The application is where owners spend their effort: the business case, the budget, the jobs you will create. The province's answer comes as an approval letter and a contract, and the contract is usually signed in a hurry because the project is already behind. That gets the order wrong: the application is a pitch, while the funding agreement is a set of promises with a repayment formula attached, and it binds the company for years after the money is spent.
With several Ontario programs open this fall — the Eastern and Southwestern Ontario Development Funds take applications from November 3, 2026 to January 21, 2027, and the tariff-relief programs were widened in August and September — this is a good time to know what you will be asked to sign.
What Ontario publishes about its funding agreements
Ontario is unusually candid about this. The Regional Development Program guidelines set out the key terms of the business funding agreements for the Eastern and Southwestern Ontario Development Funds, and the Advanced Manufacturing and Innovation Competitiveness stream publishes a similar list. The province also says the terms are subject to change, so the agreement you receive is the one that counts.
| Term | What the published terms say | What to check in your agreement |
|---|---|---|
| Job and investment targets | Grants are clawed back pro rata if targets are not met by the Project Completion Date; for loans, the forgivable portion shrinks | How "job" is counted (full-time equivalents? at one date or averaged?) and whether the target survives a downturn |
| Events of default | Include closure of any Ontario facility and failure to maintain the agreed employment footprint | Whether consolidating two locations counts as a closure; what cure period you get |
| Payments | An initial payment of up to 20% at Ontario's discretion; for grants, a performance payment of usually 20% or more after completion | Your cash flow without the final 20%, and what triggers its release |
| Reporting and audit | Annual financial statements and project status reports; possibly a third-party auditor's certificate at the recipient's expense | The audit cost in your budget; record-keeping for eligible costs and payroll |
| Security | A guarantee or security in a form acceptable to Ontario may be required | Who gives the guarantee (the parent? you personally?) and how it ranks against your bank |
| Conditions before money flows | Proof of insurance of at least $2 million and confirmed sources of project financing | Whether your bank financing is actually committed, not just discussed |
The terms that cause the trouble
The employment footprint. Job-creation targets get the attention, but the covenant that bites most often is the promise to maintain employment. A recipient that grows on schedule and then, three years later, restructures or automates can find itself in default on a project that was a success. The fix is in the drafting: a measurement method that reflects how your business actually hires, and a clear statement of what happens if the economy, not the company, misses the number.
Facility closure. "Closure of any Ontario facility" is broad. An owner who moves two leased units into one building, or closes a satellite warehouse, should know before signing whether that is a default.
Security and your lender. If Ontario asks for a general security agreement or a guarantee, your bank's loan agreement probably restricts both. A negative pledge in the credit agreement can make the province's security a default under the bank loan. Get the lender's consent first, and agree on priority in writing.
Selling the business. The published terms do not address a change of control, which is a reason to read the agreement, not a reason to relax. A buyer's lawyer will ask about every government agreement in due diligence, and an unexpired clawback is either a price reduction or a condition of closing. If a sale is possible in the next five years, negotiate how the agreement is assigned or released now, while the province wants the project to proceed. The selling a business hub covers the rest of what buyers look for.
Stacking. Programs have rules about combining provincial money. The Southwestern Ontario Development Fund cannot be stacked with other provincial programs. The Protect Ontario Financing Program allows federal stacking but limits combining with other provincial programs to projects that were already approved. A business that applies to two programs for the same costs can lose both.
The programs open now
- Eastern and Southwestern Ontario Development Funds — intake November 3, 2026 to January 21, 2027. The eastern fund asks for at least three years of operations, at least 10 employees (5 in rural Ontario), at least 5 new jobs (or a 30% increase for companies under 15 employees), and a project investment of at least $500,000 ($200,000 in rural Ontario).
- Ontario Together Trade Fund — for businesses hit by U.S. trade disruption that are diversifying markets, reshoring supply or pivoting production. Ontario may cover up to 75% of eligible costs, to a maximum of $5 million, as a grant or loan; the province reserves the right to offer a loan instead of a grant.
- Protect Ontario Financing Program — term loans for tariff-related working capital (payroll, leases, utilities), with third-party due diligence. Eligibility was broadened on August 24, 2026 and again in September.
The full list of federal and provincial programs is in the government funding directory, and the programs that have quietly closed are in Canadian funding programs that no longer exist. If tariffs are what sent you looking for money, the contracts side is covered in tariffs and supply contracts.
What a funding-agreement review covers
I review government funding and loan agreements on a fixed fee: the targets and how they are measured, the default triggers, the security and its effect on your bank, the reporting load, and what happens on a sale or reorganization. Where a term can be negotiated — and measurement methods and consent provisions often can — I tell you which ones and draft the ask. Where it cannot, you sign knowing the cost.
New intakes and program changes are tracked each month in Money for Business.
The province is generous with the money. It is precise about getting it back.
Common questions
Do Ontario business grants have to be repaid?
Not if you meet the agreement's commitments. Ontario's published terms for its Regional Development Program provide for pro rata clawbacks of grants if job or investment targets are not met by the Project Completion Date, and for reduced forgiveness on loans. Defaults, such as closing an Ontario facility, can also require repayment.
What is an event of default in an Ontario funding agreement?
Ontario's published key terms list closure of any Ontario facility and failure to maintain the agreed employment footprint as events of default. The actual agreement will contain a fuller list, usually including insolvency, misrepresentation and breach of reporting obligations.
Will I have to give a personal guarantee for an Ontario government loan?
Possibly. Ontario says a guarantee or security in a form acceptable to the province may be required depending on the support provided. Check who is asked to give it, and whether your bank's loan agreement allows it.
Can I combine provincial funding programs?
Often not. The Southwestern Ontario Development Fund cannot be stacked with other provincial programs. The Protect Ontario Financing Program allows federal stacking and limits provincial stacking to previously approved active projects. Each program's guidelines set its own rule.
When is the next Eastern or Southwestern Ontario Development Fund intake?
The application period runs from November 3, 2026 to January 21, 2027.
What happens to a funding agreement if I sell my business?
It depends on the agreement. Ontario's published key terms do not address a change of control, so the specific agreement governs. A buyer will review it in due diligence, and unmet commitments or consent requirements can affect the price or the closing.
How much of an Ontario grant is held back?
For grants under the Regional Development Program, Ontario usually holds a performance payment of 20% or more until the project is complete. It may also make an initial payment of up to 20% at its discretion.
Should a lawyer review a government funding agreement?
If the agreement includes job targets, security, a guarantee, or restrictions that could affect a future sale or financing, a review before signing is inexpensive compared with a clawback. Some terms, such as measurement methods and consent provisions, can be negotiated.