Consolidation and regulation are driving a highly competitive landscape in the Food and Beverage sector in Canada.
Under constant pressures to reduce costs, keep up with regulatory requirements, increase capacity and expand into new markets, it can be highly beneficial for food and beverage companies to investigate the various government grants and incentives that can help fund the company's future growth plans.
Growth
Food and beverage companies are seeking growth, both within Canada and across borders. When preparing for the next stage of growth, key business strategies may revolve around imports and exports, currency risks and regulatory requirements. Funding for this growth can include incentives like Growing Forward 2, Export Market Access, the Ontario Exporters fund and the up-and-coming Canadian International Innovation Program.
Growing Forward 2 (GF2): GF2 is a five- year program, running from 2013 - 2018, funded by federal, provincial and territorial governments designed to encourage innovative competitiveness and market development. GF2 is in place to ensure Canadian processors are equipped with the required tools to build and grow successful businesses. Not only does the government want to help with growth, but it also wants to help businesses manage their risk. The program is designed to encourage training and skills development, assessment and planning for future opportunities or risks, and innovation. The government's goal is that claimants ultimately achieve tangible positive results from these supported projects. GF2 makes resources, tools and cost-share funding assistance available.
Export Market Access (EMA): The EMA focuses on small- to medium-sized organizations (SMEs) to assist their growth in foreign markets. All too often companies believe they are too small to be an exporter; this program generates the means for SMEs to access and to thrive in foreign markets. The EMA program creates a lot of possibilities for SMEs that may not have been previously possible, and thus may be a pivotal resource for your business or food and beverage project. Companies seeking to take advantage of the EMA fund must have an existing export mandate at the time of application. They are also required to have current goods and services in place that are produced in Ontario.
Ontario Exporters Fund (OEF): The OEF's objective is to assist SMEs in gaining or increasing their access to international export markets. The OEF is provided by the Ontario Chamber of Commerce (OCC) with support from the Ontario government. Through this fund, the OCC can aid SMEs in better understanding their export capabilities and thus improving their approach to international exporting. OEF will assist SMEs with developing focused export market access strategies and sales objectives. Canadian International Innovation Program (CIIP): The CIIP program is another alternative to help your business expand across borders. The Canadian government is developing a program that aims to foster relationships between Canadian businesses and partner countries. Through these relations, the program seeks to grow business opportunities of new products, services and processes in Canadian and foreign markets.
The partner countries include the following:
- Brazil
- China
- India
- Israel
- South Korea (pending finalization of agreement)
CIIP is currently under development; preliminary expressions of interest are now being accepted.
Competitiveness
The food and beverage industry is constantly faced with challenges ranging from food safety regulations to a continuing need for product development based on consumers' lifestyles. There are programs to help your company both offset the costs and stay competitive and relevant now and in the future. The primary incentive programs aimed towards helping you stay competitive are the Scientific Research and Experimental Tax Credit (SR&ED) program, and the Industrial Research Assistance Program (IRAP).
Scientific Research and Experimental Development (SR&ED): The SR&ED tax credit continues to be an excellent source of funding for those companies seeking to stay competitive in today's ever-changing demands. SR&ED is an innovation-based tax program, however, the activities are not limited to those conducted in a traditional research lab. In fact, most claims are made for experimental developments that often occur within processes. Good working knowledge and experience with this incentive program can ensure you receive the investment tax credits to which you are entitled, and help you stay competitive.
National Research Council's (NRC) Industrial Research Assistance Program (IRAP): Through its industrial technology advisors, IRAP provides financial support to qualified small- and medium-sized enterprises in Canada to help them undertake technology innovation under several different programs:
- Technology innovation projects
- Youth employment strategy programs
- CHTD
Hiring and Succession
As the war for talent heats up in the Food and Beverage sector, attracting, retaining and engaging the talent you need is crucial to prosper in today's food and beverage sector. Ensuring that key positions within your company have been provided for supports organizational stability and sustainability. There are many grants available to the food and beverage sector to help ensure the skills and experience required are in place. It is about finding the right one for your company's needs. Career Focus, Ontario Youth Employment Fund and Canada Job Grant are good examples of funds that can help.
Career Focus: The Career Focus grant provides a funding opportunity for organizations across the country to employ Canadian youth, in an effort to guide them professionally. The organization can benefit by receiving funding to hire additional resources for project initiatives while increasing the amount of highly qualified individuals in the workforce. The program seeks to facilitate the transition of highly skilled young people to a rapidly changing labour market, while investing in the skills and education required for the future needs of our ever-changing job market.
Ontario Youth Employment Fund (YEF): The Ontario government has devised a youth jobs strategy that is comprised of four initiatives, one of which is the Youth Employment Fund (YEF). YEF has been designed to generate opportunities for 25,000 youth to find an entry point into long- term employment. The objective of YEF is to give Ontario youth an entry point to long-term employment with opportunities such as job placements that offer the chance to gain experience and learn new skills while obtaining income. YEF provides employers with the benefit of mitigating immediate and long-term skill gaps, deficiencies and other workforce development needs.
Canada Job Grant (CJG): The CJG grant has been offering employers across the country an opportunity to train existing or new personnel with the necessary skills to meet the needs of a current or new job position. The CJG enables employers to fill positions that are otherwise hard to find suitable candidates for. Some job requirements are very specific in terms of the skills mandatory to complete the position's duties. In order to fill these gaps, the Government of Canada provides an option to have the majority of costs for necessary training covered. The grant offers funding toward the cost of training provided by eligible third-party instructors. Overall, the total cost of training would be shared between the employer and the Canadian government. Two-thirds of the cost of training, up to a maximum of $10,000, could be provided for each grant.
How can BDO help?
BDO's Advisory Services team can assist in activity scoping, application process as well as training. We can connect you with the most suitable associations and government grants and incentives to ensure you receive the maximum amount of funding possible. We can provide a strategic approach in determining how government grants and incentives fit into your company's future growth plans. We can also provide a strategic approach in determining how government grants and incentives can help fund regulatory updates (HACCP & CFIA), as well as your system conversion (ERP and other system upgrades)
About BDO
BDO recognizes that it is critical to both build and protect your brand, as well as to take advantage of recent developments in innovation and technology. our professionals understand the varying priorities and concerns for food and beverage organizations in Canada. as a leader in serving the food and consumer products subsector, we help clients grow their revenue in new markets, build their brands, and control costs to maximize profitability. to ensure we stay current on the issues facing food companies in Canada, we have conducted the Food Processers Survey to learn how organizations are evolving to build sustainable value in their businesses.
For more information on these and other issues facing your business, please contact your local BDO office, or:
Bob McMahon
Partner
National Industry Leader,
Retail and Consumer Business
(905) 272-7818
bmcmahon@bdo.ca
Jaquelyn Schaefer
Consultant, Government Incentives
(705) 441-6346
jschaefer@bdo.ca
Melissa Krakar
Senior Manager
(905) 272-7836
mkrakar@bdo.ca
BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.