IRAP, SR&ED, Strategic Response Fund, NGen, and provincial programs — with verified eligibility, cost-share ratios, stacking strategies, and which programs are actually open.
Canadian manufacturers have access to over 20 federal and provincial funding programs, spanning non-repayable grants, refundable tax credits, and repayable contributions. The Industrial Research Assistance Program (IRAP) provides up to $10 million in non-repayable grants for SME innovation, covering 80% of technical salaries. The SR&ED tax credit returns up to 35% federally (65% combined with Quebec's CRIC) on eligible R&D expenditures — and Budget 2025 doubled the enhanced expenditure limit to $6 million. The Strategic Response Fund supports large-scale industrial transformation starting at $10 million. Provincial programs like Ontario's OMMITC (15% manufacturing investment credit) and Alberta's AMPG add further support. Most critically, these programs can be stacked — a well-structured claim recovers over 60% of eligible R&D costs.
Canadian manufacturing is a $931-billion sector supported by multiple federal and provincial funding programs. Here are the key numbers from 2024-25.
"NGen has demonstrated how collaborative innovation between industry, academia, and government can transform Canada's manufacturing sector and ensure our global competitiveness."
— Next Generation Manufacturing Canada, NGen Annual Report
Strategic Response Fund (SRF) launched September 2025, replacing the Strategic Innovation Fund. The $5 billion program expands support for industries affected by U.S. tariff disruptions, with particular focus on steel, aluminum, and automotive manufacturing.
SR&ED Budget 2025 expansion: The enhanced 35% rate expenditure limit doubled from $3M to $6M. Capital expenditures are eligible again (equipment used 90%+ for SR&ED). Public corporations can now access the enhanced rate. Phase-out thresholds raised to $800K taxable income and $15M–$75M taxable capital.
Ontario OMMITC enhanced to 15% (from 10%) in May 2025, with a new Expanded stream opening eligibility to non-CCPCs including publicly traded and foreign-owned corporations. Available through 2029.
Quebec CRIC replaces 8 previous credits with a unified 20–30% refundable tax credit for R&D, innovation, and pre-commercialization. The enhanced 30% rate applies to the first $1M in qualifying expenditures above an exclusion threshold.
Not all "grants" are created equal. Here is how the three main funding types work for manufacturers.
No repayment required. IRAP, CanExport, and most provincial programs provide grants that go directly to your bottom line.
SR&ED and provincial R&D credits are claimed on your tax return. Refundable credits pay out even if you owe no tax. Non-refundable credits offset tax payable.
SRF business streams require repayment, often interest-free with flexible schedules. Not free money, but significantly cheaper than market financing.
The core federal programs that fund Canadian manufacturing innovation, expansion, and R&D.
Canada's premier innovation funding program for SME manufacturers. IRAP provides both advisory services through an assigned Industrial Technology Advisor (ITA) and non-repayable financial assistance for R&D projects involving genuine technological uncertainty. Unlike SR&ED, IRAP also funds commercialization activities, market research, and business development related to innovation projects. Typical awards range from $50,000 to $500,000, though projects up to $10 million are possible. Applications are accepted on a rolling basis with budgets resetting April 1 each year — applying in April through June when budgets are fresh significantly improves your chances.
The SR&ED program is Canada's largest R&D incentive, providing over $4 billion in tax credits annually to 18,000+ claimants. For manufacturers, eligible work includes developing new manufacturing processes, designing products requiring novel materials, custom tooling that pushes beyond known capabilities, and environmental compliance innovations. Budget 2025 doubled the enhanced expenditure limit from $3M to $6M and re-included capital expenditures for the first time since 2014. The three-question test determines eligibility: Was there technological uncertainty? Was a systematic investigation undertaken? Was a technological advancement achieved or attempted?
What does NOT qualify: Routine quality control, standard maintenance, style changes, market research, commercial production using proven methods, and applying established industry best practices. The critical distinction for manufacturers: routine process optimization (adjusting known parameters) is not SR&ED, but investigating why a process fails when theory says it should work, or achieving performance beyond established limits, is potentially eligible.
Formerly the Strategic Innovation Fund (SIF), the SRF was launched in September 2025 as a $5 billion program to support large-scale, transformative manufacturing projects. The SRF specifically targets industries affected by trade disruptions, including steel, aluminum, automotive, forest products, and advanced technologies. Historically, SIF invested $8.2 billion across 108+ agreements, leveraging $72 billion in private investment — a 9:1 leverage ratio. Notable manufacturing investments include Algoma Steel ($703M), Stelco ($412M), Honda ($1.4B), and Stellantis ($5B).
Canada's Advanced Manufacturing Supercluster operates on a consortium-based model: to access funding, manufacturers must form a consortium with at least two un-associated industry partners, including at least one SME (under 500 employees). NGen has funded 173 projects totaling $607 million across AI, robotics, additive manufacturing, advanced sensing, and clean technology. Membership is free. Notable funded projects include Aspire Food Group ($16.8M NGen funding, $72.7M total) and ArcelorMittal Dofasco’s digital transformation ($12M). As of February 2026, supercluster projects ($500K–$20M) are on hold, but challenge programs run periodically.
Helps manufacturers pursue new export markets by covering up to 50% of eligible costs including trade shows, market research, marketing materials, product adaptation, and business travel to target markets. Particularly valuable for manufacturers looking to diversify beyond the U.S. market. Applications are accepted on a rolling basis, with typical approval within 6–8 weeks.
How to combine multiple programs on the same project for maximum recovery.
This is the most valuable combination for Canadian manufacturers. IRAP provides cash during the project (monthly reimbursements), while SR&ED provides tax credits after fiscal year-end. You must reduce your SR&ED eligible expenditures by the IRAP assistance received — no double-dipping on the same costs. However, every $1 of IRAP funding only reduces the SR&ED claim by approximately $0.42 for an Ontario CCPC, meaning you still come out significantly ahead.
Strategic allocation: Apply IRAP funding to broader activities (commercialization, market validation) that don’t qualify for SR&ED, preserving more of your R&D salary costs for SR&ED claims. IRAP covers 80% of salaries — the remaining 20% is fully eligible for SR&ED. Overhead costs calculated via the proxy method (55% of salaries) remain fully SR&ED eligible.
Add provincial credits on top: Ontario OITC (8%), Quebec CRIC (20–30%), Alberta IEG (8–20%), or BC SR&ED (10%) all stack with both IRAP and federal SR&ED. A well-structured claim for an Ontario CCPC can recover over 60% of eligible R&D costs through the combination.
Province-specific funding that layers on top of federal programs.
OMMITC (Manufacturing Investment Tax Credit): 15% credit on buildings, machinery, and equipment. Enhanced from 10% in May 2025. Up to $3M/year in credits. Now available to non-CCPCs via the Expanded stream. Active through 2029.
AMIC Stream: Grants up to $500,000 (15% of costs) and interest-free loans up to $5M for advanced manufacturing SMEs in aerospace, automotive, chemical, ICT, life sciences, and steel. Current intake: open through February 2026, next intake June–September 2026.
OITC: 8% refundable credit on SR&ED expenditures (up to $240K/year). Combined with federal 35%: 43% total.
CRIC (new R&D credit): 20–30% refundable. Replaces 8 previous credits. Enhanced 30% rate on first $1M above exclusion threshold, 20% base rate above. Fully refundable for all corporations. Combined with federal 35%: up to 65% — the highest in Canada.
ESSOR Program: Feasibility studies (up to $50K), digital diagnostics (up to $20K), and refundable interest-free loans covering up to 30% of eligible costs for investment projects. Quebec recently announced $1.6B in additional liquidity support.
SIPEM: Industry 4.0 and digital technology adoption for manufacturers. Up to $500K per project (50% of costs) for automation, robotics, production optimization.
Alberta Manufacturing Productivity Grant (AMPG): $30K matching (50/50 match) for technology upgrades and new machinery. Open until October 2026 or funds depleted. Requires 5–750 employees and physical Alberta location.
Innovation Employment Grant (IEG): 8% on base-level R&D spending, 20% on incremental spending above baseline. Up to $4M eligible annually. Combined with federal 35%: 43–55%.
APIP (Petrochemicals): 12% grant on eligible capital costs for petrochemical manufacturing. Minimum $50M project investment.
BC SR&ED: 10% refundable on first $3M of eligible expenditures (max $300K credit). Additional 10% non-refundable above. Combined with federal 35%: 45%.
BC Fast Pilot: Up to $200K per cleantech pilot project. Joint NRC IRAP and Innovate BC initiative. Watch for 2026 cohort announcements.
Ignite Program: Up to $300K (30% of costs) for industry-academia R&D partnerships with commercialization potential.
ACOA Business Development Program: Up to 50% of capital costs and 75% of operational costs as interest-free contributions for Atlantic Canadian manufacturers. Contact 1-888-576-4444.
Manitoba Manufacturing ITC: Up to 10% credit (7% refundable + 1% non-refundable + 2% on buildings) on manufacturing equipment and plant investment.
Saskatchewan M&P ITC: ~6% refundable credit on new manufacturing machinery, plus a manufacturing profits tax reduction of up to 2%.
Identify your primary funding need: R&D and innovation (IRAP, SR&ED), major facility expansion ($20M+ for SRF), equipment and machinery (provincial investment credits), export development (CanExport), or collaborative technology adoption (NGen). Most manufacturers qualify for multiple programs simultaneously.
Call NRC IRAP at 1-877-994-4727. Your ITA provides free business advisory services and helps identify all applicable programs — not just IRAP. Building this relationship early, even before you need funding, significantly improves outcomes. Initial enquiries receive a response within 5 business days.
Gather 2–3 years of financial statements, a detailed project budget with line items, a technical proposal describing uncertainties and methodology, a commercialization plan with market analysis, and proof of Canadian incorporation. For SR&ED, begin tracking technical activities and staff time allocation from day one.
Submit IRAP applications in April–June when budgets reset. Apply for IRAP first for upfront cash, then claim SR&ED on residual costs after year-end. Layer provincial credits (OITC, CRIC, IEG) on top. Total recovery can exceed 60% of eligible R&D costs through strategic stacking.
Side-by-side comparison of major manufacturing funding programs.
| Program | Max Amount | Type | Best For | Approval | Status |
|---|---|---|---|---|---|
| IRAP | $10M | Grant | SME R&D & innovation | 9–40 days | Open |
| SR&ED (CCPC) | $2.1M/year | Tax credit | R&D expenditures | ~60 days | Open |
| SRF | $10M+ contribution | Repayable | $20M+ projects | 6–12 months | Open |
| NGen | $500K–$20M | Reimbursement | AI, robotics, IoT | 3–6 months | On hold |
| CanExport SMEs | $99,999 | Grant | Export development | 6–8 weeks | Open |
| OMMITC (ON) | $3M/year | Tax credit (15%) | Equipment & buildings | Tax filing | Active to 2029 |
| AMIC (ON) | $500K grant | Grant + loan | Advanced mfg SMEs | Intake-based | Open |
| CRIC (QC) | 20–30% | Tax credit | R&D in Quebec | Tax filing | Active |
| IEG (AB) | 8–20% | Tax credit | R&D in Alberta | Tax filing | Active |
| AMPG (AB) | $30K | Grant (50% match) | Equipment upgrades | Rolling | Open to Oct 2026 |
Answers based on verified government program documentation.
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