Software Development Grant and Loan Programs

Top Canadian Government Funding Programs for Software Development in 2022

Finding funding opportunities for software development can be challenging, especially as they’re scattered across many government and non-profit websites. Plus, there isn’t one grant that is best for everyone, as each is suited to a specific type of venture, business, or project.

But thanks to our experience with hundreds of clients, we know which Canadian government funding programs are the best for software development ventures and can provide support to make the application process easier for our clients. Mentor Works, a Ryan Company, has summarized the best small business grants and funding support for software development below.

1. Funding for Innovative Software Projects

The following funding opportunities are some of the best for developing software projects with innovative elements. Learn more about what funding your business could access below:

Scientific Research and Experimental Development (SR&ED)

The SR&ED program provides more than $3 billion in tax incentives to over 20,000 claimants each year. It is one of the largest sources of federal government support. The goal of this program is to incentivize business-led research and development projects within Canada.

This program provides tax credits of up to 69% of labour and overhead costs, up to 36% of costs for contractors, and up to 45% for material costs. The expenses must be commensurate with the needs of the scientific research and experimental development activity taking place within the company.

Learn more about the Scientific Research and Experimental Development (SR&ED) program and how your business may be eligible to receive tax credits through this program.

The National Research Council Industrial Research Assistance Program (NRC-IRAP)

The IRAP program is a federal funding initiative that provides grant money towards expediting companies’ innovative research and development projects. This program is administered by the National Research Council and funding contributions are provided by the federal government. Eligible R&D projects are described as being innovative with a level of technical uncertainty.

Businesses can receive up to 60–80% of internal technical labour and subcontractor costs expensed.

Intake periods for the Industrial Research Assistance Program (IRAP) start April 1, ending on March 31 every year. Single-year projects must happen between that timeline, with 12+ months being allowed for larger projects. Unlike the SR&ED program mentioned above, the grant funding provided through this program is proactive, meaning that your business needs to be approved for an eligible project before costs can be incurred.

Learn more about the Industrial Research Assistance Program (IRAP) program and how your business could be eligible to receive funding through this program.

To learn the difference between the Industrial Research Assistance Program (IRAP) and Scientific Research and Experimental Development (SR&ED) funding with our free whitepaper that has been updated for 2022.

2. Business Funding Grants for Hiring Software Developers

This funding opportunity may support businesses who are hiring software developers for current projects.

Canada Summer Jobs

As a way to encourage businesses to provide software development experience to the youth of Canada, the federal government offers a yearly program called Canada Summer Jobs which subsidizes 50% of the provincial minimum wage for workers aged 15 to 30. This is just one of many hiring grant and wage subsidy programs available to Canadian businesses, but we believe it’s one of the best.

The Canada Summer Jobs program typically opens in December and closes in late January or early February, so depending on when you read this article, it may or may not be open for applications. Similar hiring grant and wage subsidy programs have short intake periods and open with considerable notice, so we recommend you register for our newsletter to be notified when Canada Summer Jobs and similar hiring programs open their intake period for new applications.

Learn more about the Canada Summer Jobs program, and other hiring wage subsidies and training grants.

3. Getting Your Innovative Software to Market

We’ve identified a funding opportunity for businesses who want to progress their innovative software to market and into users’ hands. See below:

Canada Media Fund: Experimental Stream

The Canada Media Fund: Experimental Stream assists software development businesses to transform their ideas into concepts, prototypes, development stages, and finally marketing the finished product. Businesses can receive coverage of 50–75% of eligible costs up to a maximum of $1.5M per project phase. The Experimental Stream offers different funding programs to apply to, depending on where your software idea is in its development stage:

  1. Conceptualization (75% of costs up to $15,000)
  2. Prototyping (75% of costs up to $250,000).
  3. Innovation (75% of costs up to $1.5M).

Eligible projects can include video games, mobile applications, web 2.0 or higher, software with connections to Canada’s cultural sector, and audio-visual accessibility projects.

Learn more about the Canada Media Fund: Experimental Stream funding program.

4. Funding for Entering Foreign Markets

Finally, this funding opportunity is optimal for businesses in later stages who have a software product ready to be shared with the world.

CanExport

Software development companies looking to expand their digital products into foreign markets can receive funding towards marketing tools, translators, market research, legal advice, IP protection, certifications, and more through the CanExport program.

Businesses can receive up to 50% of project marketing expenses to a maximum of $50,000.

Businesses eligible for funding through this program need to maintain an annual revenue of $100,000, maintain between 1 – 500 employees, and have at least $20,000 in project expenses. View the full list of eligibility criteria for the CanExport program.

Learn more about grant funding through the CanExport program.

Find More Software Development Grant and Loan Programs

There are far more government funding programs for software development companies than the ones shown here. You can find government funding programs related to business expansion, capital investment & technology adoption, research & development, and hiring and training.

Get help navigating the government funding process by downloading our free slide deck to learn how your business can find government funding programs that are in line with your strategic growth projects.

Navigating the Canadian Government Funding Process

8 Comments

    1. Hi Delkn,

      Most Canadian government funding programs, including those for software developers, require businesses to be incorporated and financially stable for a minimum two years. This shows government reviewers that taxpayer money is being awarded fairly and competitively.

    1. Hi Michael, great question, thanks for asking us – it should be updated soon! Ontario Creates is a provincial funding agency that offers government funding programs to support interactive digital media (software and game) development. Check out their Interactive Digital Media Fund for up to $50,000 to $250,000 in funding. Don’t forget to send us a message if you want to chat about your project and identify ways to optimize the application and reporting processes!

    1. Hi Harshita – Yes, absolutely there are a number of options, including the Industrial Research Assistance Program (IRAP) mentioned in this blog.
      Mentor Works can actually help you build a funding plan directly if you have 15 or more full-time payroll employees and have been incorporated for at least 3 years; let us know a bit more about your company by filling out our Contact Form and we can explore funding options together. If you are a startup, there are also Startup Resources available specifically for young companies.

    1. Hi Vimala – Yes, there are federal and provincial government funding programs specifically created to support software and app development activities within Canada. If you fill out this contact form and provide a bit of a background of the app you are looking to develop/improve, we can help you identify suitable programs.

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