply for activities with individuals or entities against which Canada has imposed sanctions. See listing of Current Sanctions Imposed by Canada.

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