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Prime Minister Justin Trudeau and Mary Ng, the minister for international trade, export promotion, small business and economic development, make an announcement, in Ottawa, on March 3.Justin Tang/The Canadian Press

The federal government has launched a $4-billion program that includes a package of grants and loans aimed at encouraging small and medium-sized businesses to boost their online sales.

The Canada Digital Adoption Program, announced nearly a year ago in the April federal budget, includes $1.4-billion in grants and advisory services and up to $2.6-billion in loans over four years. Applications for funding opened Thursday.

The national program is modeled after the “Digital Main Street” concept that was launched by the City of Toronto in partnership with local Business Improvement Areas (BIAs), who co-founded the idea in 2014.

Prime Minister Justin Trudeau and Mary Ng, the Minister of International Trade, Export Promotion, Small Business and Economic Development, unveiled details of the program Thursday in Ottawa.

Smaller businesses with at least one employee can apply for a $2,400 “micro-grant” to offset costs such as website development, search-engine optimization, subscription fees for e-commerce platforms and social-media advertising.

A larger “Boost Your Business Technology” grant worth up to $15,000 will be available to companies with revenue between $500,000 and $100-million and fewer than 500 employees.

The government said this grant can be spent in areas such as new customer software, digital inventory management systems, network security improvements and robotics.

In addition to the grant programs, companies can apply for an interest-free loan of up to $100,000 from the Business Development Bank of Canada for digital adoption spending.

Another aspect involves an incentive for businesses to hire young people. The government says it has partnered with Magnet, a not-for-profit organization, to place up to 16,800 students and young Canadians with businesses. The program involves a wage subsidy to employers of up to $7,300 to retain a postsecondary student or recent postsecondary graduate.

“I know taking that first step can be daunting,” Ms. Ng said, in reference to expanding the online presence of a business. “And that’s why we’ve developed a national network of fantastic service providers and youth advisers to help you take advantage of e-commerce, implement an online payment system [and] do that digital marketing to reach new customers in your communities, across Canada, or even around the world.”

Canadian Federation of Independent Business president Dan Kelly said such a program should have been in place earlier to help small businesses manage the loss of in-person customer traffic when the pandemic hit and consumers increasingly moved online.

“As is typical of government, a program to help small firms on their digital journey took forever to put together and will be too late for many,” he said. “The support is welcome and the $2,400 grant does appear to offer flexibility to cover a broad range of digital marketing and e-commerce expenses. But it will be critical to ensure that we don’t put too many hoops in front of businesses in order to access a fairly small amount of funding.”

John Kiru, executive director at the Toronto Association of Business Improvement Areas, welcomed Thursday’s announcement.

His organization runs Digital Main Street programs using existing municipal, provincial and federal funds and will now receive additional federal funding under the expanded program to match businesses with advisers.

Mr. Kiru was also one of the original founders of the concept in 2014. He said small businesses appreciate receiving independent advice on how to invest in technology.

“This is simply an extension, in my opinion, of some of the successes that we’ve had in helping local small businesses adopt [new technology] and we’re very grateful to see the expansion into a federal program because I know while we were doing Digital Main Street here in Ontario and Toronto, we had outreach from a number of jurisdictions right across the country on how we can help them establish the same sort of support programs, and this does exactly that, so we’re very pleased.”

NDP small-business critic Richard Cannings said in a statement that while Thursday’s announcement is welcome, the Liberal government should be doing much more to help small businesses compete online. He noted that the Liberals have yet to act on a pledge to limit merchant fees paid by small-business owners.

“In encouraging a shift to online retail, small businesses would be paying more to the already profitable credit card companies,” he said.

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