IRAP Funding (Canada): Everything You Need to Know

The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) is Canada’s top innovation support program for small and medium-sized businesses (SMBs).

NRC IRAP offers expert advice, valuable connections, and funding to help Canadian SMBs expand, boost their innovation capabilities, and bring new ideas to market.

The program is delivered through a dedicated network of Industrial Technology Advisors located in communities across Canada, supporting businesses in every industry sector.

What is IRAP?

Recognized as one of Canada’s most effective funding programs, IRAP provides non-repayable financial support covering 80% of salaries and 50% of contractor costs through the following subprograms. Total project costs and funding amounts are determined in collaboration with an NRC IRAP Industrial Technology Advisor (ITA).

1. Small Technology Innovation Projects, or the Accelerated Review Process (ARP)
Offers grants of up to $50,000 to help companies fund R&D or bring technology projects to market.

2. Mid-sized Technology Innovation Projects
Offers larger grants of up to $10 million, typically focused on R&D, developing new innovative products, creating original software, and more.

3. Youth Employment Strategy Programs
Provides grants of up to $30,000 per graduate aged 15–30 for a 12-month work placement. You can apply for up to two candidates, but they must not be employees at the time you submit your application.

Who is eligible?

To be eligible for IRAP funding, you must meet these basic criteria:

 

• Be a Canadian SME, incorporated and for-profit
• Have 500 or fewer full-time employees
• Aim to grow and generate profits by developing and commercializing innovative, technology-driven new or improved products, services, or processes in Canada.

 

How do you apply?

Start by contacting your local IRAP ITA at 1-877-994-4727 to discuss your project. The ITA will assess your eligibility and guide you through the funding proposal process.

Here are some questions you should be ready to answer before meeting with your ITA:

1. Technology/ Project Overview

• Provide a high-level summary of the technology or product you plan to develop.
• What problem does it solve, and why is it needed in the market?
• Identify potential challenges and how you plan to address them.

2. Management Team & Company Skillset

• Briefly describe your company today.
• Why is your team the right one to successfully complete this project and achieve commercial success?
• Does your team (or your partners, if any) have the expertise needed to develop and market the product?

3. Financial Capability

• You’ll need to show that you can cover the remaining 20% of salaries, 50% of subcontractor costs, and any other expenses not covered by IRAP (like 100% of capital expenditures).

4. Business and Market

• Quantify the business opportunity.
• Describe the market size and your strategies to capture your target share.
• Identify potential challenges and how you’ll address them.
• Discuss intellectual property considerations.

5. Economic Impact

• What economic impact will your project have, and how will it benefit Canada—such as new jobs created, revenue growth, and more?

6. High-level project plan and timeline

• Break down the project into phases if there’s more than one.
• Provide timelines and key milestones for each phase.
• Estimate costs for each milestone.

What is the deadline?

IRAP-funded projects must be completed within the fiscal year, from April 1 of the current year to March 31 of the following year.

Although IRAP’s financial support programs don’t have fixed deadlines, we recommend contacting your local ITA before April 1 to learn about the funding cycle and confirm your project’s eligibility for the next fiscal year.

How is IRAP different from SR&ED?

1. IRAP requires you to submit a funding proposal before starting your project, while SR&ED expenses are claimed after they’re incurred.
2. You file your SR&ED claim with your corporate taxes, but for IRAP, you must work with an ITA to submit your funding proposal.

Can you claim both IRAP and SR&ED at the same time?

IRAP does not cover overhead costs, but SR&ED does. SR&ED is claimed on eligible salaries plus a 55% overhead proxy, minus any government assistance.

Since IRAP covers 50% of contractor costs and 80% of salaries, your company is responsible for the remaining amounts.

Here’s an example of how you can combine IRAP and SR&ED funding:

Suppose your company is a Canadian Controlled Private Corporation (CCPC) approved for a $100,000 IRAP grant as part of a $500,000 R&D project. Since IRAP covers 80% of salaries, your share of the total R&D project—including the non-IRAP portion—would be $420,000.

If all $500,000 in expenses go toward salaries for employees working 100% on SR&ED-eligible activities, your company could recover ~$288,000 (depending on your province) in SR&ED tax credits. If you don’t owe taxes, you’ll receive an SR&ED refund check for ~$288,000 from the government.

By combining the $80,000 from IRAP and $288,000 from SR&ED, you would receive $368,000 in funding to support your R&D and help bring your innovation to market.

For more information, visit the NRC- IRAP website or call their toll-free number at 1-877-994-4727.