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%

Named recipients

Recent recipients of Innovative Solutions Canada include Volta Energy Inc (Scarborough, ON, 2026), Alfapur Technologies Inc. (Sainte Catherine, QC, 2026) and TerraFixing Inc. (Ottawa, ON, 2026).

  1. 2026Volta Energy IncScarborough, ON · Utilities
  2. 2026Alfapur Technologies Inc.Sainte Catherine, QC · Manufacturing
  3. 2026TerraFixing Inc.Ottawa, ON · Chemical manufacturing
  4. 2026VEI ContractingKitchener, ON · Professional, scientific, technical
  5. 2025ChalumeauBoucherville, QC
  6. 2025Dark Matter Materials Inc.Edmonton, AB · Other basic organic chemicals
  7. 2025SaltworksRichmond, BC · Materials recovery facilities
  8. 2025Trium Environmental Inc.Calgary, AB · Waste management services
  9. 2025Facca Inc.Ruscom Station, ON · Heavy and civil engineering
  10. 2024Ekstera Inc.Toronto, ON · Construction
Show 22 more recipients
  1. 2024Qubic Inc.Sherbrooke, QC · Computer systems design services
  2. 2024aiRadar Inc.Vancouver, BC · Computer systems design services
  3. 2024Irreversible Inc.Sherbrooke, QC · Computer systems design services
  4. 2024Plascon Plastics CorporationDelta, BC · Machinery manufacturing
  5. 2024Kinova Inc.Boisbriand, QC
  6. 2024Exonetik Inc.Sherbrooke, QC
  7. 2024E.O.I TechnologiesCalgary, AB
  8. 20231QBitVancouver, BC · Computer systems design services
  9. 20235REDOVancouver, BC
  10. 2023Response Biomedical CorporationVancouver, BC · Automatic environment control mfg
  11. 2023PharmaPlanter Technologies IncBurnaby, BC · Chemical manufacturing
  12. 2022One Lightwave Mfg.Hopewell Hill, NB
  13. 2022E.O.I. Technologies Inc.Calgary, AB
  14. 2022RoswellCalgary, AB · Machinery manufacturing
  15. 2022Sanozone Technologies IncorporatedSherwood Park, SK · Machinery manufacturing
  16. 2021LuminUltra Technologies Ltd.Fredericton, NB · Automatic environment control mfg
  17. 2021Mode40 LtdMitchell, MB · Meat product manufacturing
  18. 2021AnalytikaCalgary, AB · Software publishers
  19. 2021Cole Webber Productions, Inc.Red Deer, AB · Medical equipment manufacturing
  20. 2021Roswell Downhole Technologies IncCalgary, AB · Plastics and rubber mfg
  21. 2021Precision ADM Inc.Winnipeg, MB · Fabricated metal products
  22. 2020Precision Al Inc.Regina, SK
See how much each recipient received, and how each award compares to the typical one. Included in Premium ↓

Source: Government of Canada proactive disclosure

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

  • Challenge stream: incorporated Canadian for-profit SME (not-for-profit organizations and cooperatives are ineligible). Testing stream: a private company, public company, not-for-profit organization, university or individual may submit a proposal
  • Challenge stream: 499 or fewer full-time equivalent employees
  • Majority of operations, wages, and senior executives located in Canada
  • Challenge stream: the innovation addresses a specific active federal department challenge posted on the ISC website. Testing stream: the applicant offers a pre-commercial good or service between TRL 7-9 that the government can buy and test in a real-life setting; entry is through a periodic PSPC Call for Proposals (roughly 2-3 a year), not the challenge form — none was open as of this record's last check.
  • Challenge stream: Technology Readiness Level must match the phase the challenge is open to — TRL 1-4 to enter at Phase 1, TRL 5-9 to enter at Phase 2. Each Challenge Notice states which phase(s) it accepts.
  • Challenge stream: at least 2/3 of Phase 1 R&D work must be performed internally (subcontracting capped at 1/3 of budget)
  • Proposal must address all mandatory Essential Outcomes listed in the challenge notice
  • ISC funds through either a grant or a procurement contract depending on the challenge — the Challenge Notice states which. A contract challenge is governed by the PSPC Call for Proposals EN578-24ISC4; a grant challenge by the ISC Grant Instructions and Procedures. The mechanism changes what you sign, who you email with questions, and whether the government can buy the result.
  • Pre-agreement costs back to the date the proposal was submitted may be considered eligible, at the applicant's own risk until a funding agreement is signed, capped at 20% of total eligible costs.
  • The 499-FTE count includes every affiliated business worldwide, including a foreign parent company and its subsidiaries, in or outside Canada. An FTE is someone receiving a T4 or equivalent at 30+ hours a week, with part-timers counted as fractions.
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
3/5

Moderate — standard application process

Competition
3/5

Moderate competition — prepare a strong application

Difficulty
4/5

Complex — detailed documentation needed

Approval Rate
Processing Time
Budget Trend
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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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How Innovative Solutions Canada judges your application

What the reviewer scores, what gets applications rejected, and what to write.

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Written answers19no length limits stated
Judged on20 criteriascore sheet published
Can reject you12 rules
To attach3 documents

Distilled from 6+ source documents on ised-isde.canada.ca, condensed into one brief. Sources as of 2026-09-03.

6 of the sources

What Innovative Solutions Canada favours

Support early-stage pre-commercial innovations by SMEs answering federal challenges◦

“The Challenge Stream is designed to support the development of early-stage, pre-commercial innovations by small and medium-sized businesses that demonstrate the capacity to develop an innovative solution in response to a challenge issued by a federal department or agency.”

2 more, in their words

The form2 prompts shown

Eligibility certification1 section
  1. 1Program eligibility certificationcheckboxes
Phase 1 proposal questions12 sections
  1. 2Question 1 a: Scope (Phase 1)written answer

    Describe the proposed innovation and demonstrate how it responds to the challenge. Include in your description the scientific and technological basis upon which the solution is proposed and clearly demonstrate how the solution meets all of the Essential Outcomes in the Desired Outcomes section in the Challenge Notice.

  2. 3Question 1b: Scope - Additional Outcomes (Phase 1)written answer

    Demonstrate the scientific and technological basis of how the proposed solution addresses the Additional Outcomes (if identified) in the Desired Outcomes section in the Challenge Notice. If no Additional Outcomes are identified in the Challenge Notice, text entered in this section will not be considered.

  3. 4Question 2: Current Technology Readiness Level (TRL) (Phase 1)selection + written
  4. 5Question 3a: Innovationwritten answer
  5. 6Question 3b: Advance on State of the Artwritten answer
  6. 7Question 4: Phase 1 Science and Technology (S&T) Riskswritten answer
  7. 8Question 5: Phase 1 Project Riskswritten answer
  8. 9Question 6: Phase 1 Project Plantable
  9. 10Question 7: Phase 1 Implementation Teamtable
  10. 8Question 8: Inclusivitywritten answer
  11. 12Question 9: Phase 1 Financial Controls, Tracking and Oversightwritten answer
  12. 13Question 10: Phase 2 Overview (asked inside the Phase 1 proposal)written answer
Financial Proposal (Section D)1 section
  1. DFinancial Proposal (Section D of the Challenge Stream Submission Form)spreadsheet
Phase 2 proposal questions11 sections
  1. 15Question 1 a: Phase 2 Scopewritten answer
  2. 16Question 1b: Scope - Additional Outcomes (Phase 2)written answer
  3. 17Question 2: Proof of Feasibility and Current Technology Readiness Level (TRL) (Phase 2)selection + written
  4. 18Question 3a: Innovation (Phase 2)written answer
  5. 19Question 3b: Advance on State of the Art (Phase 2)written answer
  6. 20Question 4: Phase 2 Science and Technology Riskswritten answer
  7. 21Question 5: Phase 2 Project Riskswritten answer
  8. 22Question 6: Phase 2 Project Plantable
  9. 23Question 7: Phase 2 Implementation Teamtable
  10. 24Question 9: Phase 2 Financial Controls, Tracking and Oversightwritten answer
  11. 25Question 10: Commercialization Strategywritten answer
Challenge-specific attachment1 section
  1. 26Challenge-specific attachment (example: critical components and country of origin)table
Advancement to Phase 21 section
  1. 27Advancement to Phase 2 after a completed Phase 1 - Supplemental Submission Formlist

Innovative Solutions Canada states no length limits for these answers.

25 more prompts, in the funder’s words

Judged against4 questions · 20 criteria

Innovative Solutions Canada publishes its score sheet. in Premium

  1. 1

    Does it meet every Essential Outcome?

    Show them Turn the Challenge Notice's Essential Outcomes list into a checklist and answer each one with the specification, measurement or test result that proves it.◦

    In the funder’s words · 2
    • Q1a Scope - does the solution clearly address ALL Essential Outcomes? (pass/fail)
    • Q1b Additional Outcomes - 10 10
  2. 2

    Is this an innovation at the right TRL?

    What to show, and the funder’s 4 criteria behind it in Premium

  3. 3

    Can this team deliver inside the notice's duration?

    What to show, and the funder’s 5 criteria behind it in Premium

  4. 4

    Beyond the score, would Canada choose this?

    What to show, and the funder’s 9 criteria behind it in Premium

Where applicants failin Innovative Solutions Canada’s words

“The proposal does not clearly demonstrate how the proposed solution addresses all Essential Outcomes identified in the challenge.”
“The proposed solution is an incremental improvement, "good engineering", or a technology that would go ahead in the normal course of product development (i.e. the next version or release).”

9 more, in the funder’s words

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See all 12 rules that can reject you and every criterion you are judged on. Then we draft your application for you.

10 more rules that can reject you · 18 more criteria · 25 more prompts

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Do you pass?13 checks

12 can rule you out; 1 is a preference. Tick the ones you meet.

Your business

  • For-profit company

    For profit

  • Incorporated in Canada

    Incorporated in Canada (federally or provincially)

11 more checks

1 thing this funder says you do NOT need, in Premium.

Documents to attach3

Ticks are kept on this device.

The money

Phase 1 grantup to six months

Phase 1 is the proof of feasibility, up to six months at program level; the Challenge Notice states the available funding and the duration for that challenge.

Phase 2 grantUp to $1M over 2 years

Up to $1M in funding over a maximum period of 2 years at program level; the Challenge Notice sets the maximum funding and the duration for that challenge, and both can be smaller.

Costs never payableLand/buildings, financing, legal, taxes, lobbyist fees

Land acquisition, leasing land, buildings (acquisitions and leasing), renovation or construction, and other facilities, real estate fees and related costs; Financing charges, legal fees (not linked to patenting) and loan interest payments; Any goods and services costs which are received through donations or in kind; Property taxes; Lobbyist fees

Your shareExcess over maximum grant is applicant co-investment

If the applicant's Financial Proposal exceeds the maximum grant funding level specified in the Challenge Notice, any dollar value exceeding the maximum grant funding amounts will be the applicant's commitment of co-investment funding or funding through sources other than the ISC program.

StackingGovernment support capped at 100% of eligible costs

Funding Recipients are required to inform Canada of any government (federal, provincial, territorial, municipal) financial assistance they have requested and/or received towards the Eligible Activities prior to Canada approving an ISC grant. Total Canadian government assistance for all projects, including federal, provincial/territorial and municipal, must not exceed 100 % of eligible costs funded. In no instances will the total Canadian government assistance be allowed to exceed the total of eligible costs. Funding recipients must inform Canada of any government financial assistance (including tax credits) received towards the eligible activities during the project period covered by an ISC grant.

Costs before approvalCosts before signing case-by-case, max 20% eligible costs

Costs incurred before the agreement is signed may be considered case by case, 'but not earlier than the date on which a proposal has been submitted', and 'Retroactively eligible costs must not exceed 20 % of total eligible costs'. Any such spend is at the applicant's own risk until an agreement is signed.

What it pays for · 8
  • salary costs: meaning amounts that are paid, or to be paid by an employer on a regular basis in the undertaking of the project, from which the employer withholds payroll deductions to the proper authorities on behalf of the employee. Salaries can include statutory holidays. Exclusions from salary costs are sick leave, vacation pay, profit, overhead, benefits, incentives and bonuses.
  • contractor's fees and sub-contracts (not to exceed one-third (1/3) of total eligible project costs for a Phase 1 and half (1/2) for a Phase 2
  • travel costs in accordance with the National Joint Council Travel Directive
  • reports and studies
  • overhead (maximum amount of eligible costs is set at 15 %)
  • material cost
  • patenting costs
  • capital costs:... The eligible expense items allowed by the ISC are the cost of utilization/depreciation of capital item (fixed assets) specifically required for the delivery of the eligible project.

From application to money

  1. Find an open challengeChallenge Notices open one at a time
  2. Ask questions earlyQuestions due 10 days before closing
  3. Submit the formSubmit form before closing date and time
  4. Evaluation and poolScore out of 130, 65-point floor
  5. Funding agreementAgree project activities in funding agreement
  6. Report and surveyReports each phase; surveys for 5 years
In the funder’s words · 6
Find an open challenge
Challenge Notices are published one at a time, each with its own opening and closing date and time in Eastern time, and the notice sets the phase and the Essential Outcomes you must answer.
Ask questions early
Responses are published as an amendment to the Challenge Notice on CanadaBuys, so every other applicant sees your question answered too. (no later than (10) ten calendar days before the Challenge Notice closing date)
Submit the form
One completed Challenge Stream Submission Form per challenge, filed in the ISC web-based portal before the Challenge Notice closing date and time. (before the Challenge Notice closing date and time)
Evaluation and pool
Proposals are screened against the mandatory criteria first, then point-rated out of 130 with a 65-point floor, and responsive proposals go into a Challenge Pool of Pre-Qualified Proposals from which Canada may or may not select.
Funding agreement
Canada and the applicant (offeror) will work together to agree on the specific project activities (including deliverables and milestones, where applicable). A funding agreement will contain the project activities
Report and survey
Interim progress reports and a Final Report in each phase, plus business surveys for up to 5 years after the project completes.

Quoted lines are word for word from the source documents; lines marked ◦ are our reading of them.

What's in this Playbook

Everything you need to win Innovative Solutions Canada

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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 9

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

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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 The 2026 intake window...
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; in some cases up to $2M — check the specific Challenge Notice.
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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