CDAP Stream 2

CDAP Stream 2: Frequently Asked Questions (FAQ)

September 16, 2022

As of 13 Septembre 13, 2022

CDAP Stream 2: Boost Your Business Technology

Q: What is the goal of the CDAP program?

A: To increase the competitiveness and productivity of Canadian SMBs through digital technology.

Q: What are the benefits of this program?

A: To help SMBs accelerate their digital transformation, the CDAP program offers grants and access to an interest-free loan:

Grant up to $15,000 for a digital advisor and covering 90% of the cost of developing a digital adoption plan by a CDAP registered advisor.
New graduate wage grant of up to $7,300 to support the implementation of your digital adoption plan.
BDC interest-free loan of $25,000 to $100,000 to fund the implementation of your digital adoption plan. This loan is repayable over 5 years with 12-month deferred payments (total of 6 years).

Please note:

Grants are non-repayable but are taxable.
The maximum loan awarded is $50,000 for businesses with revenues under $5M.
The loan is not guaranteed by the CDAP and is subject to BDC financial criteria.

Q: What are the eligibility criteria for the CDAP?

A: SMBs must meet all following eligibility criteria:

Sole proprietor, who is a Canadian resident, or a business incorporated under the laws of Canada or a province or territory.
Be a private company.
Be a for-profit business.
Have at least 1 full-time equivalent employee (FTE) and no more than 499 FTEs.
(NB: an incorporated “solopreneur” who pays himself a salary for at least 30 hours per week and has already received a year-end T4 is eligible)
Have annual revenues of at least $500,000, but not more than $100 million, in any of the three years preceding the date of application.
Be a Canadian-controlled private corporation (CCPC), as defined by the Canada Revenue Agency (applicable if the business is incorporated under the laws of Canada or a province or territory).
Be a company that complies with human rights codes, labour, environmental and anti-corruption standards, and engages exclusively in legal activities.

Are ineligible:

A company that has a publicly traded class of shares (domestic or foreign).
A branch, sales office or majority-owned or wholly-owned subsidiary of a multinational corporation.
A company whose revenue model is designed to depend economically on non-commercial sources, such as direct government funding or private donations.
A government organization or agency (other than an Aboriginal entity or band), or an entity in which a government organization or agency (other than an Aboriginal entity or band) has an ownership interest.
A not-for-profit entity such as a trade union, a charitable, religious or fraternal organization or a business owned by such organizations, or a business that exists as a fundraising vehicle for charitable organizations.
A business in which interests are held by a current Member of the Parliament of Canada or a current Member of the Senate of Canada (except a business in which the interests are publicly traded).
A company that promotes violence, incites hatred, discriminates on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability, or trades with countries prohibited by the Government of Canada.
A company that directly or indirectly promotes sexual exploitation or disseminates sexually explicit media content.
A company that has been found to have pleaded guilty or been convicted of tax fraud or a criminal offence.

Use the assessment tool to ensure that your business is eligible and meets the grant criteria.

Q: Who can apply for the CDAP program?

A: Only the SMB’s owner or administrator, as indicated in the company incorporation acts, can act as an applicant to complete the application form, and the business will need to meet all eligibility criteria. Applicants must submit their grant application using the CDAP portal. Applications submitted in any other format will not be accepted.

Q: I have multiple businesses. Can I apply to the CDAP program more than once?

A: Yes, however, only one application can be submitted per company, including its subsidiaries.

Q: How long does it take for a CDAP application to be approved?

A: If an SMB submits an application and the applicant verifies their identity through the automated online service (Verify.me), the eligibility of the application would be confirmed instantly. If the applicant cannot verify their identity online through Verify.me, they can request a video conference appointment with a CDAP officer for manual identity verification. The program will then attempt to schedule an appointment for manual identity verification within five (5) business days, not to exceed ten (10) business days.

Q: What does the SMB have to commit to as part of the CDAP program?

A: The main obligations of the SMB are :

Provide basic information at the time of the initial application.
Assess your company’s digital maturity by completing a digital needs assessment.
Accept the grant terms for the digital advisor within six (6) months.
Once you have accepted the grant terms, you will have access to the CDAP Digital Advisor Marketplace and can select a digital advisor to work with to develop your digital adoption plan.
File your digital adoption plan and final digital advisor invoice within 9 months of your acceptance of the grant terms.
For eligible applicants, apply for a BDC interest-free loan within six (6) months of receiving notification of the Digital Advisor grant disbursement to implement the digital adoption plan you submitted to the program.
Applicants must meet eligibility requirements throughout their participation in the program, from submission of the grant application through payment of the grant, to access the BDC interest-free loan and subsidized youth internships.
Applicants must inform program staff of any changes in their eligibility status throughout their participation in the program, from application to payment of the grant, access to the BDC interest-free loan and subsidized youth internships.

Q: With the grant, is the development of a digital adoption plan at no cost to the SMB?

A: No. The grant covers up to 90% of the cost of developing the digital adoption plan by a digital advisor enrolled in the program, up to a maximum of $15,000. The SMB will need to cover the remaining 10% and any cost in excess of $15,000.

Q: Does the $15,000 grant include taxes?

A: Yes. The $15,000 grant includes taxes. The grant covers up to 90% of eligible costs to a maximum of $15,000 (including applicable taxes).

Q: Are digital advisors required to charge for their services based on a prescribed rate or the $15,000 grant?

A: No. Pricing for the development of a digital adoption plan by a digital advisor registered with the program is not governed by the program, nor is it constrained by the grant amount or a prescribed hourly rate. The contractual relationship is between the advisor and the applicant only and pricing will depend on a variety of factors, including the nature and complexity of the SMB.

Q: For the purposes of the 1 to 499 employee requirement, does the owner count as an employee?

A: A full-time equivalent (FTE) employee is defined as an employee receiving a T4 “Statement of Remuneration Paid” from the applicant. An FTE is defined as an employee paid for at least 30 hours per week. Part-time employees should be counted as fractions of an FTE based on their number of hours worked relative to an FTE.

Q: If a business does not yet meet the minimum revenue level requirement, can it apply for the CDAP Stream 2 after meeting the requirement in FY2023?

A: Yes, if they meet the financial requirement in 2023, they could apply for the program the following year. The CDAP is currently approved for the next four years.

Q: How long does the SMB have to accept the terms of the $15,000 grant?

A: Once eligibility is confirmed, the applicant has up to six months to accept the terms of the CDAP grant agreement to develop a digital adoption plan.

Q: What is the timeframe for developing a digital adoption plan?

A: In order to receive the digital advisor grant, the applicant has up to nine months from the time they accept the grant terms to select a digital advisor enrolled in the program, develop their digital adoption plan, and submit the final version of their plan along with the advisor invoice.

Q: Can I use the $15,000 grant to fund work I am already planning to do to improve my company’s technology?

A: No. The grant can only be used for The grant can only be used to pay for a digital consultant to develop a digital adoption plan. This grant cannot be used to cover any other costs. It is the Youth Internship Grant and the BDC interest-free loan that are intended to fund work to implement digital solutions.

Q: If I’m not sure if I want a BDC loan, then is it worth applying under CDAP Stream 2?

A: Possibly. The company can take advantage of the Digital Advisor grant to obtain a digital adoption plan by a qualified advisor with no obligation to obtain a BDC loan.

Q: Does the agreement between the digital advisor and the SMB need to be approved by the CDAP?

A: No. The agreement must be signed between the digital advisor and the SMB and does not need to be approved by CDAP. The SMB only needs to upload the completed digital adoption plan and invoice to receive the grant.

Q: Is it necessary to establish an agreement with the digital advisor?

A: Yes. All digital advisors have been required to agree in writing to the terms and conditions of the agreement to provide digital advisory services to the program. An agreement must be formalized between the SMB and the digital advisor before the advisor begins working on a digital adoption plan for said SMB. Written agreements should include:

The objectives of the digital advisory services to be provided.
A work plan that includes milestones and deliverables as well as timelines.
The minimum effort and activities that the SMB will be required to perform to meet the CDAP criteria.
The roles, responsibilities and efforts of each proposed advisor.
Proposed fees and a payment schedule.

Q: Will the digital advisor be paid only after I receive the grant?

A: Not necessarily. The applicant can only require the digital advisor to be paid for their services once the grant is awarded. The contractual relationship is between the advisor and the applicant only. The grant should be viewed as a partial reimbursement for costs incurred. The applicant must also ensure that any contractual agreement with the digital advisor addresses the scope of work and costs directly related to the production of the digital adoption plan, and that the digital advisor will provide a digital adoption plan that complies with program requirements. To receive the grant, the applicant has up to 9 months to submit a compliant digital adoption plan and the invoice containing the final cost of the digital adoption plan developed by a digital advisor on the Digital Advisor Marketplace list. SMBs will then be reimbursed for up to 90% of the cost of developing the digital adoption plan, up to $15,000.

Q: How does it work to get the digital advisor grant?

A: The eligible SMB submits its digital adoption plan and the total invoice for its digital advisor on the CDAP portal. If the plan is approved, the SMB will receive the grant within 30 days of submitting the documents. The eligible SMB is responsible for paying the digital advisor. Invoice details and payment dates must be agreed upon between the SMB and the advisor.

Q: What happens if the digital adoption plan is not approved?

A: If there are issues with the digital adoption plan, CDAP will work with the SMB and the digital advisor to resolve the issues. The plan can be modified if necessary.
(NB: Pragmatik Advisory Services guarantees that the digital adoption plan it develops for its clients will meet the criteria of the CDAP program).

Q: Does the digital adoption plan include recommendations or selection of specific products (RFP)?

A: No. Recommendation and selection of specific solutions (or RFP) is not within the scope of the digital adoption plan. Digital advisors cannot recommend specific vendors (or specific solutions) in digital adoption plans. The goal is for the plan to be a stand-alone, independent document that the SMB can use without feeling like they are being directed to a specific vendor or software solution, or being dependent on the digital advisor for implementation. Digital adoption plans should therefore be vendor neutral.

Q: Does the digital adoption plan include a detailed implementation plan?

A: No. Since the approach to implementing specific solutions is vendor dependent, these activities are part of what is to be funded by the BDC loan. The roadmap in the digital adoption plan is a comprehensive, high-level plan. The exact composition of each digital adoption plan will vary depending on the business activities of each SMB. The CDAP Digital Adoption Plan Guide sets forth guidelines that define compliance standards for digital adoption plans.

Q: Exactly what will I get from a digital advisor under the CDAP Stream 2 program?

A: A business case with a road map. The purpose of the digital adoption plan is to focus and justify your investments in new technologies. The plan provides an overview and diagnosis of your business, recommendations on the areas of your business that are most likely to benefit from digital solutions to support your SMB’s operations, a high-level roadmap for implementing the recommendations, and a cost estimate. Optionally, the plan can also make explicit the key features of the digital solutions to be selected, the requirements for successful implementation (funding, change management, skills required), and recommendations related to cybersecurity.

Q: What costs does the BDC loan offered through the CDAP Stream 2 program cover?

A: The loan can be used to cover items directly related to the implementation of the digital adoption plan. Examples include: acquisition of computer equipment, installation of new technology, upgrading or expansion of computer equipment, training of staff on integrated technologies, equipment and support services directly related to technology integration, additional consulting services on specific elements of the digital adoption plan (coaching, change management, project management, etc.).
Note: On a case-by-case basis, the program may consider supporting the inclusion of additional eligible costs.

Q: What are the prerequisites for the youth wage subsidy up to $7,300?

A: A SMB is eligible for a youth placement provided they meet the program’s eligibility criteria. You must be approved for a digital adoption plan grant or have a digital adoption plan developed through one of the programs recognized by the Canadian Digital Adoption Program (CDAP) that is less than one year old. Once this is confirmed, the SMB will be redirected to the youth placement provider.

Q: What programs are recognized by the Canadian Digital Adoption Plan (CDAP)?

A: Currently, the programs recognized by the CDAP are:

Industry 4.0 Audit Program (French only).
Digital Boost 2.0.
Atlantic Canada Opportunities Agency: Digital Acceleration Pilot Project.
Prince Edward Island: Digital Acceleration Fund.
BDC Advisory Services.

CDAP is continually identifying equivalent digital adoption programs across the country and will add them to the list of approved programs on an ongoing basis.

Q: Can an SMB apply for the Youth Wage Subsidy only?

A: No, the Youth Wage Subsidy is intended to help SMBs implement their digital adoption plan.

Q: Can SMBs apply for both provincial and federal grants?

A: SMEs participating in the CAP 4.0 program or other recognized equivalent program can receive both grants provided that the digital advisors are registered and eligible for both programs.

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Enjoy your digital adoption!