Frequently Asked Questions – CanExport
Who is delivering the CanExport program?
CanExport is being co-delivered by the Government of Canada through an administrative arrangement between Global Affairs Canada’s Trade Commissioner Service (TCS) and the National Research Council of Canada’s Industrial Research Assistance Program (NRC-IRAP). NRC-IRAP has been chosen as a partner for its expertise in providing support and funding to Canadian SMEs.
Under this arrangement, NRC-IRAP will provide the on-line application system and determine initial eligibility. The TCS will assess the business case and make a decision on the application, determine the level of funding, inform applicants of the decision and answer all questions pertaining to the CanExport program. NRC-IRAP will then prepare the contribution agreement for approved applications, process and pay expense claims, collect the performance information and conduct recipient audits.
What are CanExport’s eligibility requirements?
To be eligible, your firm must meet these basic requirements:
- Be a for-profit company;
- Be an incorporated legal entity OR a limited liability partnership (LLP);
- Have a Canada Revenue Agency business identifier number;
- Have a minimum of one full-time equivalent (FTE) employee and a maximum of 250 FTE employees; and
- Have no less than $200,000 and no more than $50 million in annual revenue declared in Canada.
How will applicant’s eligibility be verified?
The eligibility verification process is as follows:
- A new application is received.
- The business number (BN) and legal name of the company are sent to the Canada Revenue Agency (CRA).
- The CRA verifies that:
- the BN is valid;
- the BN belongs to the legal name provided; and
- the applicant is an incorporated legal entity or a limited liability partnership
- If one of the three criteria above is not met, the application will be automatically refused. If the three criteria are met, then the CRA will verify the following:
- The amount from line 101 of the GST 34 return (or the FP-500-V for Quebec based applicants) for the company’s last complete fiscal year. For monthly and quarterly filers, verification will be based on the most recent 12 month period. The applicants must be up to date with their returns. The amount at line 101 must be no less than $200,000 and no more than $50 million in annual revenue declared in Canada (this includes exempt supplies as well as taxable supplies).
- Number of full-time equivalent employees (FTE). The company must have a minimum of one and a maximum of 250 FTE, as per the number of T4 slips produced by the company.
- CRA confirms to the CanExport unit that all criteria are met which confirms the eligibility of a company to the program.
This information needs to be confirmed to the CanExport unit directly by the CRA and by no other means. As such, when an applicant’s basic eligibility verifications comes back negative from the CRA, the application will be refused and no further verifications with the CRA can be done for that same application. The only way to verify the eligibility of a company to the program is to submit a new application.
Why is the program only open to small and medium-sized businesses?
Small and medium-sized businesses are the backbone of the Canadian economy, representing 99 percent of all Canadian businesses. A frequently cited barrier to exporting is lack of financing. This program helps SMEs bridge this financing gap.
Which sectors are eligible?
All sectors are eligible, except for agriculture, food and beverage, fish and seafood and wine, beer and spirit sectors. They are not eligible for CanExport because they can apply for export support through Agriculture and Agri-Food Canada’s AgriMarketing Program.
In which countries are activities eligible?
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.
Which activities are eligible?
A wide variety of activities that support the export of goods and services into new markets are eligible, including, but not limited to:
- Business travel to target markets;
- Participation at trade fairs and trade missions;
- Adaptation of marketing tools for a new market; and
- Market research;
Which activities are ineligible?
Ineligible activities include:
- Ongoing core/operational activities;
- Activities in a market where you have been exporting over 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; and
- 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.
Which expenses are eligible?
Eligible expenses are costs incurred by the Recipient for a maximum of two employees working for the company to carry out approved activities. Eligible expenses must be incurred within the project phase of the contribution agreement and are reimbursable up to 50% of the eligible cost, up to specified limits. Eligible expenses include:
- The cost of travel from Canada for up to two employees or owners working directly for the Canadian SME applying for a CanExport contribution (economy airfare or up to the equivalent cost for rail, bus or car travel);
- Per diems of up to $400 per day per employee for a maximum of two employees working for the company to pay the cost of accommodations, meals and incidentals;
- The cost of registration for attending a conference or a trade fair for a maximum of 2 employees;
- The costs to exhibit at a trade fair, including rental, booth fees and other associated costs;
- Translation/interpretation costs;
- Fees related to the design, editing, adaptation and printing of marketing tools for specific markets;
- Legal fees pertaining to incremental activities targeting the export of products and/or services in a new market;
- Business consultant fees for organizing business-to-business (B2B) meeting programs and matchmaking related to a CanExport-funded international business development activity, and for information gathering and analysis pertaining to a custom market research or study specific to the applicant’s products or services in their target market. Note also that the costs of a consultant are limited to 25 percent of the total cost of the approved activity/project; and
Which expenses are ineligible?
The following expenses are not eligible:
- 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.
Can my company be paid in advance of carrying out the activity?
No, the program does not make advance payments. The program will not cover expenses incurred prior to the approval of your application.
Why are you asking me for my CRA business number?
The program wants to ensure that applications are processed as quickly as possible. Having your business identifier number allows the program to get confirmation from the Canada Revenue Agency that you meet the basic eligibility requirements. In order for the CRA to communicate with the CanExport unit regarding the basic eligibility requirements, please ensure that the person identified in section 9 (Person authorized) of your application is either on file with CRA as an owner, or listed as a director in the Certificate of Incorporation with the appropriate incorporating authority (federal or provincial/territorial).
What is meant by an “export business case”?
The export business case provides the program with enough information to make an informed decision on your application. The program needs to gain an understanding of your company’s products and services, as well as the opportunities the activity you are undertaking will provide. The program also needs to gain an appreciation of the business risks associated with the activity as well as your company’s capacity to carry out the activity.
Is the export business case the only thing that will determine my eligibility?
Although the business case is an important consideration, other factors will be taken into account, including: the incrementality factor (showing that the project goes beyond ongoing core/operational activities); benefits to Canada; whether the product or service and target markets are aligned with Government of Canada trade strategies; market potential; and, if applicable, any past interaction between a participating company and the TCS or its partner organizations, including the NRC.
What do we mean by “benefits to Canada”?
Applicants will need to demonstrate that the activity for which they are seeking funding will create benefits to Canada. This could include: the number of jobs in Canada that the activity is expected to create; the profits the activity is expected to generate in Canada; the expenditures in Canada associated with the activity; and whether the activity supports a new product or technology developed in Canada.
At what time of the year can I submit an application for funding?
Applications will be accepted any time during the year and will be processed on a first-come, first-served basis, subject to the availability of funding. The Applicant’s Guide and access to the online application portal are available at www.international.gc.ca/CanExport.
Can I apply for multi-year funding?
Yes, you can apply for multi-year funding. However, recipients can only have one active CanExport project at any given time and can only reapply once their current CanExport project activities have been conducted and all claims have been processed.
What is the maximum amount of funding my firm can receive?
Non-repayable contributions from the CanExport program will range from $10,000 to $99,999 per project. The maximum annual CanExport contribution per applicant is set at $99,999 per government fiscal year, which begins on April 1 of each year and ends on March 31 of the following year. The amount of the contribution will be determined on a cost-sharing basis. The contribution can be for up to 50 percent of eligible expenses, that is, your firm must match available government funding on a one-to-one basis (i.e., including all other federal, provincial, territorial and municipal sources for the same activity). Note also that the costs of a consultant 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.
Can my firm apply for CanExport funding if it is already receiving funding from other sources?
Firms may apply for and receive funding from other sources, but the total level of government assistance (i.e., federal, provincial, territorial and municipal) cannot exceed 50 percent of the total eligible expenses for the same activities or projects.
Applicants must disclose all sources of funding for a proposed project, both in their project application and, if the application is approved, in the project report following the completion of the project activities. In the event that actual total government assistance to a recipient exceeds the 50 percent limit, the recipient will have to repay the Crown on a pro-rated basis (based on total assistance received).
Recipients 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.
Can I receive feedback on a draft version of my application before submitting a final version?
No. Only completed applications will be reviewed.
However, applicants are encouraged to discuss their international business development plans with their Trade Commissioner Service (TCS) regional office, which though they cannot assist in the preparation of the CanExport application, can however provide assistance in preparing for international markets and support them throughout the implementation. The Canadian Trade Commissioner Service can also help in developing 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 trade commissioner nearest to you, who is responsible for your sector of activity, please visit the TCS website at http://www.tradecommissioner.gc.ca/eng/find-trade-contacts.jsp.
Can I include more than one market in a single application?
No. Applicants must submit an application for a single new market. Note that a new market is defined as one country in which your company has not exported in the last 24 month. However, the application can include multiple activities for a single market. (For more information about markets, please see the Applicant’s Guide).
How will applications be assessed?
If your application meets the basic eligibility criteria, your application will be assessed against mandatory and rated criteria.
The MANDATORY criterion is that the project/activity or activities be incremental to the company’s core activities. An application must explain the rationale as to why a company has decided to explore opportunities in a new market or a market in which it has not done business in the past two years. The application form must also indicate the results that the company expects to achieve by exploring opportunities in that market. If the company does not meet this mandatory criterion, then no further assessment will be done and the application will be denied. If the application meets this criterion, it will be further assessed against the following additional RATED criteria:
- The viability of the proposed business case;
- The alignment with the Government of Canada’s trade strategies;
- The market potential of the proposal; and, if applicable,
- An assessment of any previous interactions with the TCS or its partners, including the NRC, if applicable.
More information on the assessment criteria is included in the Applicant’s Guide
When will I know whether my application has been accepted or rejected?
The program will endeavor to make a decision on your application within 25 working days. You will be notified of the decision by email.
Why wasn’t my project or a component of my project funded if all the activities and expenses were eligible?
It is possible that the information included in your request was not sufficient to justify some of the expenses and/or proposed activities and to demonstrate clearly that they were part of a strategic approach to expand your business to the target market. The description of the proposed activities should demonstrate that they aim to promote international business development, go beyond your company’s core activities and/or the basic operations of your firm, represent new or expanded initiatives and provide an opportunity to yield incremental results. CanExport will approve funding for those activities considered the most effective to achieve the expected results of the program.
What happens once a project is approved?
Successful applicants will be notified by email when the project is approved. Following approval, an authorized officer of the 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 of the Government of Canada and the firm. Once your firm receives the contribution agreement, you will have 30 calendar days to sign and return it.
What happens if my project is not approved?
If your application is declined, you will receive a brief explanation, via email, outlining the reason(s) why the application could not be considered or the proposed project could not be supported.
What is a 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 obligations of each party.
The contribution agreement must be signed by both parties.
Who can sign the contribution agreement on behalf of my firm?
The firm’s signing authority, as identified in the application form, must be a person who is authorized to legally bind the firm to an agreement.
Who can sign the contribution agreement on behalf of my firm?
The firm’s signing authority, as identified in the application form, must be a person who is authorized to legally bind the firm to an agreement.
Can certain aspects of the project be changed after approval?
The firm must notify the Government of Canada 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.
Is the reimbursement of expenses contingent on obtaining export sales?
No. Although the goal of the program is to provide funding to Canadian SMEs to support their export development activities so that they can become new exporters or diversify their export markets, eligibility is not tied to export performance.
How will my company receive the funds?
Your company must submit a claim for reimbursement of costs incurred immediately following the completion of the approved activity or activities as outlined in the contribution agreement. The claim will cover costs incurred between the start and end dates of the project phase, as defined in the contribution agreement. Recipients must complete the status or final report section of the claim template. CanExport program will endeavor to pay claims within 20 working days of receiving the claim and associated report.
Do I need to include receipts?
Unless specifically requested to do so, you do not need to include receipts with your claim for reimbursement. You are required, however, to maintain receipts and records of expenses for the life of the agreement, which means you must keep them for three years following the end of the agreement’s project phase. These obligations are set out in the contribution agreement. If you are not able to provide receipts to support expenses, you could be required to repay these amounts.
Do I need to provide anything else to claim my expenses?
Yes. You will be required to report on the results of your activity. The claim form will include a section to report this information. This requirement is set out in the contribution agreement.
Do I need to report on my CanExport activities?
Yes, your claim must be accompanied by a report that details the activities and outcomes of your project, measured against the approved activities and project objectives. Your firm will also be required to report annually, for three years following the end of the project, on the benefits to Canada resulting from the project. Specific reporting instructions will be provided in the contribution agreement.
Could my firm be visited or audited?
On occasion, a Government of Canada representative might visit your place of business or 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.
All CanExport recipients may also be subject to audit. If your firm has been selected for audit, you will be notified well in advance. Audits normally occur after the expiry date of the agreement and are carried out by the Government of Canada or professional auditing firms on its behalf. That is why it is imperative you maintain records of activities as well as receipts for all expenses related to the approved activities. If overpayment is identified in the audit, the overpaid amount must be reimbursed.
How long will it take before I’m reimbursed?
CanExport expects to process claims within 20 working days of receipt of a complete claim. However, there may be delays during the first few months of program implementation.
How do I get more information on the program?
If you require additional information, please contact us at CanExport@international.gc.ca.
How early should I submit an application for funding?
Applicants should submit an application at least 25 business days prior to their project start date.
Will I be able to add additional details after my application is submitted?
No, CanExport will assess your application based on the information provided and other readily available information such as previous interaction between the Trade Commissioner Service or website. It is therefore important that you ensure your submission provides sufficient details on the company and its proposed strategy for the target market, a breakdown of costs and of activities and strong rationale to justify the proposed course of action in the project application. Failure to do so could unfortunately result in certain activities, expenses or even applications being refused.
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