Backgrounder – The Canada Digital Adoption Program

March 3, 2022

The Canada Digital Adoption Program (CDAP) has been established to help small and medium-sized enterprises (SMEs) realize their full potential by adopting digital technologies. Announced in Budget 2021, the $4 billion program is an investment of $1.4 billion in grants and advisory services to SMEs from the Government of Canada and up to $2.6 billion in loans from the Business Development Bank of Canada to help businesses cover the costs of implementing new digital technologies.

CDAP comprises two separate funding components:

Grow Your Business Online

For smaller, consumer-facing businesses, including those in service industries, Grow Your Business Online grants will help them adopt e-commerce technologies. For-profit businesses, including co-operatives and social enterprises, are eligible for this $2,400 micro-grant. Businesses must also be registered or incorporated and have at least one employee. Up to 90,000 small businesses will be supported by Grow Your Business Online grants.

To help small businesses with their e-commerce plans, a network of service providers was established. These business support organizations will provide guidance to small businesses on how to best grow their online presence. They will also provide the aforementioned $2,400 micro-grant to cover costs related to e-commerce adoption. These organizations will also establish a network of youth e-commerce advisors to help small businesses make use of their new digital tools. A total of 11,200 youth placements will be supported.

The $2,400 micro-grant can be used to cover the costs associated with a range of activities, including website development, search engine optimization, subscription fees for e-commerce platforms, and social media advertising.

Boost Your Business Technology

SMEs that want to further improve their productivity and become more competitive in the digital marketplace can turn to Boost Your Business Technology funding. Eligible businesses must have between 1 and 499 employees and have annual revenue between $500,000 and $100 million. Up to 70,000 SMEs will be supported by Boost Your Business technology funding.

Businesses interested in this funding may be looking to adopt new customer relationship software, digital inventory management systems, network security software and other technologies that will improve their bottom line, such as artificial intelligence, machine learning and robotics.

To access Boost Your Business Technology funding, SMEs can complete a free digital needs assessment to help them better understand their digital readiness. They can apply for a grant to cover 90%, up to a maximum of $15,000, of the cost of developing a digital adoption plan. There is a roster of expert digital advisory service providers available to help SMEs develop their plan. Eligible SMEs will be able to search the Digital Advisor Marketplace using a range of criteria, such as the industry sector, area of expertise, language and geographic location, to find the right advisor for their business.

To support the implementation of their digital adoption plan and the acquisition of new technologies, SMEs will be able to apply for an interest-free loan of up to $100,000 from the Business Development Bank of Canada.

As part of Boost Your Business Technology funding, we have partnered with Magnet, a not-for-profit organization dedicated to connecting businesses with young Canadians looking for work, to employ up to 16,800 students and young Canadians to support businesses looking to adopt digital tools and technologies. Eligible SMEs may also apply for a wage subsidy of up to $7,300 to retain a post-secondary student or recent post-secondary graduate as part of a youth placement opportunity. The youth work placement is designed to provide additional support for SMEs undertaking their digital transformation. Magnet will use its social innovation platform to pair students or recent graduates trained to support digital transformation with SMEs to help them with their digital adoption plans.

To start your digital transformation journey, visit the Canada Digital Adoption Program.