Updated August 2026 · Verified against Innovation, Science and Economic Development Canada guidelines
✨ declining Milestone-Based Est. 2017
Grant Federal Active

Innovative Solutions Canada

Innovation, Science and Economic Development Canada
Maximum Funding
Phase 1: up to $150,000; Phase 2: up to $1,000,000 (DND...
Challenge-specific — new challenges posted periodically with individual closi...
Visit Official Program →
Difficulty
Hard
Payment
Milestone-Based
Trend
declining
First-Timers
—
Co-Funding
100%
Innovative Solutions Canada provides up to Phase 1: up to $150,000; Phase 2: up to $1,000,000 (DND challenges may be higher). Helps Canadian entrepreneurs bring their innovations to market by connecting them with federal departments and agencies that have a challenge to solve. Challenge-specific — new challenges posted periodically with individual closing dates.
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Real recipient data

Who actually receives this funding

9 businesses received this funding in 2025 — 132 awards since 2018. Typical award: $200K. Half of all awards fall between $150K and $996.5K. 99% of recipients are for-profit businesses. Top sectors among classified recipients: Computer systems design services, Automatic environment control mfg, Communications equipment. Top provinces: Ontario 42% · Quebec 23% · British Columbia 15%. Covers: ISC Challenge Stream (Phase 1 + Phase 2) and Testing Stream R&D contracts disclosed by participating federal departments (ISED, NRC, AAFC). Source: Government of Canada proactive disclosure data · Contains information licensed under the Open Government Licence – Canada · Data through Q3 2026.

The typical Innovative Solutions Canada award is $200K — the median of 132 awards since 2018. In 2025, 9 businesses were funded; 99% were for-profit companies.

9funded in 2025
$200Ktypical award
132awards since 2018
99%for-profit

Award size distribution. Half of awards fall between $150K and $996.5K, with a typical award of $200K.

Award sizes middle 50% of awards
$200K typical $996.5K
Top sectors Computer systems design servicesAutomatic environment control mfgCommunications equipment(of classified recipients)
Top provinces ON 42%QC 23%BC 15%
9 companies received this grant in 2025. See the 22 most recent — and how much each received. Get Premium — $39/mo
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Source: Government of Canada proactive disclosure

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Eligibility & Details

What this program funds and who can apply

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Program Description

Helps Canadian entrepreneurs bring their innovations to market by connecting them with federal departments and agencies that have a challenge to solve.

Eligibility Requirements

  • Incorporated Canadian SME (not-for-profit organizations and cooperatives are ineligible)
  • 499 or fewer full-time equivalent employees
  • Majority of operations, wages, and senior executives located in Canada
  • Innovation addresses a specific active federal department challenge posted on the ISC website
  • Technology is at Technology Readiness Level (TRL) 1-4 at time of application
  • Must perform at least 2/3 of Phase 1 R&D work internally (subcontracting capped at 1/3 of budget)
  • Proposal must address all mandatory Essential Outcomes listed in the challenge notice
Provinces
All Provinces
Industries
Technology Innovation
Business Stage
Startup Growth

Quick Assessment

Difficulty
Hard
Competition
Moderate
First-Timer
Not rated

Funding Details

Amount
Phase 1: up to $150,000; Phase 2: up to $1,000,000 (DND challenges may be higher)
Type
Grant
Level
Federal
Co-Funding
Up to 100% of eligible costs
Deadline
Challenge-specific — new challenges posted periodically with individual closing dates

Program Scorecard

Competition, effort, and approval at a glance

Competition
Moderate
Deadline
Ongoing
Approval
Moderate
Accessibility
--/5
Competition
--/5
Approval Rate
--%
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What's in this Playbook

Everything you need to win Innovative Solutions Canada

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How to Win

Insider tips, common pitfalls, and what successful applicants look like

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Insider Tip

The single most important success factor is directly addressing every Essential Outcome listed in the challenge notice — evaluators cannot infer anything not explicitly stated in your proposal.

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Rejection Pitfalls 12

  • Failing to address ALL Essential Outcomes in the challenge notice (mandatory pass/fail — automatic rejection)
+11 more pitfalls
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Success Profile

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Evaluation Criteria

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Application Playbook

Step-by-step process, required documents, and expenses

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Application Steps

1 Monitor Active Challenges Subscribe to ISC newsletter and monitor the ISC website for new challenge postings from federal departments. Each challenge has its own deadline and requirements.

Required Documents 21

✓ Completed Challenge Stream Submission Form (online portal)
✓ Legal business name, operating name, CRA Business Number (9-digit)

Eligible Expenses 7

Ineligible Expenses 6

Intake Periods

Deadline Notes

Ineligible Organizations

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Funding Stack Strategy

Compatible programs, clawback risk, and combined funding potential

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Compatible Programs

SR&ED Tax Credits NRC IRAP CanExport Innovation BDC Advisory Services Regional Development Agencies Mitacs Canada Digital Adoption Program
Combined Funding Potential See your total funding potential

Clawback Risk

Low Risk
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How Innovative Solutions Canada Compares

Side-by-side with similar programs

Free
Program Amount Difficulty Payment Deadline
Innovative Solutions Canada up to $150,000 Hard Milestone-Based Challenge-specific — new...
NRC IRAP Clean Technology Program $100,000–$500,000 Hard Mixed (Advance + Reimb.) Ongoing
CanExport Innovation Up to $37,500 Moderate Reimbursement Upcoming — the...
Mitacs Accelerate $15,000 per internship unit Easy Advance Payment Ongoing
Strategic Response Fund (formerly Str... Minimum $10 million contribution Hard Mixed (Advance + Reimb.) Ongoing — continuous...

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Frequently Asked Questions

Quick answers to the questions founders most often ask about Innovative Solutions Canada

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Can sole proprietors apply?
No — must be incorporated Canadian SME (not-for-profits/co-ops ineligible). Must have 499 or fewer FTEs and majority operations/wages in Canada.
What's the typical Phase 1 award?
Most Phase 1 awards are at or near the $150,000 cap (average $120K-$150K). Phase 2 averages $500K-$1M; DND challenges may go up to $2M.
Why do applications fail?
Automatic rejection if missing ANY Essential Outcome from the challenge notice. Also fails if TRL outside 1-4 (Phase 1), or innovation is not novel (not incremental).
Do I need matching funds?
No matching required — ISC is a grant. However, must perform 2/3 of Phase 1 R&D internally (subcontracting capped at 1/3 of budget).
Can I stack with SR&ED?
Yes — but must deduct ISC funding from SR&ED claim. SR&ED covers R&D expenses not covered by ISC (e.g., wages beyond ISC budget).

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