The Government of Canada is dedicated to building a strong, green economy by supporting Canadian businesses in the research and development of sustainable clean technologies. Canadians are being urged to bring forward new innovative ideas that will lead to the commercialization of important cleantech solutions across all industries because sustainable alternatives help lower Canada’s carbon emissions and reduce industrial waste.
“Investments in clean technology help harness made-in-Canada sustainable solutions to accomplish two goals at once: create economic opportunities and reduce Canada’s environmental footprint.”
– Navdeep Bains, Minister of Innovation, Science and Industry
Government funding for Canadian businesses developing innovative cleantech solutions is part of the Government of Canada’s Innovation and Skills Plan to help meet climate change goals, reduce the country’s environmental footprint, and continue Canada’s progress as a global leader in clean technology so that all Canadians may benefit from a cleaner country and an advancing cleantech sector.
Government Funding for Canadian Cleantech Solutions
With the need for cleantech solutions rising around the world, so is the prosperous influx of government programs to fund much-needed projects which aim to position Canada into a more sustainable and environmentally friendly state of being.
To help Canada reach and exceed its goals in tackling climate change impacts, here are five government funding programs that are currently available which support Canadian businesses in the research and development of sustainable innovation projects:
The Industrial Research Assistance Program (IRAP) is a government funding program intended to speed up the research and development projects of Canadian innovators. Businesses that are developing and implementing industrial process solutions are the primary recipients to receive research funding contributions through IRAP. However, large-scale technology adoption projects that lead to new, more sustainable capabilities are also considered.
Amount: Contributions of up to 60-80% of internal technical labour and subcontractor expenses.
Eligibility: 1-500 on payroll, incorporated for ≥2 years, committed to internal R&D activities.
Timeline: Projects require approval prior to spend and funding runs from April 1 to March 31 each year.
Project Activities: Development of innovative products, processes, and services. Projects must focus on solving an internal technical challenge by adopting/developing technology & processing enhancements.
ISC provides government grants and procurement contracts to stimulate technology research, development, and commercialization. This program helps Canadian start-ups and small to medium-sized businesses (SMEs) overcome technology development hurdles to produce globally demanded products and services and improve government operations.
Amount: Phase 1: Grants up to $150k; Phase 2: Grants up to $1M; Phase 3: Procurement contracts – no maximum.
Eligibility: For-profit, privately held Canadian businesses with a maximum 499 FTE employees.
Timeline: Ongoing departmental innovation challenges each with a unique application deadline. Phase 1 projects may last up to six months while Phase 2 projects may span up to two years in length.
Project Activities: Proof of concept and prototype development projects to solve federal government departmental innovation challenges. Specific projects depend on challenges currently open for application.
As administered by Next Generation Manufacturing Canada (NGen), this funding program taps into Innovation Superclusters Initiative (ISI) funding to support groups of businesses that develop high potential technologies, create ground-breaking process transformation, and de-risk the adoption of technology to help manufacturers compete globally.
Amount: Offsets up to 44.4% of eligible project expenses. Project costs should be between $1M and $20M, providing non-repayable funding of approximately $444,400 to $8,880,000.
Eligibility: Projects must be transformational in scale or impact, and be of wider benefit to Canada’s advanced manufacturing ecosystem. Must have a minimum of three private-sector project partners; all NGen members.
Timeline: Open two-stage application process including an Expression of Interest (EOI) and, if called forward, a full application. Expected project length is 18-36 months; all projects must be complete by March 31, 2023.
Project Themes: Collaborative technology development and application. Should have wide-reaching impacts that expand the potential of Canadian manufacturers, even those not directly involved in the project.
The SDTC Tech Fund supports Canadian companies, especially clean technology leaders, to research, develop, and demonstrate new environmental technologies that address climate change, clean air, clean water, and clean soil. The average funding awarded has been between $2 million to $4 million.
Amount: A 33% Contribution. SDTC will pay one funding milestone in advance.
Eligibility: A Canadian company planning to undertake a R&D and/or demonstration project to prove emerging and novel clean technologies and innovation. Projects must be in late-stage development / pre-commercialization (TRL 3-7).
Timeline: Continuous intake. Four-to-six milestones in each eligible project.
Project Activities: Projects must lead to significant environmental impacts including GHG emissions reductions, clean air, clean water, and clean soil.
The SIF’s Net Zero Accelerator Program supports rapid decarbonization projects with large emitters, research and development, commercialization scale-up of clean technologies, and acceleration of industrial transformation to help reduce greenhouse gas emissions.
Amount: Up to 50% in grant and/or loan funding for a minimum $10 million project budget.
Eligibility: Businesses must be operating in Canada. Projects can come from any industry sector, but the company should have high growth potential, and projects must result in significant environmental and economic benefits to Canada.
Timeline: Continuous application intake. $3 billion investment will be awarded/earmarked over five years.
Project Activities: Projects should lead to significant environmental impacts and benefits to Canada or support the growth of Canada’s low-carbon economy. Three focus areas include:
- Development/adoption of clean tech for all industrial sectors
- Cleantech development in aerospace and automobile manufacturing sectors
- Development of a Canadian battery innovation and industrial ecosystem
Not all grant and loan programs are perfect for cleantech and innovation. However, the Scientific Research and Experimental Development (SR&ED) program helps Canadian businesses receive tax credits for research and development projects. Over 20,000 SR&ED applicants claim over $3 billion in tax incentives annually.
Tax credits for up to 69% of labour and overhead costs, 36% of contractor costs, and 45% of material costs. All expenses must include labour, contractors, materials, and overhead costs related to the activity required to resolve a technological uncertainty, obstacle, or challenge.
For all eligibility details, including how to apply, visit the Scientific Research and Experimental Development (SR&ED) program page.
Canadian Grants and Loans for Research and Development
Visit our detailed Research & Development Funding page to learn more about the numerous Canadian government funding programs available that support innovative projects across the country by providing financial assistance in the form of grants and/or loans.
Innovation is a mindset that businesses must adopt to remain relevant to consumers. Without research and development, your client base will eventually find more appealing alternatives to your product(s), service(s), and/or solution(s).
Download our free Collaborative Research Project Guide resource to learn more about the processes of Canadian businesses working on innovative research and development products, services, and solutions, and how to maximize project turnaround times by collaborating with other likeminded and motivated organizations.