Contribution versus grant (Canada)

Canada draws a legal distinction that most other systems do not. A GRANT is paid on the basis that the recipient met the eligibility conditions; there is no detailed accounting of how each dollar was spent and no performance conditions attached to the payment. A CONTRIBUTION is conditional: it is paid against claims for eligible costs actually incurred, it carries performance conditions, and it is subject to audit.

Almost all Canadian support to business is a contribution, not a grant. The word on the programme page is therefore doing real work, and reading past it is how organisations budget for money arriving on signature that in fact arrives quarterly, in arrears, against invoices.

The cash-flow consequence is the one that hurts. Under a contribution you spend first and claim afterwards, so the project is financed from your own working capital for the length of a claim cycle, often a quarter, sometimes longer where a claim is queried. A small company winning a large contribution can be squeezed by its own success.

The conditions are enforceable and specific: eligible cost categories, reporting, evidence of the outcomes promised, sometimes repayment if commercialisation succeeds. Failing them can convert a contribution into a debt.

For a European reader, the closest analogue is not a Horizon grant but a structural-fund contract: reimbursement of audited costs against a defined work plan, run by a national administration, with the money arriving after the work rather than before it.