Eligible project costs

Eligible project costs must be directly attributable to the project and must be incurred and paid on or after the project start date of the funding agreement and up to the project completion date. The project start date cannot be earlier than the application period close date.

Eligible project costs do not include ongoing costs of production or operations.

Eligible project costs are cash outlays, net of all applicable harmonized sales tax (HST), which must be documented through invoices, receipts or recipient records acceptable to Ontario. These are subject to verification by an independent auditor. You must maintain evidence of payment for audit purposes.

Acting reasonably, Ontario’s decisions as to the expenditure eligibility and valuation shall be final and determinative.

Project cost categories

This is a list of eligible and ineligible cost categories for reference only. A final determination of eligible and/or ineligible costs will be at the discretion of the ministry.

Municipal infrastructure

Eligible

Municipal economic infrastructure that addresses a community priority (for example, improves an underutilized economic development asset or positions the municipality for new investment).

The project must demonstrate:

  • feasibility (for example, feasibility studies or evidence, or foregone investments)
  • that the investment will lead to private sector investment (target or priority sector) and private sector job creation and/or, if not immediate, must demonstrate readiness for market
  • a gap between market value and costs (that is, need for funding support) or that the project would be a significant portion of the municipality’s five-year capital budget

Business attraction costs

Eligible

  • Business attraction costs (for example, costs to support presentations to investment prospects, or to engage prospects in communities shortlisted for a specific investment). Any business attraction costs spent outside of Ontario are subject to prior written approval by Ontario.
  • Development of presentations, consultation and marketing materials.

Ineligible

  • Acquisition of paid media space.
  • Travel and hospitality.

Project facilities and infrastructure

Eligible

  • Construction and project facility modifications/upgrades, subject to Ontario’s approval.
  • Site servicing, power service upgrades, etc. required to execute the project.
  • For projects where an applicant is expanding or relocating to a larger building (for example, increasing from 30,000 sq. ft. to 50,000 sq. ft. of productive space), only the costs associated with the additional 20,000 sq. ft. of productive space would be considered eligible (for example, prorated).

Ineligible

  • purchase of land or buildings
  • costs associated with landscaping, staff parking lots

Equipment and machinery

Eligible

Equipment and machinery required for the project.

Ineligible

Replacement capital equipment, including office technology used for regular administration.

Labour

Eligible

One-time labour directly related to project costs are eligible (for example, costs to set up or commission new equipment, technology or systems for the project).

Incremental specialized labour that is directly related to the project (for example, research and development) is eligible to a maximum of two years.

This would include Direct salaries, wages and benefits, paid by the recipient, for employees of the recipient working on the project and in proportion to the amount of time spent working directly on the project. Benefits, meaning employees’ regular entitlements for payroll-related benefits (Canada Pension Plan, Employment Insurance, employer health tax), medical and dental-related benefits, the actual cost of sick leave, vacation, statutory holidays and pension. Any other benefits must be approved in writing by Ontario.

The recipient is required to maintain timesheets or appropriate records for all employees working directly on the project to verify time spent on project work, to verify expenditures for audit purposes.

Ineligible

Ongoing operational and production labour costs.

Materials

Eligible

Costs of direct materials necessary for, and specifically identified and measured as being used for, the completion of the project, including:

  • materials used for configuring and testing production processes and systems
  • materials used for training employees
  • materials used for prototypes
  • other materials directly related to the project as approved by Ontario

Ineligible

Materials used for the regular production of saleable items.

Specialized expertise

Eligible

Costs of specialized expertise required for the project including third-party engineering services, software development, management.

Training and talent costs

Eligible

  • skills training, including employer-provided training, related to the project
  • costs to provide skills training (including training materials)
  • training infrastructure (building retrofits for training room or equipment)
  • with limits, costs for recruitment to attract talent required growth (applicant must provide adequate description of costs, activities and objectives)
  • seminars and training expenses that are reasonable and necessary to carry out the project

Ineligible

  • wages of staff for the time they are receiving the training

Training costs supported by Ministry of Labour, Training and Skills Development. Permits and fees

Eligible

Costs incurred by the applicant for permits, inspections, and other fees directly attributable to the project.

Ineligible

Fees attributable to ongoing operations.

Other costs

Ineligible

  • Preparation of funding proposal.
  • Purchase/lease or operation of vehicles or off-site equipment.
  • Shareholder payments.
  • Costs incurred outside of Ontario. Except for purchases from suppliers located outside Ontario.
  • Mergers and acquisitions.
  • Travel, hospitality, meal and incidental expenses.
  • Rebates, credit or refund.
  • Debt service costs, federal or provincial income taxes, surtaxes.
  • Sales or distribution/shipping costs.
  • Costs for in-kind contributions.
  • Overhead costs.
  • Lease costs.
  • Working capital costs for regular production or operations (for example, Inventory or materials).

Information to help complete section F in the application form

Not providing the description could result in the cost being deemed ineligible.

For all cost categories provide a clear description to indicate what makes this cost eligible.

For any cost category in a given year that exceeds $25,000, provide a breakdown of the cost.

Let’s use the cost category “Equipment & Machinery in Year 1” as an example. If the projected eligible cost is $100,000, then the description should state:

  • cutting machine: $35,000
  • two drilling machines: $50,000
  • cleaning machine: $15,000

Now let’s look at the cost category “Training and Talent Costs in Year 1.” If the projected eligible cost is $10,000, then the description should state “required training for 5 employees on the new CNC machine.”