You’ve found a grant that looks promising. The next question is always the same: what can you actually spend the money on? While every program has its own rules, most Canadian grants follow similar patterns when it comes to eligible expenses. Understanding these patterns early can save you time, reduce rejected claims, and help you plan projects that funders are more likely to approve.
Across federal, provincial, and regional programs, eligible expenses usually tie directly to project delivery, business growth, or public policy goals like innovation, job creation, and productivity.
Below are expense categories that appear again and again across Canadian grants. These are not guarantees, but they are strong signals of what funders expect to support.
Most business grants will fund labour costs when the work is tied directly to the approved project.
Commonly eligible:
Common limits:
For example, the Canada Digital Adoption Program (CDAP) supports digital transformation activities, including labour tied to implementing new systems.
Many grants encourage you to work with external experts instead of doing everything in-house.
Often eligible:
These costs must usually be:
Under CDAP, digital advisors and technology providers are an expected part of eligible project costs.
Equipment is one of the most common eligible expense categories, especially for productivity, innovation, and modernization grants.
Typically eligible:
Often excluded:
CDAP-supported projects commonly include software and digital systems, with up to $100,000 in financing available through the BDC CDAP Loan.
Workforce development is a major funding priority across Canada.
Frequently eligible:
Some programs will also cover:
Training expenses must usually relate to new technology, new processes, or business growth—not routine onboarding.
Many grants support activities that help you reach new customers or markets.
Common eligible marketing expenses:
Advertising and social media spend may be limited or capped, especially for domestic-only marketing.
Travel is often eligible, but tightly controlled.
Usually allowed:
Usually excluded:
Always check provincial rules, as travel eligibility varies widely.
If materials are essential to delivering the funded project, they are often eligible.
Examples:
General operating supplies (like office paper) are rarely eligible.
Even across different programs, some costs are almost always excluded:
This is where many applications fail—claiming everyday business costs instead of project-specific ones.
1. Claiming expenses incurred before approval
Most grants only reimburse costs incurred after written approval. Pre-spending is a top reason claims get denied.
2. Assuming owner wages are fully covered
Many programs cap or exclude owner and shareholder compensation.
3. Mixing operating and project costs
Funders want incremental costs tied to growth, not business-as-usual expenses.
4. Missing documentation
No invoice, no proof of payment, no reimbursement—no exceptions.
Q: Are salaries always eligible under Canadian grants?
Not always. Salaries are usually eligible only when tied directly to the funded project and may exclude owners or executives.
Q: Can I use grant money to pay rent or utilities?
Rarely. These are considered operating expenses and are typically ineligible unless the program explicitly allows a portion.
Q: Are software subscriptions eligible expenses?
Yes, in many programs—especially digital, productivity, and innovation grants. CDAP-supported projects commonly include software costs.
Q: Do grants cover taxes like GST or HST?
Usually no, unless your business cannot recover the tax. This varies by program.
Q: Can I combine grants with loans for the same project?
Often yes. For example, CDAP allows businesses to combine advisory support with the BDC CDAP Loan for implementation costs.
After the FAQs:
GrantHub tracks hundreds of active grant programs across Canada — check which ones match your business profile.
Eligible expenses are one of the biggest decision factors in grant approval. When your project costs align with what funders already support, your chances improve quickly. Tools like GrantHub’s eligibility matcher can help you filter programs by province, industry, and expense type in seconds—so you focus only on grants that actually fit your business.
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