Eastern and Southwestern Ontario Development Funds: Period 24 and What the 15% Loan Is Worth

The Eastern Ontario Development Fund (EODF) and the Southwestern Ontario Development Fund (SWODF) opened Period 24 on November 3, 2026, and applications close on January 21, 2027.

It is easy to read "up to 15%" and think grant. For most established companies, it is a loan, interest-free during the project, with up to 30% forgivable if you hit your targets. We would value it as financing with a conditional rebate, not as free cash.

What the two funds offer in Period 24

Grants exist in only two cases. A small and rural company (company plus related companies under 100 FTEs, in a municipality under 100,000 people or with a density of 100 per square kilometre or less) can seek up to 15%, to $500,000. Strategic new investments can seek up to 15%, to $1.5M, for companies with no Ontario presence or plans at risk from other jurisdictions' incentives, with evidence and an attestation, in "very limited circumstances".

A separate community stream, with its own guidelines, offers municipalities, economic development organizations and sector organizations up to 50%, to a maximum grant of $1.5M. All funding is discretionary and is not an entitlement.

What the 15% loan is actually worth

On those numbers, $90,000 is the only part you may never repay, and you have to earn it. The other benefit is the interest-free period, which depends on your own borrowing rate and how long the project runs. We would have your CFO price it against your bank's quote, then do the same for the post-completion rate.

Financing the rest is the larger job. All financing must be in place at project start, to Ontario's satisfaction. In our view, any bank debt you take on for the $1.7M should show in the cash flow you submit. Ontario requires disbursement conditions to be met first, including evidence of project financing and insurance, and the guidelines do not say when funds flow. We would ask the advisor, and would not assume they arrive ahead of your spending.

Then model the downside. The unearned portion is due immediately after the Project Completion Date, investment shortfalls trigger mandatory prepayments of principal at that date (interest bearing from then), and agreements provide for full or partial repayment if job, investment or payroll commitments are missed. We would run the cash flow with and without the $90,000.

The thresholds that matter

• $11.1M project: 30% forgiveness reaches the $500,000 maximum at a $1,666,667 loan. Above this, the loan can grow but the forgiveness does not.
• $33.33M project: this is the eligible cost needed to reach the $5M loan cap at 15%.
• Minimum projects: $500,000 at 15% is $75,000, and the $200,000 small and rural minimum at 15% is $30,000. We would test whether support at this size justifies the work and the commitments.

Who should apply, and who should not

Eastern Ontario (15 areas): Frontenac, Haliburton, Hastings, Kawartha Lakes, Lanark, Leeds and Grenville, Lennox and Addington, Muskoka, Northumberland, Ottawa, Peterborough, Prescott and Russell, Prince Edward, Renfrew, Stormont, Dundas and Glengarry.

Southwestern Ontario (18 areas): Brant, Bruce, Chatham-Kent, Dufferin, Elgin, Essex, Grey, Haldimand, Huron, Lambton, Middlesex, Niagara, Norfolk, Oxford, Perth, Simcoe, Waterloo, Wellington.

Business minimums

• For-profit legal entity registered to carry out business in Ontario, located or planning to locate in the region
• 3 years of operations and statements
• 10 FTEs, or 5 in a rural community, all T4 (an FTE is 2,000 or more hours a year)
• 5 new FTEs by the end of the project, or a 30% workforce increase if you have under 15 FTEs (10 FTEs must add 3)
• Investment of at least $500,000, or $200,000 if small and rural
• Compliant with all applicable laws, and not owing any fees, levies or taxes to Ontario or its agencies
• A track record of sales of a product or service, at a stage of expanding your offerings

Who is out

Ineligible sectors are primary production (mining, agriculture, forestry), retail, construction, personal services, consulting, electricity generation, waste management, recycling, information and communication services, academic research, and stand-alone restaurants and hotels unless transformative and considered a regional priority. Start-ups are also out. A prior EODF or SWODF project must be complete, an active loan must be in good standing and at least 50% repaid, and related companies of a current recipient are not eligible.

We would also think hard before applying if the project is going ahead regardless, or if the business cannot comfortably commit to the job and payroll numbers.

How to scope a strong project

Eligible projects cover equipment, new technologies, talent and training for productivity and competitiveness; new operations in the region; and expansion with new products, services or markets. Priority goes to projects with regional impacts beyond the company. Maintenance, capital replacement, refinancing, acquisitions and buyouts are out.

Incrementality

Ontario assesses the extent to which government support improves outcomes or changes scope or timelines, along with return on investment to Ontario, regional benefits, job creation, innovation, productivity, revenue growth and new markets, and project risk. We would write down the project with support and without it. In our view, if the two versions are identical, that is a weak case.

Jobs and payroll targets

These targets decide whether you earn the forgiveness and whether repayment is triggered. We would set them from a hiring plan your operations lead has signed off.

Timing

The project start date cannot be earlier than the application period close date, so January 21, 2027 for this intake. Eligible costs must be incurred and paid on or after the funding agreement's project start date and up to completion, so earlier costs do not count. Projects must be between 3 and 4 years in length. The spending period can be less than 3 years but cannot exceed 48 months. We would not place orders or pay deposits on project items until that date is settled.

Eligible costs

• Construction and facility upgrades, subject to approval (for expansions, only the added space)
• Equipment and machinery
• One-time project labour, and incremental specialized labour for up to two years
• Materials for training and prototypes
• Third-party engineering, software development and management
• Project skills training, HR strategy and recruitment (with limits on some of these), permits and fees

Ineligible costs

Land or buildings, landscaping and parking, vehicles or off-site equipment, ongoing production labour, regular production materials, training supported by the Ministry of Labour, Training and Skills Development, wages of staff during training, working capital, legal fees, preparing the funding proposal, shareholder payments, M&A, travel, hospitality, meals, marketing, sales and shipping. Costs outside Ontario are out, except purchases from suppliers outside Ontario.

What to prepare

1. Complete the online self-assessment tool for the business stream. Then speak with a regional advisor. This is required. We would bring job numbers, a cost breakdown and an intended start date, and ask how security will work.
2. Register on Transfer Payment Ontario (TPON).
3. Complete the Part 1 eligibility checklist, then Part 2.
4. Upload the form and documents during intake, signed by someone with authority to bind the company.

Documents

• Cash flow for the project and the four-year repayment period, in a form that allows a debt service coverage ratio (DSCR) calculation
• Articles of incorporation or letters patent, and a corporate family tree
• Three fiscal years of audited statements (preferred) or review engagement statements. Internal statements are accepted only with a parent company's audited or review engagement statements, and a project guarantee from the parent is then required
• TCV number, and optional letters of support

For loans, Ontario assesses whether you generated a positive DSCR in the previous three years and forecast a positive DSCR over the loan term. The forecast is subject to financial due diligence, and the province may use third-party providers at the ministry's expense. We would have your accountant run the DSCR before anyone drafts the application. Compilation statements are accepted only if you are applying for a grant with revenue under $5M, and review statements are required if approved.

Common mistakes

• Budgeting the 15% as a grant. Most of it comes back as repayment, with interest after completion.
• Spending early. A cost incurred or paid before the agreement's start date does not count.
• Thin cost detail. Any category over $25,000 in a year needs a breakdown.
• Rushing a weak file. An incomplete application or material change can defer you to the next intake, and an unsuccessful project may not be resubmitted.

A realistic timeline for Period 24

Our suggested working sequence, which is not an Ontario requirement:

1. Now: confirm region, sector, FTE count and statements, and run the DSCR.
2. Next: book the advisor call and register on TPON. Ontario advises doing both two weeks before the deadline, which is January 7, 2027 for this intake, so earlier is better.
3. After the call: fix the scope, costs, hiring plan and financing plan, and speak with your bank.
4. Before the December holidays: finish the cash flow and collect the corporate documents.
5. Early January: have someone outside the project review the file, then sign and upload well ahead of the deadline.

If the file is not ready by January, we would look at Period 25 rather than force it, because an unsuccessful project may not be resubmitted.

How it fits with other funding

You cannot take other provincial financing for the project, except tax credits, company-wide programs and complementary services. Maximum funding from federal, provincial and municipal sources combined is 50%.

We would map every source against those two rules before finalizing the financing plan, including programs such as the Canada-Ontario Job Grant and the Ontario Innovation Tax Credit. Confirm anything unclear with your advisor, including how the loan counts toward the 50% limit.

Frequently asked questions

What is the deadline for EODF and SWODF Period 24?

Period 24 runs from November 3, 2026 to January 21, 2027, and notification is set for April 20, 2027. You must speak with a regional advisor as part of the process.

Is the Eastern Ontario Development Fund a grant or a loan?

For most companies it is a loan of up to 15% of eligible project costs, to $5M, with up to 30% forgivable to a maximum of $500,000 if targets are met. Grants are limited to small and rural companies and to strategic new investments in very limited circumstances. The Southwestern Ontario Development Fund works the same way.

Who qualifies for EODF or SWODF?

A for-profit legal entity registered to carry out business in Ontario, in or planning to locate in a listed area, with 3 years of operations and statements, 10 FTEs (5 in a rural community), a commitment to 5 new FTEs or a 30% increase if under 15 FTEs, and an investment of at least $500,000 ($200,000 if small and rural). Certain sectors and start-ups are excluded. Funding is discretionary.

Is Durham Region or the GTA eligible?

Not for a project located there. Durham, Toronto, Peel, York and Halton are not on either list. A company based in those areas may qualify by opening a new operation in a listed area, but relocating existing operations within Ontario is ineligible, so confirm with a regional advisor. AMIC is a Regional Development Program stream for advanced manufacturing companies across Ontario, which advanced manufacturers in those areas may want to look at.

Can I stack EODF or SWODF with other funding?

Other provincial financing for the project is not allowed, except tax credits, company-wide programs and complementary services. Funding from federal, provincial and municipal sources cannot exceed 50%, and all financing must be in place at project start.

Do I need a consultant to apply?

No. The ministry says working with an external firm has no bearing on success rate, consultant costs for an application are not eligible, the primary contact must be an employee of the applicant, and a third party cannot submit on your behalf.