Targeted federal program can bolster smaller Ontario businesses amid tariffs

New, targeted funding can help small and medium-sized businesses in southern Ontario stay competitive in the face of ongoing tariffs—and provide an opportunity to modernize and ensure future resilience.

The program, delivered by the Federal Economic Development Agency for Southern Ontario, is now available to certain businesses, particularly those in the manufacturing, automotive, steel and mid-market sectors. This program is part of a wider, $1 billion federal initiative; funding is also available for businesses across Canada through regional development agencies.

Eligible applicants can access non-dilutive financial support—including non-repayable contributions and repayable, interest-free funding—to help them pursue strategic growth initiatives.

This represents a significant opportunity for small and medium-sized businesses to gain a competitive edge during a time of uncertainty. Access to non-dilutive funding could allow them to invest in innovation, expand into new markets and build more resilient operations.

By leveraging this support, businesses can not only recover from tariff-related impacts but also position themselves for sustainable growth in a more secure and diversified economic landscape.

It is imperative to consult with the appropriate tax advisors to determine whether this program is the best fit for your business—and whether you are eligible to apply.

Key program details

Funding from this $1 billion federal initiative is project-based—meaning recipients must demonstrate incremental, measurable outcomes that add value beyond their current operations.

Two streams are available:

• General stream: Businesses can access between $125,000 and $10 million in repayable contributions—interest-free, with terms set at agreement—or up to $100,000 in non-repayable support. The minimum project cost is $125,000; the program may cover up to 75 per cent of eligible costs, with applicants contributing at least 25 per cent.
• Steel and automotive stream: Businesses can access between $100,000 and $1 million in non-repayable support. Costs are shared equally, with the program covering up to 50 per cent and applicants contributing at least 50 per cent.

How these funds can support businesses

Businesses that are eligible for this program could consider applying the funds to a range of transformative activities, including:

• Adaptation: Businesses can invest in new equipment, adopt advanced digital technologies or pivot their operations to serve new markets. This would enable them to remain competitive and agile in a rapidly changing global trade environment.

• Market diversification: The program encourages businesses to reduce their reliance on tariff-affected markets, such as the U.S., by expanding into other international markets. This helps mitigate risk and could strengthen their position in domestic and global markets.

• Reshoring production: Businesses could bring manufacturing or production back to Canada to reduce exposure to foreign tariffs, lower supply chain risks and regain control over quality and delivery timelines. Reshoring could also contribute to national economic resilience.

• Job protection: By stabilizing operations and improving financial sustainability, companies could better position themselves to retain their workforce and avoid layoffs. This, in turn, could contribute to community stability and long-term employment.

• Building resilience: The program can support long-term competitiveness by helping businesses modernize and become more self-reliant. This includes shifting to domestic sourcing, forming strategic partnerships and strengthening internal trade networks—all of which can help future-proof operations against disruptions to trade and supply chains.

Eligibility and application information

Eligible small and medium-sized businesses must employ a minimum of five full-time employees in southern Ontario and fewer than 500 full-time employees. These businesses must show that they were viable   prior to March 21, 2025—before the U.S. and China imposed tariffs.

Businesses must also have at least 25 per cent of sales in the markets targeted by the tariffs or demonstrate that they were directly affected by ongoing disruptions caused by foreign tariffs or Canada’s countermeasures.

The program is currently open and is accepting applications on a continuous basis. Any activities and related costs incurred before a formal decision is made are at the applicant's own risk—so it’s critical to consult with the appropriate advisors before pursuing this opportunity.