Innovative Solutions Canada
Eligibility & Details
What this program funds and who can apply
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
Quick Assessment
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
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How to Win
Insider tips, common pitfalls, and what successful applicants look like
Insider TipThe 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. Do NOT reference external websites or supplementary documents; only information in the submission form is evaluated. The inclusivity criterion is worth 20 points (15% of total) and is often undervalued by applicants — describe concrete recruitment programs, internships, or co-op placements for underrepresented groups. For the state-of-the-art section, name specific competitors and quantify your improvements. DND challenges tend to have higher funding caps ($300K Phase 1, $2M Phase 2). With budget cuts reducing available challenges from 2025-26, consider subscribing to the newsletter immediately and applying to every relevant challenge promptly. Subcontracting limits are strict: you must perform at least 2/3 of Phase 1 R&D internally.
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Rejection Pitfalls 12
- Failing to address ALL Essential Outcomes in the challenge notice (mandatory pass/fail — automatic rejection)
- TRL outside the required range (must be TRL 1-4 for Phase 1, TRL 5-9 for Phase 2 entry)
- Innovation does not meet ISC definition (must be new/novel, not incremental improvement of widely available technology)
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Success Profile
Typical winners are Canadian-incorporated SMEs with 10-100 employees, existing R&D capabilities, and a technology at TRL 1-4 that directly addresses a posted government challenge. Strong teams have credentials in the relevant domain, prior government contracting or research experience, and can demonstrate concrete competitive advantages over existing solutions. Ontario-based companies receive disproportionate funding (40-50% of all awards). Environment/circular economy (25%), digital/AI (17%), and health/medical (11%) are the most funded sectors. Companies with experience in government procurement processes have a notable advantage. 85% of 2022 applicants self-identified from underrepresented groups. First-time applicants can succeed but benefit from understanding the challenge-response format.
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Evaluation Criteria
Two-stage evaluation: (1) Mandatory pass/fail criteria — must address ALL Essential Outcomes listed in challenge notice, meet eligibility, and be within TRL range. (2) Point-rated criteria scored out of 130 — must score at least 65/130 (50%). Criteria include: technical merit and state-of-the-art advancement, implementation team qualifications, project plan feasibility, financial proposal reasonableness, commercialization plan strength, benefits to Canada, and inclusivity (20 points / 15% of total). Innovation must be novel, not an incremental improvement of widely available technology.
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Application Playbook
Step-by-step process, required documents, and expenses
Application Steps
Required Documents 21
Eligible Expenses 7
- Internal labour costs (salaries, wages, benefits) for R&D personnel at all-inclusive rates
- Subcontracting costs (capped at 1/3 of Phase 1 R&D budget)
- Materials and supplies consumed during R&D activities
- Equipment rental or lease directly related to the project
- Prototype fabrication and testing costs
- Travel costs directly related to project execution (limited)
- Overhead costs included in all-inclusive labour rates
Ineligible Expenses 6
- Capital equipment purchases (buildings, land, permanent assets)
- Marketing, advertising, and general business development costs
- Costs incurred before the contract start date
- Regular operating expenses not directly tied to the challenge project
- Legal fees for IP filing or patent prosecution
- Costs for preparing the proposal itself
Intake Periods
Challenge-specific — no fixed annual cycle. Federal departments post challenges as needs arise, each with individual closing dates. Volume of new challenges has decreased significantly due to $70M annual budget cuts starting 2025-26. One open challenge as of March 2026 (Space: Advancing Low Earth Orbit Satellite Communication, closing April 7, 2026). Subscribe to ISC newsletter for notifications.
Deadline Notes
ISC operates on a challenge-based model, not a fixed annual deadline. Federal departments post challenges as needs arise. The volume of new challenges has decreased due to significant budget cuts ($70M annually from 2025-26 onwards). Applicants must monitor the ISC website or subscribe to the newsletter. One proposal per challenge unless otherwise stated.
Open Application Portal →Ineligible Organizations
- Non-Canadian companies or those not incorporated in Canada (federal or provincial)
- Not-for-profit organizations and cooperatives
- Companies with more than 499 full-time equivalent employees
- Companies without majority of operations, wages, and senior executives in Canada
- Academic institutions and research organizations (must apply through an SME partner)
- Sole proprietorships and unincorporated businesses
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Funding Stack Strategy
Compatible programs, clawback risk, and combined funding potential
Compatible Programs
Clawback Risk
Low RiskSee which programs combine with this one — and how much more you could get. Unlock with Premium →
How Innovative Solutions Canada Compares
Side-by-side with similar programs
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