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CDAP’s Early Termination and Unspent Funds

News | Feb 27, 2024

CDAP closed - CDAP's Early Termination and Unspent Funds

Image:  CDAP webpage

Ottawa Cancels Digital Upgrade Program Prematurely, Leaving Billions Unspent

The Canadian government has unexpectedly terminated the majority of the Canada Digital Adoption Program (CDAP), a $4 billion initiative aimed at assisting 160,000 small businesses in enhancing their digital capabilities. Despite being a central component of the government's post-COVID-19 recovery plan for businesses, the program saw a premature end due to a significant portion of the funds remaining unspent. This decision has sparked discussions among entrepreneurs, business groups, and industry experts about the program's accessibility, its impact on the digital consultancy sector, and the future of digital adoption in Canada.

Problems?  Complicated Program, Capacity Issues, and Unmet Goals

Why does the CDAP website say "Boost Your Business Technology grant is fully subscribed"(?) when the Globe and Mail reported that the program closed prematurely has billions in unspent funding for small businesses?

Entrepreneurs and business groups labeled the program as confusing and complicated, leading to a far lower than expected participation rate. As of its early termination, over 20,000 microgrants and 21,000 business-plan grants were awarded, totaling $274 million in support, alongside nearly 5,000 businesses receiving $280 million in loans from the Business Development Bank of Canada (BDC) — well below the program's ambitious targets.

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Despite an increase in applications in recent months, the government ceased the program's largest components, citing capacity issues in handling the high demand from business owners. The microgrant program will persist, but larger grants and new loan applications have been halted. This abrupt closure has left many wondering about the fate of the unspent funds and the government's future plans for digital adoption support.

The CDAP inadvertently fostered a burgeoning industry of digital consultants, with over 700 consultants listed in the government's online directory. However, the program's design, which funneled grant money to consultants rather than directly to business owners, received mixed reactions. Some advisors aimed to deliver comprehensive support, while others were accused of aggressive recruitment practices, raising concerns about the program's overall efficacy and ethical standards.

Reaction

Critics express disappointment over the program's early termination and lack of transparency regarding its shortcomings and argue that the program's complex requirements deterred many potential applicants, suggesting that simplifying access to support could have yielded better participation and impact.

Dan Kelly, President CFIB:

"Like most government programs, they have so many rules and requirements that most small companies skip the whole thing."

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Why It Matters

The premature end of the CDAP raises important questions about the government's strategy for digital transformation among small businesses. The program's challenges highlight the need for more user-friendly and accessible support mechanisms that can effectively encourage digital adoption.


NCFA Jan 2018 resize - CDAP's Early Termination and Unspent FundsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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