IRAP ARP Canadian Government Research Grants

Update: The National Research Council (NRC) now offers project-based funding through a single Industrial Research Assistance Program (IRAP). Please visit the NRC-IRAP Research Project Contributions page for more information.

Canadian small and mid-sized businesses (SMBs) are often confronted with difficult innovation challenges. Implementing research and development projects helps to increase product and process innovation, however engaging in these projects can often be lengthy, financially demanding, and requiring a diverse team of skilled employees. Since many small businesses often lack the resources or cash flow to pursue innovative projects, the National Research Council of Canada (NRC) offers a range of Canadian government grants for research to help small businesses complete critical research and development activities.

The Accelerated Review Process (ARP) stream of Industrial Research Assistance Program (IRAP) increases business innovation by providing up to 50-80% of eligible project expenses to a maximum $50,000 for projects that revolve around solving an internal technical challenge. IRAP’s ARP research grants cover a portion of labour, as well as third party contractor expenses. The applicant needs to apply and be accepted before commencing their project, which we recommend doing as part of a proactive funding strategy.

Business Eligibility for IRAP ARP Research Grants

IRAP ARP research grants can be accessed by business owners and executives across Canada. IRAP receives funding at the beginning of each government fiscal year (April 1st) and ARP projects can occur anytime within that fiscal year (April 1 to March 31). Businesses eligible for this Canadian government funding program must:

  • Maintain 1-500 full-time employees;
  • Be a for-profit entity;
  • Be federally incorporated for at least two years; and
  • Be dedicated to future research and development activities.

Projects Eligible to Receive IRAP ARP Research Funding

IRAP ARP projects will mainly focus on solving internal technical challenges, such as process or product/technology improvements. Companies completing research projects that lead to new products, enhanced productivity, or new competitive advantages will be given priority access to funds. Types of projects that qualify for this program include:

  • Product prototyping, development, or enhancements;
  • Business process mapping;
  • Supply chain diversification;
  • IP (internet protocol) assessments, planning, and strategy development;
  • New technology/ market feasibility studies; and
  • Advanced technology adoption and adaptation.

Please Note: IRAP ARP projects should start and finish within one government fiscal year, which runs from April 1 to March 31 of the following year. Projects larger than $90,000 or spanning longer than one year in duration should consider applying for IRAP Mid-Size Projects funding.

Eligible Expenses to Submit for IRAP Government Business Grants

The Accelerated Review Process (ARP) stream of IRAP is mainly focused on supporting two types of expenses with research grants:

  • Internal Labour Expenses: up to 80% of technical employee salaries covered; and
  • Third Party Contractor Fees: up to 50% of invoiced labour-based expenses.

Please Note: Project expenses made prior to IRAP ARP program approval will NOT be eligible towards final funding contributions.

Expenses Unable to Receive IRAP ARP Funding Grants

Any non-labour related fees will ultimately be deemed as ineligible to receive funding. Included in this classification are common project expenses such as:

  • Employee training; and
  • Certification costs.

When to Apply for IRAP ARP Research and Development Funding

SMBs who have met the eligibility requirements for IRAP ARP grants may choose to begin the program’s application process. Especially for IRAP programs, understanding when to apply for funding will help businesses to access these funds.

The program will receive a top-up of funds at the start of their fiscal year and award grants until all funds have been invested. Businesses are advised to submit project proposals, including a company overview and an innovation plan, at the start of NRC’s fiscal year on April 1 to ensure priority access to the funds.

Apply for Canadian Government Funding

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Written by

Jeff holds an Honours Bachelor of Business Administration at the University of Guelph. He is passionate about Canadian business, economics, and politics. As Marketing Coordinator for Mentor Works, Jeff educates business leaders about proactive funding strategies.

Comments 10

8 August 2017 Reply

Good Morning

Can you please advise me as to eligibility requirement of at least two years incorporation for consideration in IRAP?

Specifically if I do not meet that eligibility requirement, but have an outstanding new industrial/consumer product but need to access funds for a polished prototype, could you please direct me to any other channel/network that I could be considered for start up funding?

Thank in advance for your prompt reply to my request.

Darwin Donison

8 August 2017 Reply

Hi Darwin,

NRC-IRAP funding can only be accessed by Canadian SMEs that have been incorporated for a minimum of 2 years with between 1-500 employees. IRAP grants must be used to offset internal R&D labour expenses (eg: technical employees).

However, startup resources are available to assist entrepreneurs and young businesses grow. There are very limited government funding resources available for startups, most programs require businesses to be incorporated for at least 2 years to be considered for funding.

1 August 2019 Reply

Does the business have to be federally incorporated one? Business incorporated under provincial act is not eligible for the funding?

6 August 2019 Reply

Hello John,

Thank you for reaching out with this question. The IRAP program requires that companies be incorporated within Canada. This means companies can access the program no matter if they are for federally incorporated or provincially incorporated, as either meets NRC’s requirements.

If you are interested in leveraging our years of experience with the program to help you navigate through the process and have us author your application, feel free to fill out our Funding Contact Form and we can go through your potential project together.

21 August 2020 Reply

Do you have a list of overhead costs that are eligible to claim to avoid any government staking … to keep in the required law

24 August 2020 Reply

Hi Suzanne – Good question. This actually depends on the government funding incentives you’re looking to combine, as some allow specific costs while others don’t allow stacking at all. Please be sure to check each funding program’s application guide to determine overlap and stacking rules and if you need any help, please feel free to contact us.

20 September 2020 Reply

Hello,

My corporation is more than 2 years old but I as an owner worked voluntarily without having a payroll. Will I be eligible for IRAP for paying myself and hiring additional design engineers for a machine that I am developing? Or, if I include myself in the payroll now, will I be eligible?

Thanks,
Arif

21 September 2020 Reply

Hi Arif – For eligible R&D activities, payroll salaries of employees directly involved in the research project would qualify. You will need to calculate the number of hours they would spend on the funded project, as only project-related hours would qualify. Since you are not on payroll, non-payroll labour would be ineligible for funding unless it is from a Canadian research subcontractor that your IRAP Industrial Technology Advisor (ITA) approves. I hope this helps! If you have any additional questions, please feel free to talk to us directly.

17 November 2020 Reply

Hello, as of October 2020, we have been incorporated. Is it still an eligibility requirement to have been incorporated for at least 2 years – or just incorporated as the government NRC website states?

Thanks!

17 November 2020 Reply

Hi Liam – Yes, it’s still a requirement, however there are Startup Resources you should look into for support during this important stage of your business’ growth.

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