After nearly 10 months of anticipation, the Canadian government last week has taken the first step toward launching a new innovation and investment agency that will reshape and simplify how federal R&D resources are distributed.
The newly announced Crown agency, the Canadian Innovation Corporation (CIC), will bring together existing programs—especially the Industrial Research Assistance Program (IRAP)—to create a single, large-scale platform for business R&D support under one government roof.
While this marks a major shift in how the Canadian government reviews and supports R&D initiatives, businesses already participating in IRAP, SR&ED, or other government incentive programs have no reason to worry. In fact, the CIC aims to provide innovative Canadian companies with even more resources to help speed up the commercialization of new products and services.
CIC: The essentials
At first glance, the Blueprint for the CIC is ambitious and far-reaching, with nearly $2.6 billion earmarked for R&D initiatives from 2023 to 2027. That’s more than double the amount first proposed in Canada’s Budget 2022. This new figure includes the current IRAP budget, which will be moving out from under the National Research Council (NRC) for the first time in the program’s 70-year history.
Beyond funding R&D projects, the CIC Blueprint draws inspiration from successful innovation programs in countries like Israel and Finland. It will offer participants access to evaluation and advisory services, as well as a network of innovators. Ultimately, the CIC’s goal is to become an “outcome-driven organization,” giving Canadian R&D a much-needed boost after two decades of lagging behind global peers.
What does the CIC mean for you?
The biggest change in the CIC Blueprint is the reorganization of IRAP and the transfer of its funding away from the NRC. The good news for founders: the Blueprint doesn’t propose any major changes to IRAP itself, aside from who manages it.
So, if you’re planning to use IRAP in 2023, you can continue as usual—this announcement won’t affect you right now. That’s because most of the CIC Blueprint still needs to be put into action.
Legislation is required to officially create the CIC and define its mandate. Leaders for the new organization (who will report to the minister of innovation, science, and industry) also need to be appointed.
On the funding side, the CIC Blueprint introduces a new program allowing Canadian companies to apply for between $50,000 and $5 million to cover part of their R&D or product development costs—over and above what IRAP already offers. The CIC will also have the flexibility to support select large-scale R&D projects, with support up to $1 million or a maximum contribution of $20 million.
Details about these programs could still change, since there’s little information available beyond the CIC’s implementation timeline. The government has committed to launching the CIC before the end of 2023, but they’ve set a 12- to 18-month window to move IRAP out from under the NRC—a process that depends on the legislation to establish the CIC in the first place.
The big question for founders: Will these changes affect companies looking to claim both SR&ED and IRAP?
In short: no.
Aside from new administrative oversight, companies using IRAP shouldn’t worry about losing funding. Combining IRAP funding with SR&ED tax credits will remain a key strategy for innovative businesses looking to boost their R&D.
At Boast, many of our clients use both IRAP and SR&ED to access government grants and tax credits. The main difference: IRAP is project-based and requires you to apply for funding before or at the start of your R&D. That means you’ll need to work with a government advisor (ITA) to present your project proposal for approval before receiving funding, which is distributed throughout the year.
SR&ED, on the other hand, lets eligible founders receive a cash refund or tax credit when they file their corporate taxes at the end of the fiscal year.
When companies combine IRAP and SR&ED in their strategy, they benefit from ongoing funding during the year and a tax credit at year-end. While there are limits to how much you can receive by stacking IRAP and SR&ED, using both together provides a net advantage.
Navigating these funding programs can be complex and time-consuming—especially for founders who’d rather focus on R&D itself. That’s why Boast AI offers a white-glove approach, partnering with innovative founders to help them secure every possible federal grant and credit they’re eligible for, without draining their resources.
To learn more about what the CIC Blueprint means for Canadian businesses—and how your team can start maximizing your returns—watch our #InnovationLive conversation with VP of Customer Delivery, Matt Funk.
