Recently, we have noticed more clients reporting delays in receiving reimbursements from the CDAP (Canada Digital Adoption Program) government-subsidized website development grants. Emails sent to Small Business BC, the service provider responsible for administering CDAP in BC, have also gone unanswered. This week, a startling piece of news finally explained the situation.

The well-established nonprofit organization Small Business BC, which has supported numerous small businesses in BC since the time of Expo 86 in Vancouver, has suddenly declared bankruptcy. Their official website is now shut down, displaying only a simple bankruptcy notice:

As a well-known website design and development company in Vancouver, 5U Website has had several clients apply for CDAP through Small Business BC. Although most of our clients have successfully completed their projects and received full reimbursements, a few clients are now affected by this unexpected event. To assist both our clients and other BC-based businesses who applied for CDAP through Small Business BC, we have compiled comprehensive information and guidance. We hope this resource helps you navigate these uncertain times and find the support you need.

 

About the $2,400 CDAP Website Subsidy Program

The CDAP (Canada Digital Adoption Program – Grow Your Business Online) is a nationwide initiative supported by the Federal Government of Canada and overseen by Innovation, Science and Economic Development Canada (ISED). It aims to help small and medium-sized enterprises (SMEs) quickly establish or enhance their e-commerce capabilities to remain competitive in the digital age. Successful applicants can receive up to CAD $2,400 in grants to implement or improve online strategies, including setting up online ordering, electronic payments, SEO optimization, social media advertising, and developing or upgrading e-commerce websites.

What Role Did Small Business BC (SBBC) Play in the Process?

During the implementation of CDAP, the Federal Government and ISED designated certain provincial or regional service providers to handle applications, verify spending plans and receipts, and issue grant reimbursements to qualified businesses. These organizations include:

• Small Business BC (SBBC): As a designated service provider in British Columbia, SBBC was responsible for reviewing applications submitted through its channels, confirming eligible expenses, and ultimately issuing the grant funds.
• Digital Main Street (DMS): DMS is a federally and provincially supported platform that facilitates digital transformation. The CDAP page for BC on the Digital Main Street website still lists SBBC and the Government of Canada as partners, indicating that SBBC was once a key intermediary in the BC CDAP distribution process.
• ISED (Innovation, Science and Economic Development Canada): As a federal oversight body, ISED sets policies, oversees funding, and ensures that provincial service providers like SBBC adhere to federal guidelines.
• Federal Government of Canada: The federal government is the top-level supporter and funder of CDAP, coordinating national distribution and implementation through ISED.

The BC CDAP page on the Digital Main Street website still lists SBBC and the Government of Canada as partners.

The CDAP Application Process for Businesses and Their Collaboration with SBBC

Before SBBC’s bankruptcy, the typical CDAP application and reimbursement process for a BC business was as follows:

1. The business applied for the CDAP grant through Digital Main Street or a related portal, submitting a spending plan outlining their intended e-commerce improvements.

2. Once the application was approved by SBBC (as the service provider), the business and SBBC signed a formal “CDAP – Grow Your Business Online Grant Agreement.”

3. Within a specified timeframe (usually 90 days from the agreement date), the business completed the designated e-commerce-related work and retained all necessary invoices and payment proofs.

4. After completion, the business submitted its reimbursement request and supporting documents via the Digital Main Street platform.

SBBC reviewed these expenses and, if all conditions were met, issued up to $2,400 in grant funds to the business.

The CDAP Agreement Between Businesses and SBBC: Terms on Bankruptcy and Rights

The “CANADA DIGITAL ADOPTION PROGRAM (CDAP) – GROW YOUR BUSINESS ONLINE GRANT AGREEMENT” between the business and SBBC was a formal legal document. It designated SBBC as a federally appointed service provider, responsible for approving projects, verifying costs, and issuing funds. The agreement and the Program Guide outlined:

• Grant disbursements depend on SBBC’s approval and the allocation of federal funds.
• SBBC may cancel or adjust grants if the program is terminated or amended.
• Businesses must comply with the program’s terms, conditions, and eligibility requirements.

However, after carefully reviewing the agreement, there appears to be no explicit clause addressing what would happen if SBBC itself declared bankruptcy—no specific mention of how funds would be handled or what rights businesses would have in that scenario.

In other words, the contract does not clearly protect the business applicant’s rights in the event that the designated service provider (SBBC) becomes insolvent. No official contingency measures have been announced to deal with this unforeseen circumstance.

The Impact of SBBC’s Bankruptcy

On December 5, 2024, Small Business BC abruptly announced bankruptcy and ceased operations. Its website (SmallBusinessBC.ca) now only displays the bankruptcy notice, with MNP Ltd. appointed as trustee. The consequences include:

• Businesses that had submitted reimbursement requests and completed all the required steps but had not yet received their $2,400 grant are now left in limbo. Attempts to contact SBBC via email have gone unanswered.
• With SBBC’s staff laid off and operations halted, ongoing projects, reimbursements, and agreement processes face uncertainty.
• Unlike in BC, where SBBC’s collapse directly impacted CDAP applicants, businesses applying through other provincial service providers—such as Business Link in Alberta or Alacrity Canada in BC—remain unaffected. Their reimbursement processes continue normally.
• Those who already received their CDAP grants and completed their projects have not been affected by this event and have received no additional communication.

What Should Businesses Who Applied for CDAP Through SBBC Do Now?

With no clear answers at the moment, we recommend the following steps for businesses still in the process:

1. Continue With Your Project Work: Despite SBBC’s bankruptcy, you can still fulfill your contractual obligations. Complete the required work (website development, e-commerce integration, SEO, digital marketing, etc.) within the stipulated 90-day timeframe and keep all relevant invoices and records.
2. Submit Your Reimbursement Documents and Keep a Timestamped Record: Follow the original process and submit your reimbursement application, expense reports, and proof of payment through the Digital Main Street platform. This establishes that you have met all the requirements on your end.
3. Stay in Touch With Official Channels and Await Government Guidance: According to official responses, ISED is aware of approximately 700 businesses affected by SBBC’s bankruptcy. ISED is exploring alternative means for these businesses to complete their CDAP work and receive reimbursements.

   ISED has a record of all businesses that applied through SBBC and will communicate next steps once a new solution is in place. Meanwhile, monitor your email, phone calls, and mail for updates. You can also check the CDAP (ISED) and Digital Main Street websites during business hours for the latest information and guidance.

4. Fulfill All Contract Conditions to Prepare for Future Solutions: Ensure you have adhered to all the agreement terms and conditions and submitted all necessary documents. This will help expedite reimbursement if and when a new system or provider steps in to handle payments.

Since CDAP’s funding comes from the Canadian federal government, it is likely that both provincial and federal authorities will seek a solution to help affected businesses. SBBC’s bankruptcy also impacts other initiatives (e.g., Export Navigator), demonstrating significant economic implications for the province and country. We trust that the involved authorities will work to find a satisfactory resolution.

5U Website’s Commitment to Supporting Affected Clients

Most of our clients have already completed all required steps and received their CDAP reimbursements. However, we still have a few clients currently in various stages of the CDAP project—website design, development, SEO, and digital advertising. We will continue to follow the established timelines, complete all projects before their deadlines, and assist in the reimbursement application process by helping consolidate invoices, payment records, and related documents into a single file for easy submission to Digital Main Street.

Just as we have done for clients who have successfully received their grants, we will provide full documentation and demonstrations of completed work when required by the service provider. This ensures our clients are fully supported and can quickly secure reimbursement once the situation is resolved.

Although we are not experts in government funding programs, we believe that both provincial and federal agencies will work diligently to assist all affected businesses. Given the widespread impact on projects like CDAP and others, we remain optimistic that a positive resolution will emerge through coordinated efforts.

If you have any questions, please contact 5U Website. We will stay informed of any developments and continue to guide our clients in preparing and submitting all necessary documentation, ensuring that once new measures are implemented, reimbursements can proceed swiftly.

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News Coverage and Sources Regarding the Small Business BC Bankruptcy

• CTV: Small Business BC goes bankrupt
  https://bc.ctvnews.ca/video/c3044199-small-business-bc-goes-bankrupt
• CBC: B.C. non-profit that supported small businesses declares bankruptcy
  https://www.cbc.ca/news/canada/british-columbia/small-business-b-c-bankruptcy-1.7406076
• CTV News Vancouver: 'Bombshell': Small Business BC abruptly declares bankruptcy
  https://bc.ctvnews.ca/bombshell-small-business-bc-abruptly-declares-bankruptcy-1.7139200
• Daily Hive Vancouver: Governments aim to reclaim nearly $4.4 million in Small Business BC bankruptcy proceedings
  https://dailyhive.com/vancouver/small-business-bc-bankruptcy-creditors-claims
• Business in Vancouver: Small Business BC files for bankruptcy
  https://www.biv.com/news/economy-law-politics/small-business-bc-files-for-bankruptcy-9927331
• Daily Hive Vancouver: Premier David Eby vows accountability after Small Business BC bankruptcy
  https://dailyhive.com/vancouver/small-business-bc-bankruptcy-provincial-accountability
• Daily Hive Vancouver: Small Business BC shuts down amid bankruptcy, lays off workers
  https://dailyhive.com/vancouver/small-business-bc-bankrtupcy-layoffs

 

Related CDAP Grant Resources

• Small Business BC Official Website (now closed): https://smallbusinessbc.ca/
• Digital Main Street (BC page for CDAP applications and reimbursements): https://digitalmainstreet.ca/bc-cdap/
• Canada Federal Government CDAP Website (ISED): https://ised-isde.canada.ca/site/canada-digital-adoption-program/en
• Sample CDAP Service Agreement issued by Small Business BC (PDF)
• Inquiries about SBBC operations:
  • Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
  • Phone: 1 844 265 3987
• ISED (Innovation, Science and Economic Development Canada) contacts:
  • Phone: 613-954-5031 or Toll Free: 1-800-328-6189 from Monday to Friday, 8:30 a.m. to: 5 p.m. (Eastern Time)
  • E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.