Step-by-Step Application Guide for the Canadian Digital Adoption Program Micro-Grant for Small Business Owners

After the Covid pandemic, it became painfully clear that small businesses in Canada needed more support improving their competitiveness through the use of digital marketing strategy and technology. Enter the Canadian Government. The Government of Canada acknowledged this need through the development of the Canadian Digital Adoption Program (CDAP). It’s a $4 BILLION dollar initiative that provides hands-on support with the implementation of essential technology upgrades and digital marketing strategies.

There are multiple streams of the grant you may qualify for, but this how-to guide will focus specifically on the Grow Your Business Online (GYBO) Micro-Grant. As is common with most grants, it is given on a first-come first serve basis.

Our step-by-step guide will cover:

• Eligibility
• Eligible and Ineligible Costs
• Reimbursement
• What you’ll need to get started
• Step-by-step instructions to submit the application
• Expected wait times
• Additional opportunities
• Next steps

* Although we are using links specific to British Columbia and Alberta throughout this article, please keep in mind that each province has their own version of the $2,400 CDAP Micro-Grant.

CDAP Micro-Grant Eligibility

The big question: do you even qualify? The good news is that the criteria for the Grow Your Business Online Grant make it a pretty accessible and straightforward funding opportunity for small business owners and solopreneurs. You can receive funding if your Canadian-owned business:

• is registered or incorporated
• is for-profit and consumer-facing
• has (1) or more employees (not the owner) OR had at least $30,000 in annual revenue
• commits to maintaining their digital adoption strategy for (6) months

You will not be eligible if your business is:

• a corporate chain, franchise or registered charity
• a representative of a multi-level marketing company
• a brokerage firm, such as real estate agents, investment advisors, insurance agents, etc.
• a business that is engaged in online reselling or drop-shipping reliant on third-party suppliers
• a wholesale or distribution business and manufacturer (unless you also sell directly to consumers)

Note: If you need more clarification on certain criteria, you can reach out directly to Innovation, Science and Economic Development Canada (ISED) via the CDAP contact form or by calling toll-free in Canada 1-800-328-6189.

Reimbursement

The CDAP Micro-Grant is a reimbursement meaning that you are only reimbursed for costs after the grant approval date. Applicants are reimbursed up to $2,400 (not including tax) via Electronic Funds Transfer (EFT).

Clients have reported reimbursement taking anywhere from 30 – 60 days.

Eligible Costs

Once you’ve determined your eligibility, the next consideration is whether or not the eligible costs align with your business’ objectives. Small Business BC shared list of eligible costs, which include (but are not limited to) the following:

• Online reservation/booking tools, online ordering systems, and electronic payment solutions.
• Costs linked to optimizing website search functionality through SEO (Search Engine Optimization).
  • This includes activities like Keyword Research and Metadata Optimization.
  • Implementing SEO techniques to ensure mobile-friendly design.
  • Enhancing page speed for optimal performance.
  • Establishing a well-defined internal linking system to guide users and search engines efficiently through the small business’ content.
• Installation of an e-commerce platform, encompassing subscription fees and related costs.
• Back-office solutions to support the execution of an e-commerce strategy.
• Expenses associated with social media advertising (Note: The plan must not solely focus on social media advertising; it should align with the broader e-commerce implementation strategy).
• Creation of customer databases
• Hiring a consultant or agency to execute Digital Marketing initiatives specifically related to your e-commerce store.
• Development of a new e-commerce website.
• Upgrading e-commerce software to track and manage product inventory, fulfill and ship orders.
• Implementing software for product databases.
• Utilizing software to monitor sales, engage in customer marketing, provide discounts, and manage loyalty programs.
• Employing software to streamline marketing efforts.
• Investing in cyber security software or obtaining relevant certifications. Additionally, the grant can contribute up to 20% of the total expenses incurred for both hardware and software.

Ineligible Costs

Ineligible costs may include (but are not limited to) the following:

• Connectivity expenses.
• Costs associated with shipping goods purchased through the e-commerce platform.
• Purchases made before grant approval.
• Renewal expenses for digital services, including domain names and software subscriptions.
• Signage and printing costs.
• Logo redesign and rebranding expenses.
• Business owner’s salary or current employee salary for project execution.
• Costs related to the purchase of land, buildings, or vehicles.
• Expenses associated with intangible assets such as goodwill, whether capitalized or expensed.
• Depreciation or amortization costs.
• Interest on invested capital, bonds, or debentures.
• Bond discount expenses.
• Monthly mortgage, loan, and/or rent payments.
• Refinancing of existing debts.
• Losses on investments, bad debts, and any other debts.
• Fines or penalties.
• Costs related to litigation.
• Fees for administrators, including payments to any member or officer of the Recipient’s Board of Directors.
• Opportunity costs.
• Hospitality and entertainment costs.
• Franchise fees and/or franchise license costs.
• Lobbyist fees.
• New capital expenditure.
• Consulting fees for the submission of CDAP (Community Development Assistance Program) applications or any costs not directly related to the acquisition or setup of a technology solution.
• Non-arm’s length transactions.

This is not an exhaustive list of all eligible or ineligible costs. Once you’ve been approved for the grant, you can speak directly with your government-assigned e-Commerce advisor re: your spending plan and eligible expenses. If you haven’t applied yet, you can reach out to ISED directly.

SOURCES:
Small Business BC Grow Your Business Online Program
Grow Your Business Online: Service Provider Application Guide

What You’ll Need to Get Started

Before you sit down to complete the application, make sure you have the following information or items on hand:

• Business registration number
• GST/HST number (if you have one)
• Annual revenue reports
• Digital copy of business registration or articles of incorporation

The application process itself should take you approximately 20 – 30 minutes.

Step 1: Find the Correct Application

Scroll down and click the Apply now button.

Step 2: Select your Regional Service Provider

If your business is registered in BC, choose British Columbia from the dropdown menu and select Small Business BC as your local or regional service provider from the provided list. You’ll be taken to the SBBC website.

If your business is registered in AB, choose Alberta from the dropdown menu and select Business Link as your local or regional service provider from the provided list. You’ll be taken to Business Link’s website.

(Each province has appointed different organizations to administer the provincial grant.)

Note: For Indigenous-Owned businesses, you will apply separately through the Canadian Council for Aboriginal Business or your local service provider.

Step 3: Determine Eligibility & Start the Application

For BC business owners, once you’re on the SBBC website, scroll to the “Learn if your Business is Eligible” section and click Apply now button.

After reviewing the eligibility criteria and ensuring your business qualifies for the grant, select the second Apply Now button (on the same website if you’re applying for the British Columbia grant).

Step 4: Create an Account in the Administrator’s Portal

In the next step, BC business owners will be transferred to Digital Main Street’s CDAP page.

You’ll click the Create an Account Now button, or login if you have a Digital Main Street account already.

Follow the instructions on the website to create an account. You’ll need to provide a combination of both personal and business information to finish creating the account. Once you’ve input the required information, click on Create.

Step 5: Enter Business Info & Complete Digital Assessment

Entering your business information will only take a few minutes.

The assessment is essentially a series of yes / no questions pertaining to your knowledge of CMS, Google Analytics, SEO, social media and e-commerce. This is for the purpose of your Digital Main Street account, not CDAP, so you shouldn’t spend too much time on it. Leave the default settings and opt out of the partner communications if you so choose.

Step 6: CDAP Eligibility Form

Check your email for the Digital Main Street confirmation message to make sure your account has been set up correctly. You will need to click on the link in your email and sign into your Digital Main Street account. When you see the screen below, click on Digital Assessment and start filling out the CDAP Eligibility Program Application.

Note: Remember that your business must have at least one employee on the payroll (not the owner or a contractor), or have at least $30,000 in annual revenue in the most recent tax year.

CDAP Approval & Wait Times

Upon submitting the forms, you will receive an email from Small Business BC confirming that their team is currently reviewing the information you provided, and an update on the status of your submission should be expected within 7-10 business days.

Upon successful approval of the application, you’ll receive an email similar to the below:

Purchases must be related to eCommerce (ie. buying and selling online). It cannot be a business cost like Wi-Fi connectivity. It should be directly related to e-commerce, so provide a rational reason for your item description! 

Micro-grants are reimbursements, meaning that you will only be reimbursed for costs after the grant approval date. 

Microgrants are also in the form of an EFT. You will get detailed instructions by email about this as well. 

You must be adopting something new—hence the name Canada Digital Adoption Program! The micro-grant does not cover the cost of an existing Shopify or marketing plan you already adopted before participation in CDAP. 

The last thing to remember is that the grant does not cover tax, so you may want to go over the $2400 maximum amount. This also ensures you get the most money possible in case any costs are ineligible after our grant reviewers review your submission. So, for instance, you spent $2400, including tax, you would be reimbursed less than that. Say that one of your costs was also ineligible, and you would be reimbursed even less.

Note: As of December 2023, some business owners have reported wait times around 2-4 weeks.

Next Steps

1. You receive an email from SBBC that your intake form has been accepted.
2. You will then be asked to schedule a one-hour consultation with a government-provided e-commerce advisor (not to be confused with a CDAP digital advisor).
   • In this first consultation, you will talk about your business goals, the CDAP Dashboard, and a review of your Digital Assessment. The conversation will include an overview of the micro-grant process, resources, and answer any questions you’ll have on eligible costs and help you prepare a proposal on how to spend the funds. 
3. Once your proposal has been submitted, you’ll have 90 days to submit the spending plan and get reimbursed .

Using Your CDAP Grant

We recommend that you leverage the grant to fill the gaps in your digital marketing strategy, first focusing on low-effort, high value marketing activities. Based on our experience, optimal results have been achieved by focusing on a combination of activities such as website development, website optimization, integration of booking systems and conducting various digital marketing audits.