The Industrial Research Assistance Program (IRAP) is a Canadian research grant that helps companies perform innovative projects with federal government support. As administered by the National Research Council of Canada (NRC), IRAP helps de-risk technology development and adoption/adaptation projects. By accessing IRAP funding, companies can expand research budgets and invest more in experimental projects that lead to new business opportunities.
NRC-IRAP research grants support SME projects that involve technological risks or uncertainties. Projects must propose how the use of innovative products or processes will drive measurable results.
While it may seem that the scope of support is limited, NRC-IRAP funding can be used to support many research and development-oriented projects. This includes, but is not limited to technology development, market assessments, and technology validation. Additionally, projects must meet certain impacts such as employee and incremental revenue growth.
What is the NRC Industrial Research Assistance Program?
Since 1947, the Industrial Research Assistance Program (IRAP) has been a primary mechanism used by Canada’s federal government to stimulate innovative research projects. Approximately 3,000 Canadian small and medium-sized businesses receive funding each year to address technological risk or uncertainties that impact earning potential. Projects typically include adopting and adapting advanced technologies, researching and developing new innovations, and developing strategic plans for enhanced productivity.
NRC-IRAP can offset up to 50-80% of eligible research and consulting costs to a maximum $10 million in Canadian government grants. Average contributions often range from $150k to $350k.
The program process includes identifying a key technological risk or uncertainty facing your company, meeting with an IRAP Industrial Technology Advisor (ITA) to discuss your project, working with the ITA to develop a formalized project plan, then implementing the plan with a combination of company cash and Canadian government funding contributions. Once a project is complete, it’s expected that the company has a commercialization plan in place to profit from its results.
What Projects are Ideal for NRC-IRAP Research Funding?
One of the most critical components of the NRC-Industrial Research Assistance Program is that companies work with an Industrial Technology Advisor (ITA) to conceptualize the project. ITAs usually meet at your business to discuss the project and identify if it’s a good fit for funding. If it is, the business is invited to create and submit a funding proposal. Proposals are evaluated for innovation and economic impacts, with high-impact projects being approved. Eligible project expenses can be claimed monthly as the project progresses towards completion.
One of the early stages in this process is pitching your project idea to an IRAP ITA.
Being successful in this meeting requires your business to understand what IRAP supports. Pitching an eligible project concept improves the chances of your ITA providing a proposal template for your business to complete; therefore, ensuring your eligibility prior to this meeting is essential.
We recommend aligning your project to one of three areas where your project needs the most support, including:
Market assessments use a technology-focused lens to predict the impact of an innovation if it’s developed. This is where many companies start if the innovation will be sold to other companies; therefore, market assessments are best positioned for innovative technology firms where the goal is to commercialize a product. Market assessments can focus on the Canadian or international market as aligned to the business’ overall strategic plan. Some concepts addressed through market assessments are:
- Feasibility studies to understand the market into which companies will be selling their product;
- Determining what features are most critical to the market;
- Competitor analysis; and
- Market entry and supply chain analysis studies.
Technology validation projects are less consumer/end-user oriented, and are instead focused on proving the need for (and effectiveness of) a given technological solution. Gaining proof of a technology’s capabilities could require an early adopter, or may be made possible through simulated test environments. Technology developers and innovative businesses of all kinds can complete technology validation projects to ensure a proposed solution actually has the potential to bring sustainable benefits, and can include activities such as:
- Receiving engineering and business advice;
- Business process mapping; and
- Prototype testing.
Research and Technology Development
Research and technology development projects are the most popular NRC-IRAP category that receives innovation funding. While it also supports technology assessments and validation activities, IRAP provides most of its funding prototype development and bringing the innovation to a point of commercial readiness. It’s expected that these projects leverage NRC-IRAP funding to improve technology outcomes and support a wider economic impact for the company through employment and revenue growth. Typical activities include:
- Prototype development;
- Prototype testing;
- Prototype enhancements; and
- Final modifications as necessary to address the technology’s purpose.
Next Steps: Learn More About NRC-IRAP Research Grants
Most Canadian businesses have two key government funding options when it comes to reducing innovative project costs. NRC-IRAP research grants are one option, with the other option being the Scientific Research and Experimental Development (SR&ED) tax credit. Both programs can benefit businesses, and they can even be “stacked” or applied together to offset the greatest portion of overall research and development project costs.
It’s critical to understand the benefits of IRAP and SR&ED, how to qualify for each, and which one is best to use given your research project requirements.
To help you understand the major differences of each program, we’ve created a free IRAP vs. SR&ED resource that breaks down each program based on how much funding they provide, eligibility criteria, and the application and assessment process. With this information, you’ll be better positioned to move ahead with research and innovation funding.