What happens to government funding when a plant closes down?

Photo by Alan Levine (CC BY 2.0).

Let’s face it, the Powers That Be can’t win.

When it comes to funding agriculture and food projects, we want support to advance agriculture and build capacity at a local level, but we also want to criticize where every penny (nickel?) goes. And when a company or organization that received funding goes broke or packs up and leaves town, we’re doubly angry that the money handed out doesn’t get returned. Or does it?

The short answer is, it depends.

But the most likely answer is that any government funding that was accessed through a program such as Growing Forward is permanently spent. Government funding programs require an application. There is a detailed contract spelling out what is and is not eligible for funding. Once approved, the party or parties involved front the purchase or expense applied for and are reimbursed, once it’s been verified that the money was spent as was approved. And that’s about it.


There are instances where, depending on the program, a contract may stipulate what happens in the event of a company or business folding within a certain timeframe. In these instances, money or purchased assets MAY be owed to the program.

The Ontario Ministry of Agriculture, Food and Rural Affairs had this to say about what happens to funding once it’s handed out:

“Our government has invested over $24 million through Growing forward 2 (GF2) to help keep Ontario’s agri-food sector competitive. GF2 is a merit-based program. Applicants need to be specific about the results they plan to achieve and demonstrate the knowledge, analysis and planning that will lead to a successful project. GF2 Projects are closely monitored over their lifespan to protect taxpayers’ investment. We build in safeguards through our programs to ensure that funds are properly released to companies after they achieve the agreed-upon objectives. For example, under the GF2 processor stream, funding is provided as a reimbursement only after equipment has been purchased and paid for by the recipient.  Should a recipient fail to meet the terms and conditions set forward in their agreement,  the Province has the ability to explore remedial action against the recipient for breach of the agreement, including clawing back the funding.”

So, there you have it. It’s maybe not the answer you were hoping for, but, and here’s a twist, if you feel very strongly about how these government funding programs are run, it should be noted that they’re each run by a board.

And boards need new members from time to time. Just saying.


Lyndsey Smith

Lyndsey Smith is a field editor for RealAgriculture. A self-proclaimed agnerd, Lyndsey is passionate about all things farming but is especially thrilled by agronomy and livestock production.


5 recommendations to keep Canadian farmland in farmers’ hands

Canada is losing farmland each day. It's not technically disappearing, mind you, it's being bought up, levelled, and paved over for new suburbs and shopping malls. It's also being speculated on, sometimes by surprising buyers — maybe it's local farmers, but more likely by an investment fund looking to cash in on the seemingly endless…Read more »


Leave a Reply