Regional Relief and Recovery Fund - Program guidelines

On April 17, 2020, Prime Minister Justin Trudeau announced that Canada’s six regional development agencies (RDAs) would deliver $675 million in financial support to small- and medium-sized enterprises (SMEs) that are unable to access other federal COVID-19 relief measures.

FedDev Ontario will deliver the Regional Relief and Recovery Fund (RRRF) throughout southern Ontario.

The RRRF seeks to support southern Ontario SMEs to address gaps in or supplement other federal relief measures, as well as complement those provided by other levels of government.

In particular, the RRRF seeks to provide support to southern Ontario SMEs that:

  • Do not qualify for, or have been rejected from, current Government of Canada COVID-19 relief measures.

SMEs will have been expected to have already applied to other Government of Canada emergency credit relief measures, for which they are eligible, including:

  • Canada Emergency Business Account (CEBA);
  • Business Credit Availability Program (BCAP) – Business Development Bank of Canada (BDC) Co-Lending and Export Development Corporation (EDC) Loan Guarantee programs;
  • BDC COVID-19 Working Capital loans; as well as,
  • Other targeted and sector-specific COVID-19 programs (e.g., funding for Indigenous Entrepreneurs, Farm Credit Canada).

NOTE: If you have received the Canada Emergency Wage Subsidy (CEWS) or the National Research Council Canada Industrial Research Assistance Program (NRC-IRAP) Innovation Assistance Program (IAP), you are eligible under the RRRF for financial support, excluding costs associated with salaries and benefits. If you have received a Canada Emergency Business Account (CEBA) loan, the CEBA loan amount will be adjusted from the RRRF loan and you will not be eligible to have any portion of the RRRF loan forgiven.

Scope and Objectives

The RRRF, delivered by FedDev Ontario, will provide financial contributions (interest-free loans) to help support fixed operating costs of SMEs, where business revenues have been affected by the COVID-19 pandemic.

Eligibility

1) Applicants

Eligible applicants Ineligible applicants
  • A Canadian or provincially incorporated business, co-operative or an Indigenous-owned business located in southern Ontario with 1 to 499 full-time equivalent employees;
  • Facing funding pressures with fixed operating costs, as a result of the COVID-19 pandemic;
  • Have applied to other Government of Canada COVID-19 emergency credit relief measures, for which they are eligible, including:
    • Canada Emergency Business Account (CEBA);
    • Business Credit Availability Program (BCAP);
      • BDC Co-Lending Program
      • EDC Loan Guarantee Program
    • BDC Working Capital Loans;
    • Other applicable targeted and sector-specific COVID-19 programs (e.g., funding for Indigenous entrepreneurs, Farm Credit Canada);
  • Planning to continue to operate its business or resume operations; and
  • A viable business before the COVID-19 pandemic.
  • Government organizations or bodies, or entities owned by a government organization or body;
  • Unions, charitable, religious or fraternal organizations or entities owned by such an organization;
  • Entities that are structured as a holding company; and
  • Entities owned by individuals holding political office.

2) Eligible activity

SME funding support for fixed operating costs, where business revenues have been affected by the COVID-19 pandemic.

3) Costs

Eligible costs Ineligible costs

May include:

  • Capital lease payments for existing equipment and machinery;
  • Salaries and benefits
    • Will only be considered for support if the business is not eligible or declined support from the Canada Emergency Wage Subsidy or the NRC-IRAP- Innovation Assistance Program for pre-revenue businesses;
  • Property taxes;
  • Utilities;
  • Bank charges and interest payments;
  • Professional fees;
  • Monthly insurance payments;
  • Rent;
    • Applicants are expected to pursue with their landlord access to the Canadian Emergency Commercial Rent Assistance (CECRA) for small businesses (details on CECRA will be available mid-May); and
  • Other fixed operating costs applicable to the applicant.
  • Any costs deemed not reasonable and/or not directly related to a business’ fixed operational expenses;
  • Monthly mortgage and loan payments;
  • New capital expenditures;
  • Refinancing of an existing debt;
  • Costs of amortization and goodwill; and
  • Acquisition of land and buildings.

Priorities

If there is significant demand for the funding available, priority may be given to SMEs that are significant employers in communities and critical industries, such as:

  • Manufacturing – includes businesses engaged in the physical, chemical or mechanical transformation of goods, materials or substances into new products. Examples include automotive, aerospace, food and beverages, fabricated metal and machines, and chemicals and plastics.
  • Technology – includes a broad range of software, hardware, and life and environmental activities in diverse sectors such as information and communications technologies, biotech, biopharma, clean technologies, and bio-processing.
  • Tourism – includes accommodations, recreation, tour operators, and scenic and sightseeing transportation.
  • Support the government’s commitment to inclusive growth (i.e., women, Indigenous peoples, youth, persons with disabilities, visible minorities, newcomers, LGBTQ2) and Official Language Minority Communities.

Application process

Applications for funding are accepted on an ongoing basis with no submission deadlines, until the Fund is fully committed.

FedDev Ontario has a single-phase RRRF application process using a single RRRF Application for Funding.

Refer to the Application Guide for instructions on how to complete the RRRF Application for Funding.

Applicants are encouraged to review the Application Guide in conjunction with these guidelines.

One Application for Funding per applicant is permitted. Multiple and concurrent applications from the same applicant will not be considered.

Application review

FedDev Ontario will review applications as they are received.

All applications will be screened initially for completeness. Incomplete applications will not be assessed and will be considered ineligible for funding.

Applicants with incomplete applications are permitted to re-apply with completed applications including all required documentation.

Complete applications are those that include all prescribed documentation containing all information needed for FedDev Ontario to complete the review. Information should be accurate, verifiable, relevant and consistent. Complete applications will undergo a due diligence process where they are assessed against a number of factors.

Assessment criteria include, but are not limited to:

  • Impact of COVID-19 pandemic on business operations;
  • Availability of other financial supports (e.g., access to credit at a financial institution and other federal COVID-19 measures);
  • Viability of the applicant (i.e., ability to repay the contribution); and
  • Economic benefits of RRRF support.

Funding

Two funding options are available to all eligible applicants applying to the RRRF through FedDev Ontario. The funding options are designed to address gaps in or supplement other federal relief measures and complement those provided by other levels of government.

Eligible Applicants may only apply for assistance under ONE of the two funding options (based on eligibility criteria and funding needs).

The contribution amount will be based on the:

  • Funding option selected (i.e., Maximum Contribution);
  • Eligible operating costs (as per Eligible Costs section);
  • Extent to which other federal COVID-19 measures have been accessed; and
  • Applicant’s ability to repay the contribution.

NOTE: Eligible applicants that have received a CEBA loan must first attempt to access the BCAP measures and BDC Working Capital before applying to the RRRF. They will only be eligible to apply for Option 2.

Funding option 1
Up to a $40,000 conditionally repayable contribution (interest-free loan)
Funding option 2
Up to a $500,000 unconditionally repayable contribution (interest-free loan)
Type of loan and terms

An interest-free contribution (loan) with condition for partial forgiveness of contribution amount

No payments required until December 31, 2022, but applicant can opt to make payments anytime between January 1, 2021 and December 31, 2022.

Up to 25 percent or $10,000 contribution forgiveness is available, provided 75 percent, or up to $30,000 is paid back by December 31, 2022.

If 75 percent of the contribution amount is not repaid by December 31, 2022, the balance owing will be converted to an additional three-year contribution (fixed repayment schedule), beginning January 2023, with no forgivable portion.

The full balance of the contribution amount must be repaid by no later than December 31, 2025.

An interest-free fully repayable contribution (loan)

100 percent of contribution to be repaid.

No payments required until December 31, 2022.

Fixed payment schedule beginning January 2023.

Loan amount

The contribution amount will generally be the lesser of three months of eligible and supported fixed operating costs, or $40,000.

The contribution amount will generally be the lesser of three months of eligible and supported fixed operating costs or the maximum contribution amount based on the applicant’s 2019 Revenue, as outlined below:

2019 Revenue

Maximum Contribution Amount

Less than $1M

Up to $50K

$1M to $2M

Up to $100K

$2M to $5M

Up to $250K

$5M to $10M and above

Up to $500K

Pre-revenue firms that have received VC and/or Angel support

Up to $250K

Agreement and disbursements

If an Application for Funding is approved, a Contribution Agreement will be executed between the Applicant and FedDev Ontario.

Approved contributions of $40,000 or less will be disbursed through a single advance payment following receipt of an executed (signed) Contribution Agreement.

If an Application for Funding is approved, a Contribution Agreement will be executed between the Applicant and FedDev Ontario.

Approved contributions of $100,000 or less will be disbursed through a single advance payment following receipt of an executed (signed) Contribution Agreement.

Approved contributions greater than $100,000 will be disbursed through two advance payments:

  1. Advance payment for 80 percent of the contribution amount will be disbursed upon receipt of an executed (signed) contribution agreement.
  2. Advance payment for the remaining 20 percent of the contribution amount will be disbursed upon submission of an attestation confirming that the initial 80 percent payment has been expended, the remaining 20 percent is required, and the SME remains operational.

Reporting

For both funding options, the SME will be required to submit a Final Report that includes:

  • An attestation that the full amount of the contribution was expended for eligible fixed operating costs;
  • Narrative describing how the contribution received has mitigated the impacts of COVID-19 on the SME;
  • Number of jobs maintained as a result of the contribution received;
  • Confirmation that the SME is continuing its operations; and
  • Other metrics as may be requested by FedDev Ontario.

The SME must submit a copy of their financial statements within one hundred and eighty (180) calendar days of their fiscal year.

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