Aboriginal Business Canada uses the following guidelines to determine whether a proposed Trade and Market Expansion project is eligible for support, subject to Aboriginal Business Canada,
Industry Canada and other federal government guidelines.
Eligible projects include those to expand existing markets and to establish new ones.
A new domestic market is a geographic area 100 km away from the firm's existing market perimeter.
Since it can be challenging to document existing markets with absolute precision, Aboriginal Business Canada development officers use the 100-km threshold as a guideline when assessing whether a
project would be helping a business expand into a new domestic market. As with all projects, officer discretion, analysis and consultations with others are required.
Aboriginal Business Canada’s support for capital costs is limited. Refer to Eligible Project Costs, below, for more information.
Eligible Project Costs
Eligible costs, as set out in section 7.1.2 of the Aboriginal Business Development Program's Terms and Conditions, for all trade and market expansion projects include marketing costs, costs of
engaging consultants and other qualified professionals, and costs associated with providing financial and business services.
Capital costs, costs of directly related infrastructure development, costs of shares (for eligible acquisitions only), and operating costs are eligible for support when the business seeking to
expand into a new domestic or international market. (A new domestic market is defined as a geographic area 100 km away from the firm's existing market perimeter.)
The 100km restriction does not apply for projects included in the following categories:
- youth-owned businesses
- tourism businesses
- manufacturing businesses
- business, professional, scientific and technical services; and
- companies participating in business opportunities linked to major developments.
Project Assessment Criteria
In addition to the assessment criteria set out in the Aboriginal Business Development Program's Terms and Conditions, the following criteria apply.
As is the case for all projects, the applicant must clearly demonstrate the need for Aboriginal Business Canada support.
Since the level of risk associated with domestic market expansion is expected to be manageable and is normally less than that for the establishment of a new business, Aboriginal Business
Canada generally offers a reduced level of assistance for these types of projects (e.g. 30 percent). Aboriginal Business Canada offers up to 60 percent for businesses seeking to expand
internationally.
Aboriginal Business Canada may support marketing costs related to eligible projects (expanding existing markets or accessing new domestic or international markets), provided the applicant has
a marketing plan in place, and has financial statements clearly demonstrating the viability of the business.
Businesses expanding into new markets (domestic or international) are also eligible to have capital costs supported, provided that the applicant meets the following criteria.
Businesses expanding into new domestic markets must:
- have at least one year of successful business experience in the current market;
- be financially stable with sufficient cash flow to expand;
- have developed a targeted marketing plan; and
- be able to demonstrate the capacity to supply the new market (for example, with catalogues, price lists and other promotional material, adequate inventory levels, production capacity and
distribution systems).
Businesses expanding into new international markets must:
- have two years of successful business experience in the domestic market;
- have minimum annual sales of $75 000;
- have demonstrated growth in sales and profits;
- be financially stable with sufficient cash flow to expand into the proposed new markets;
- have previous experience exhibiting in Canadian trade shows (when appropriate);
- have developed a targeted export marketing plan (this may be waived for trade mission applications; the applicant must submit a written rationale demonstrating the commercial opportunities
being explored and a justification for joining the mission); and
- be able to demonstrate the capacity to supply the new export market (for example, with catalogues, price lists and other promotional material, adequate inventory levels, production capacity
and distribution systems).
In the following exceptional circumstances, the prerequisite for a developed and growing domestic sales base may be waived for companies hoping to enter international markets.
- The applicant is clearly experienced in the specific business under consideration.
- The applicant has a well-documented and confirmed market for the product, i.e., a signed contract or letter of intent.
- The applicant has the financial resources to effectively penetrate the international market.
This is meant to allow for capital and other forms of support to operations such as those centred on herbal exports, software aimed at international markets, or other such products whose
markets are clearly international and applicants are clearly able to pursue them successfully.
