Question Period Note: CANADA DIGITAL ADOPTION PROGRAM (CDAP)

About

Reference number:
MSB-2024-QP-00014
Date received:
Jun 20, 2024
Organization:
Innovation, Science and Economic Development Canada
Name of Minister:
Valdez, Rechie (Hon.)
Title of Minister:
Minister of Small Business

Issue/Question:

How is the Canada Digital Adoption Program helping small businesses?

Suggested Response:

• For Canada’s businesses to thrive and reach customers in an increasingly digital world, they need the tools, resources and supports to go digital.
• Since its launch in 2022, the Canada Digital Adoption Program has supported tens of thousands of businesses with grants, loans and advisory services to adopt digital technologies, meet customers’ needs and be more competitive.
• Many of these businesses have expanded their online operations, and have moved away from outdated tools like spreadsheets to manage inventory and payroll to digital solutions that have reduced their costs, increased profits and improved productivity.

Background:

As part of Budget 2021, the Government of Canada announced the creation of the Canada Digital Adoption Program (CDAP), a $4-billion investment to help small and medium-sized enterprises (SMEs) become more efficient, go digital, take advantage of e-commerce and become more competitive. The program has two grants to meet the varying needs of small and medium-sized enterprises.

The Grow Your Business Online grant offers microgrants of up to $2,400 to help customer-facing businesses take advantage of e-commerce opportunities. The grant can be used to help with the costs related to adopting digital technologies as well as support and advice from a network of e-commerce advisors. Innovation, Science and Economic Development Canada (ISED) has partnered with local and regional service providers across Canada to deliver Grow Your Business Online services.

The Boost Your Business Technology grant helps businesses that require more comprehensive support to adopt more complex technology. Eligible businesses can receive a grant to develop their digital adoption plan, covering up to 90 percent of the cost of the plan to a maximum of $15,000. Additionally, SMEs can apply for a zero-percent financing of up to $100,000 from the Business Development Bank of Canada (BDC) to help them implement their digital adoption plans. They can also apply to receive a wage subsidy of up to $7,300 for a youth work placement to assist with their digital transformation. Youth placements are administered by Magnet, a third-party intermediary, selected through a competitive process.

Program impacts

Since launching in 2022, the program has experienced significant growth in uptake. CDAP has provided the following level of support to SMEs:

Grow Your Business Online (data as of December 31, 2023)
· Received over 43,000 applications.
· Approved over 20,000 grants, for an estimated value of $47.8 million.

Boost Your Business Technology (data as of February 12, 2024)
· Benefited over 53,000 SMEs with a digital needs assessment.
· Disbursed over 15,000 grant claims to Canadian SMEs, worth over $229 million.
· Established a digital advisor marketplace of over 700 firms, representing over 3,000 advisors.

Business Development Bank of Canada (data as of December 31, 2023)
· Authorized nearly 5,000 loans, valued at over $280 million.
· Approved over 82% of SMEs’ loan applications.

Boost Your Business Technology – Intake closure for new applications

Due to overwhelming demand, the Boost Your Business Technology grant’s intake for new applications has closed. An update has been posted on the CDAP landing page, as well as on the Boost Your Business Technology landing page and the About the Program page.

All approved, unexpired grant agreements will remain valid, and the BDC will continue to accept loan applications for all businesses with valid grant agreements. The program will also continue to process the high-volume of existing claims for the Boost Your Business Technology grant.

In the meantime, businesses interested in CDAP-support can continue to submit Grow Your Business Online applications for grants of up to $2,400 to help cover the cost of adopting e-commerce solutions.

Whether intake for the Boost Your Business Technology grant resumes has not yet been determined. SMEs can sign up to receive updates from the program on CDAP’s website.

Additional Information:

· The Canada Digital Adoption Program's (CDAP) Boost Your Business Technology grant is fully subscribed and is not accepting new applications at this time.

· All approved, unexpired grant agreements will remain valid, and the Business Development Bank of Canada will continue to accept loan applications for all businesses with valid grant agreements.

· In the meantime, the Grow Your Business Online grant remains open and applications can be submitted through regional service providers.