The CanExport SMEs program

The CanExport SMEs program, administered by Global Affairs Canada's Trade Commissioner Service in collaboration with the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP), offers financial assistance to Canadian small and medium-sized enterprises (SMEs) aiming to expand into international markets. This program is designed to provide initial funding to expand and grow into global markets.

Pros of the CanExport SMEs Program:

1. Financial Support for International Expansion: The program provides funding covering up to 50% of eligible expenses, with a maximum contribution of $50,000 CAD. This support can significantly reduce the financial burden associated with exploring and entering new markets. ​

2. Support for IP-Related Activities: Funding can be used for various IP-related expenses, such as filing patents or industrial design applications, registering trademarks or copyrights, and obtaining professional services for developing international IP strategies. This assistance is crucial for protecting innovations in foreign markets. ​

3. Encouragement of Market Diversification: By supporting activities in up to five new and eligible target markets, the program encourages SMEs to diversify their international presence, reducing reliance on a single market and spreading risk. ​

4. Comprehensive Eligibility Criteria: The program is open to for-profit incorporated legal entities, limited liability partnerships (LLPs), or cooperatives in Canada with fewer than 500 full-time equivalent employees and annual revenues between $100,000 and $100 million. This broad eligibility allows many SMEs to benefit from the program. ​

5. Support for Various Business Activities: Beyond IP-related expenses, the program may cover costs related to travel for meetings or events, trade shows, marketing, regulatory services, and market research, providing holistic support for international business development. ​

Cons of the CanExport SMEs Program:

1. Cost-Sharing Requirement: While the program covers up to 50% of eligible expenses, SMEs must fund the remaining 50% without the option of in-kind contributions. This requirement may pose financial challenges for some businesses. ​

2. First-Come, First-Served Basis: Applications are processed in the order they are received, which may disadvantage SMEs that need more time to prepare their applications thoroughly.

3. Strict Eligibility and Activity Criteria: The program excludes projects focused on recreational cannabis and recreational substance inhalation, even in jurisdictions where such use is legal. Additionally, target markets must be new, with previous sales below $100,000 or less than 10% of total company sales, potentially limiting opportunities for some SMEs.

4. Detailed Application Process: Applicants must provide comprehensive information, including breaking down costs by fiscal year and detailing activities for each target market. This requirement can be time-consuming and may require dedicated resources.

5. Stacking Limit with Other Government Assistance: The program imposes a stacking limit, restricting the total amount of funding from all government sources to 75% of the proposed project budget. This limitation may affect SMEs seeking multiple funding sources for their projects. ​

In summary, the CanExport SMEs program offers substantial support for Canadian SMEs aiming to expand internationally, particularly in developing IP strategies and entering new markets. However, businesses must carefully consider the program's requirements and limitations to determine if it aligns with their expansion plans and financial capabilities.​

Sources: tradecommissionner.gc.ca

We can help SMEs prepare applications for the CanExport SMEs program, contact us to find out more. We can also help manage your project once funding has been provided through the CanExport SMEs program.