Expanding a business is a big step – and a sign that your company is entering its next stage of growth. While expansion is exciting, it comes with its own set of financial considerations.
For companies considering expansion in Waterloo Region, government support programs can play an important role in turning growth plans into reality.
By leveraging various tax credits, grant programs and other incentives at the provincial and federal levels, businesses can reduce financial burdens, invest more in innovation and enhance their competitiveness.
This article outlines some key programs available, but it’s not an exhaustive list. To explore opportunities specific to your business and sector, visit our interactive Incentives page for more detailed information.
Editor’s note: Waterloo Region is made up of three cities (Kitchener, Waterloo and Cambridge) and four townships (Wilmot, Woolwich, Wellesley and North Dumfries). We’ve indicated each company’s specific location in parentheses below.
Did you know?
By tapping into federal and provincial R&D tax credits, businesses can save up to 66.5% on research and development.
Provincial Support
Southwestern Ontario Development Fund (SWODF)
The SWODF funds businesses, municipalities, and not-for-profit organizations to promote economic development in Southwestern Ontario. The program offers up to 15% funding to a maximum of $5M, interest-free during the project period (up to 4 years).
Eligibility:
- Employ at least 10 people (or 5 if in rural Ontario)
- Commit to creating at least 5 jobs (or a 30% increase for companies with fewer than 15 employees)
- Provide 3 years of operations/financial statements
- Be located in or plan to locate in Southwestern Ontario
- Invest at least $500,000 in the project (or $200,000 in rural areas)
In 2022, the Government of Ontario invested nearly $2.2M in four businesses in Waterloo, including Huron Digital Pathways (Woolwich), Blendtek Ingredients (Cambridge), RTS Companies (Wellesley) and Delta Elevator Company (Kitchener). This support helped these companies strengthen their operations and accelerate growth.
More recently, PWO Canada invested $9.6M in its Kitchener location to establish a new assembly line with advanced robotics and IIoT technology and create 27 new STEM-focused jobs. This expansion, backed by $1.5M in SWODF support, highlights the Fund’s role in driving high-tech manufacturing growth in our region.
Co-operative Education Tax Credit
This tax credit helps businesses hire students from Ontario’s co-op education programs by offering 25% to 30% of eligible expenditures, up to $3,000 per student. By leveraging this credit, businesses can tap into a pool of fresh talent while reducing hiring costs.
Ontario Centres of Excellence – TalentEdge Internship Program
The TalentEdge Internship Program provides funding for companies working on collaborative, industry-driven projects that include an R&D component. With funding starting at $15,000 to $20,000 for each 4-month internship, this program allows businesses to engage emerging talent while driving innovation.
Invest Ontario Fund
The Invest Ontario Fund supports high-impact investments in key sectors, providing grants and loans to enhance Ontario’s economic resilience and competitiveness.
In 2022, Dana Corporation (Cambridge) received $2.5M as part of a $60M investment to expand its electric vehicle manufacturing, creating 105 new jobs by 2025. Similarly, in 2023, PWO Canada Inc. (Kitchener) received $1.5M to establish a customized assembly line, creating 27 new jobs.
Federal Support
Scientific Research and Experimental Development (SR&ED)
The SR&ED program provides a 15% tax incentive for businesses conducting R&D in Canada, with potential benefits reaching up to 35%. This program valuable for companies investing in innovation and can significantly offset research and development costs.
Strategic Science Fund (SSF)
The Strategic Science Fund supports critical research and innovation, aiming to improve health, economic and social well-being in Canada.
In 2024, IQC Canada Inc. (Waterloo) received $18.4M from the SSF to accelerate quantum research over the next five years, supporting talent development, knowledge mobilization and commercialization.
Strategic Innovation Fund (SIF)
The Strategic Innovation Fund provides repayable and non-repayable contributions to firms in Canada’s industrial and technology sectors.
In March 2021, Novocol Pharma (Cambridge) received $32.7M in financing support from the Government of Canada to strengthen its domestic fill-finish biomanufacturing capacity.
Other examples include Quantum Valley Ideas Lab (Waterloo), which received $20M in 2019 to develop quantum innovations and Cognitive Systems (Waterloo), which received $7.3M to advance Wi-Fi-based motion detection technology in 2022.
FedDev Ontario
Federal Economic Development Agency for Southern Ontario (FedDev Ontario) offers financial assistance to help businesses scale up and improve productivity through innovation.
In 2022, Miovision Technologies (Kitchener) received $7.4M to develop its traffic monitoring hardware and software, reducing traffic congestion and vehicle emissions, and creating 58 new jobs.
The Accelerator Centre (Waterloo) received $10M in 2022 to support the launch of AC:Studio, a hybrid venture studio program focused on supporting early-stage startups across Southern Ontario, providing 100 startups with $100,000 in seed funding.
Driving innovation further
Canada supports innovative companies by offering a variety of incentives, credits and grants. These programs have played an important role in growing Waterloo’s business sector by funding research, equipment upgrades, commercialization and more.
For more details, visit our interactive Incentives page.
We can help you find available government support programs for your expansion.