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

ISC Challenge Stream (Innovative Solutions Canada)

Innovation, Science and Economic Development Canada (ISED)
Maximum Funding
Phase 1: up to $150,000 (some up to $300,000); Phase 2: up to…
Challenge-specific — subscribe to ISC newsletter and monitor ised-isde.canada...
Visit Official Program →
Difficulty
Hard
Payment
Milestone-Based
Trend
declining
First-Timers
—
Co-Funding
100%
ISC Challenge Stream (Innovative Solutions Canada) provides up to Phase 1: up to $150,000 (some up to $300,000); Phase 2: up to $1,000,000 (DND challenges up to $2,000,000). Federal departments post R&D challenges; eligible Canadian SMEs submit Phase 1 feasibility proposals (up to $150,000, TRL 1–4). Challenge-specific — subscribe to ISC newsletter and monitor ised-isde.canada.ca/site/innovative-solutions-canada/en for open calls.

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Real recipient data

Who actually receives this funding

9 businesses received this funding in 2025 — 130 awards since 2018. Typical award: $200K. Half of all awards fall between $150K and $995K. 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 43% · Quebec 24% · British Columbia 15%. Covers: ISC Challenge Stream (Phase 1 + Phase 2 across ISED, NRC, AAFC) — same disclosure population as catalogId 8; Challenge Stream not separable from Testing Stream at the prog_name_en level. Source: Government of Canada proactive disclosure data · Contains information licensed under the Open Government Licence – Canada · Data through Q4 2026.

The typical ISC Challenge Stream award is $200K — the median of 130 awards since 2018. In 2025, 9 businesses were funded; 99% were for-profit companies.

9funded in 2025
$200Ktypical award
130awards since 2018
99%for-profit

Award size distribution. Half of awards fall between $150K and $995K, with a typical award of $200K.

Award sizes middle 50% of awards
$200K typical $995K
Top sectors Computer systems design servicesAutomatic environment control mfgCommunications equipment(of classified recipients)
Top provinces ON 43%QC 24%BC 15%

Named recipients

Recent recipients of the ISC Challenge Stream 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 23 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
  23. 2019Titan Clean Energy Projects Corp.Craik, SK · International and territorial
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

Federal departments post R&D challenges; eligible Canadian SMEs submit Phase 1 feasibility proposals (up to $150,000, TRL 1–4). Phase 2 prototype contracts (up to $1,000,000, TRL 5–9) awarded to successful Phase 1 companies. 100% funded, no matching required.

Eligibility Requirements

  • For-profit entity incorporated in Canada (not-for-profits and cooperatives ineligible)
  • Fewer than 500 full-time equivalent employees
  • 50%+ of annual wages allocated to Canada-based workers
  • 50%+ of FTE employees with Canada as principal workplace
  • 50%+ of senior executives with Canada as principal residence
  • R&D conducted within Canada
  • Innovation at TRL 1–4 for Phase 1 (feasibility); TRL 5–9 for Phase 2 (prototype)
  • Must respond to a specific open government challenge posted on ISC website. At least 2/3 of Phase 1 R&D and at least 1/2 of Phase 2 R&D must be performed by the applicant; the remainder may be subcontracted, and subcontractors need not meet program eligibility.
  • The 499-FTE limit is counted across all affiliated businesses worldwide, including a parent company and sister subsidiaries — a small Canadian subsidiary of a large foreign group does not qualify.
Provinces
Industries
Business Stage
Startup Growth

Quick Assessment

Difficulty
Hard
Competition
Moderate
First-Timer
Not rated

Funding Details

Amount
Phase 1: up to $150,000 (some up to $300,000); Phase 2: up to $1,000,000 (DND challenges up to $2,000,000)
Type
Grant
Level
Federal
Co-Funding
Up to 100% of eligible costs
Deadline
Challenge-specific — subscribe to ISC newsletter and monitor ised-isde.canada.ca/site/innovative-solutions-canada/en for open calls

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.

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Rejection Pitfalls 9

  • Failing to address ALL Essential Outcomes in the challenge notice (mandatory pass/fail — automatic rejection)
+8 more pitfalls
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Success Profile

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Evaluation Criteria

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How ISC Challenge Stream (Innovative Solutions... judges your application

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

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Written answers10no length limits stated
Judged on12 criteriascore sheet published
Can reject you12 rules
To attach2 documents

Distilled from 6+ source documents on ised-isde.canada.ca, condensed into one brief. Sources as of 2026-09-04.

6 of the sources

What ISC Challenge Stream (Innovative Solutions... favours

Solution in scope and addresses all Essential Outcomes◦

“Pass: The proposed solution is within the scope for the challenge, and clearly addresses all Essential Outcomes identified in the Challenge.”

2 more, in their words

The form2 prompts shown

Eligibility screen1 section
  1. 1Eligibility criteria (self-screen before the form)checkboxes
Phase 2 questions12 sections
  1. 1 aQuestion 1 a: Phase 2 Scopewritten 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. 2Question 2: Proof of Feasibility and Current Technology Readiness Level (TRL)selection + written

    Indicate the current TRL of the proposed solution. (Drop Down Menu of the Challenge Stream Submission Form); Describe the research and development activities that have taken place to prove the solution's feasibility and bring the proposed solution to the stated TRL.

  3. 3 aQuestion 3a: Innovationwritten answer
  4. 3 bQuestion 3b: Advance on State of the Artwritten answer
  5. 1 bQuestion 1b: Scope (Additional Outcomes)written answer
  6. 4Question 4: Phase 2 Science and Technology Riskswritten answer
  7. 5Question 5: Phase 2 Project Riskswritten answer
  8. 6Question 6: Phase 2 Project Plantable
  9. 7Question 7: Phase 2 Implementation Teamtable
  10. 8Question 8: Inclusivitywritten answer
  11. 9Question 9: Phase 2 Financial Controls, Tracking and Oversightwritten answer
  12. 10Question 10: Commercialization Strategywritten answer

ISC Challenge Stream (Innovative Solutions... states no length limits for these answers.

11 more prompts, in the funder’s words

Judged against4 questions · 12 criteria

ISC Challenge Stream (Innovative Solutions... publishes its score sheet. in Premium

  1. 1

    Does the solution fit this challenge and clear the gates?

    Show them Copy the challenge's Essential Outcomes verbatim and tie each one to the science, the architecture and test data, and state your current TRL with the R&D that produced it.◦

    In the funder’s words · 3
    • Pass: The proposed solution is within the scope for the challenge, and clearly addresses all Essential Outcomes identified in the Challenge.
    • Pass: The Applicant (offeror) has demonstrated that the proposed solution is currently between TRL 5 to 9 (inclusive), and provided justification by explaining the research and development (R&D) that has taken place to bring the solution to the stated TRL, proving the solution's feasibility.
    • Pass: The proposed solution meets one or more of the ISC definitions of innovation.
  2. 2

    Is it genuinely new, not just the next release?

    What to show, and the funder’s 2 criteria behind it in Premium

  3. 3

    Can they deliver within the notice's limits?

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

  4. 4

    Will it sell after Phase 2?

    What to show, and the funder’s 3 criteria behind it in Premium

Where applicants failin ISC Challenge Stream (Innovative Solutions...’s words

“The proposed solution is poorly described and does not permit concrete analysis.”
“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).”

7 more, in the funder’s words

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10 more rules that can reject you · 9 more criteria · 11 more prompts

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Do you pass?12 checks

Each one can rule you out. Tick the ones you meet.

Your business

  • 499 or fewer FTE employees

    Small and medium sized business with 499 or fewer full-time equivalent (FTE) employees

  • Half of payroll paid in Canada

    50% or more of its annual wages, salaries and fees are currently paid to employees and contractors who spend the majority of their time working in Canada

10 more checks

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

Documents to attach2

Ticks are kept on this device.

The money

MINERVA-UGS ceiling$500,000.00 CAD

Maximum funding: $500,000.00 CAD

Infrared Quantum ceiling$1,500,000.00 CAD

Maximum funding: $1,500,000.00 CAD

Your shareUp to 100% of eligible costs

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.

StackingDisclose all government assistance before approval

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.

Costs before approvalRetroactive costs up to 20% eligible costs

On a case-by-case basis, Canada may consider supporting the inclusion of eligible costs a recipient incurred prior to the signing of the funding agreement but not earlier than the date on which a proposal has been submitted. Retroactively eligible costs must not exceed 20 % of total eligible costs. Canada will not be obliged to pay incurred costs in the event an application is rejected.

What it pays for · 1
  • 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
What it does not pay for · 1
  • Lobbyist fees

From application to money

  1. Pick your challengeConfirm eligibility and self-assess TRL
  2. Submit in the portalSubmit by listed 14:00 ET deadlines
  3. Pass/fail then scoringMandatory pass, then 65 of 130
  4. Sign the funding agreementSign funding agreement before costs eligible
  5. Progress reportsProgress reports during project
In the funder’s words · 5
Pick your challenge
Read the notice's Funding mechanism line, confirm the eligibility criteria and self-assess against the ISC TRL scale to learn which phase you may enter.
Submit in the portal
Complete the Challenge Stream Submission Form in the portal before the closing time, which is stated on the notice to the minute in Eastern time. (2026-09-10, 09-15, 09-21, 09-21, 09-24 and 10-05, all at 14:00 ET)
Pass/fail then scoring
Part 1's mandatory criteria must all be passed before Part 2's points are read, and 65 of 130 is the overall pass mark.
Sign the funding agreement
Furthermore, even if an applicant (offeror) is advised that their project has been approved and the applicant (offeror) starts incurring costs, no costs are eligible for reimbursement unless a funding agreement is ultimately signed between the applicant (offeror) and Canada.
Progress reports
You report progress during the project so the program can review the R&D accomplished to date.

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 ISC Challenge Stream (Innovative Solutions...

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Application Playbook

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

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Application Steps

1 Subscribe and Monitor Challenges Subscribe to the ISC newsletter and monitor ised-isde.canada.ca/site/innovative-solutions-canada/en/challenges for new challenge postings. Each challenge has its own deadline and requirements.

Required Documents 14

✓ Completed Challenge Stream Submission Form via ISC online portal
✓ Proof of Canadian incorporation (federal or provincial)

Eligible Expenses 6

Ineligible Expenses 6

Intake Periods

Deadline Notes

Ineligible Organizations

Premium The full guide for this program also covers:
  • 6 more application steps
  • 12 more required documents
  • 6 eligible expenses
  • 6 ineligible expenses
  • Intake periods
  • Deadline notes
  • Ineligible organizations

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 Regional Development Agencies (FedDev, PrairiesCan, PacifiCan, ACOA)
Combined Funding Potential See your total funding potential

Clawback Risk

Low Risk

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How ISC Challenge Stream (Innovative Solutions... Compares

Side-by-side with similar programs

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Program Amount Difficulty Payment Deadline
ISC Challenge Stream (Innovative Solu... up to $150,000 Hard Milestone-Based Challenge-specific —...
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...
Strategic Response Fund (formerly Str... Minimum $10 million contribution Hard Mixed (Advance + Reimb.) Ongoing — continuous...
CanExport SMEs Up to $50,000 Moderate Mixed (Advance + Reimb.) Between intakes — the...

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Frequently Asked Questions

Quick answers to the questions founders most often ask about ISC Challenge Stream (Innovative Solutions...

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How is this different from the ISC umbrella program already in the catalog?
This entry specifically covers the Challenge Stream mechanics — the two-phase structure, TRL 1–4 entry, and government-challenge-response format. The umbrella ISC entry covers the broader program context.
Can not-for-profits apply?
No — Challenge Stream is for-profit Canadian-incorporated SMEs only (under 500 FTEs). Not-for-profits, cooperatives, and academic institutions are ineligible.
Do I need matching funds?
No — ISC Challenge Stream is 100% funded by the federal government. However, subcontracting is capped at 1/3 of Phase 1 R&D budget (you must perform 2/3 of work internally).
Can I stack with SR&ED?
Yes, but you must deduct ISC funding from your SR&ED expenditure pool for the same costs. SR&ED covers qualifying R&D costs not funded by ISC.

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