AI Grants and Funding in Canada: IRAP, SR&ED, LIFT and ESSOR
In 2026, the main programs to check for an AI project in Canada are NRC IRAP, SR&ED credits, BDC LIFT loans and, in Québec, ESSOR. Remolda checks which ones fit and prepares plan, budget and technical records behind the application.
In short
- Four programs to check in 2026: NRC IRAP (advice and, in some cases, funding for SMEs building technology), SR&ED (35% enhanced credit on up to $6M of qualified expenditures for most Canadian-controlled private corporations, 15% basic rate otherwise), BDC LIFT (loans from $25,000 to $5M) and Québec's ESSOR (non-repayable, up to 50%, capped at $20,000 for a digital diagnostic and plan).
- The Regional Artificial Intelligence Initiative is set to receive $500M under the AI for All strategy; FedDev Ontario says it is not accepting applications and will announce the next intake. CDAP is closed to new applications.
- Each program funds something different. IRAP and SR&ED reward technical risk and experimentation; LIFT and ESSOR fund adoption plans and implementation.
- Remolda prepares what the applications rest on: a ranked use-case plan with ROI ranges and a pilot budget (AI Opportunity Audit, $2,900 CAD + HST) and, during a build, dated technical records.
- The decision belongs to the funder. We make the file complete and consistent, and we tell you early when a program is a poor fit.
Your situation
Funding questions usually come up at one of four moments:
- Leadership asks whether a grant can pay for part of the AI budget. You need a short list of programs that fit, with the conditions attached.
- A lender or funder asks for a plan. BDC, IRAP advisors and Investissement Québec all want scope, budget and expected results in writing.
- You are building AI into your own product. Technical risk and experiments may qualify for IRAP support or SR&ED credits, if they are documented as they happen.
- A Québec company wants a digital diagnostic first. ESSOR covers part of the diagnostic and plan, and a 1B plan is required for the implementation stream.
Which programs fund AI projects in 2026
| Program | What it funds | Form | Who it fits | Status, September 2026 |
|---|---|---|---|---|
| NRC IRAP, incl. AI Assist | Developing technology, including generative AI and deep learning in your own products | Advice and, in some cases, a contribution | Incorporated, for-profit SMEs in Canada, up to 500 FTE | Open; starts with a call to NRC, then an advisor |
| SR&ED | Experimental development that resolves technological uncertainty | Tax credit: 35% enhanced rate on up to $6M, 15% basic | 35% rate: most CCPCs and eligible public corporations | Open; claimed with the tax return |
| BDC LIFT | AI, digital and cybersecurity adoption planned with BDC | Loans from $25,000 to $5M, preferential rates | Canadian businesses with $1M+ revenue | Open since April 24, 2026 |
| ESSOR, Volet 1 (Québec) | Digital diagnostic and plan (1B), implementation of that plan (1C), feasibility studies (1A) | Non-repayable, up to 50%; caps $20,000 (1B), $50,000 (1C), $50,000 per project (1A) | Businesses registered in Québec; 1B and 1C: 250 employees or fewer, revenue $2.5M+ | Open until March 31, 2027 |
| Regional AI Initiative (RAII) | AI commercialization and adoption beyond buying off-the-shelf tools | FedDev 2024 intake: normally repayable for SMEs | FedDev 2024 intake: businesses and not-for-profits in southern Ontario | $500M announced under AI for All; FedDev Ontario: next intake to be announced |
| CDAP | Digital adoption grants and loans | — | — | Closed to new applications |
Each program has more conditions than fit in a table. The Sources block below links the official pages we checked.
What in an AI project can be funded
Planning and diagnostics. ESSOR 1B names "l'intégration de l'intelligence artificielle" inside the digital diagnostic and plan and covers external consultants' fees. Investissement Québec reviews the consultant's service offer, written in French, and asks for a list of similar past mandates unless the auditor belongs to the Consortium des auditeurs numériques du Québec. LIFT's AI path starts with a plan built by BDC Advisory Services.
Implementation. LIFT financing covers implementing the plan's recommendations, including integration costs tied to the technology. ESSOR 1C covers implementing a 1B plan made within the last 24 months; a 1B plan is required for 1C.
Technical development. When your team builds a new AI capability into a product, IRAP and SR&ED look at the technical risk: what was unknown, which hypotheses were tested, what failed and what worked.
Staff training. In Ontario, the Ontario Job Grant covers training by eligible providers such as colleges and industry associations.
Buying licences for an existing tool is the weakest case for any of these programs. It fits best as one line of a funded adoption plan.
How Remolda helps
A funding check on the first call. In 30 minutes we look at your size, province, revenue band and project, and name the programs worth a closer look, along with the ones to skip.
The plan and the numbers. The AI Opportunity Audit produces what applications and lenders ask for: a ranked list of use cases with ROI ranges, a data and systems check, a 12-month roadmap and a budget for the first pilot. The same material feeds the AI business case your board signs.
Input for the funder's own plan. LIFT requires a plan built by BDC Advisory Services, and ESSOR 1B is carried out by a consultant Investissement Québec accepts. We give that advisor or auditor a clear picture of processes, data and priority use cases, so their plan starts from facts. Confirm the 1B provider with Investissement Québec before signing anything.
Dated technical records during the build. On a custom AI build or a Pilot Sprint, we log hypotheses, tests, results and time as the work happens. Your accountant or SR&ED preparer builds the claim from them.
A Canadian supplier. Contracts and invoices come from Innova Consulting Group Inc., Ottawa. LIFT offers its preferential rates when the technology is provided or integrated by Canadian suppliers, under conditions BDC sets and checks.
Timing and order of steps
ESSOR expenses count only from the date of the automated acknowledgment of your application. Spending before you file, including contracts already signed, is not eligible. Investissement Québec's own estimates are about six weeks for the conformity check, 15 days to assign an advisor and 20 days to a decision.
For IRAP and LIFT, the first conversation with the advisor sets the pace. The Opportunity Audit that produces our part of the plan takes two weeks; the funder's calendar sets the rest.
What it costs
The funding check is part of the 30-minute discovery call. The AI Opportunity Audit is $2,900 CAD + HST and takes two weeks. Help with application sections and SR&ED records during a build is quoted on the call, based on the program and the size of the project.
| Step | Price (CAD + HST) | Time |
|---|---|---|
| AI Readiness Review | $490 | 1 week |
| AI Opportunity Audit: use cases, ROI ranges, pilot budget | $2,900 | 2 weeks |
| AI Pilot Sprint with dated technical records | $9,800 | 6 weeks |
All packages are on the pricing page.
Why Remolda for AI funding work
- Programs checked against the source. Status, amounts and conditions on this page come from the official pages listed below, checked in September 2026.
- Plans built from your work. Interviews, processes and data, so the numbers in the application can be checked line by line.
- Published prices. You know the cost of the plan before the first call.
- English and French. Documents for federal funders and for Investissement Québec in the language they expect.
- A straight answer on fit. When a program does not match, we say so and suggest the next option.
How the work runs
- Call. 30 minutes: project, province, size, programs worth checking.
- Plan. AI Readiness Review or Opportunity Audit, depending on what the funder needs.
- Application support. Sections on scope, risks, budget and milestones; your company submits.
- Build. Pilot Sprint or custom build with records kept for SR&ED and reporting.
- Report. Results against the plan, ready for the funder's follow-up questions.
Frequently asked questions
Are there government grants for AI projects in Canada in 2026?
Yes, with conditions. NRC IRAP offers advice and in some cases funding to incorporated SMEs of up to 500 employees that develop technology; SR&ED gives tax credits for qualifying experimental development; BDC's LIFT program lends $25,000 to $5 million for AI adoption; Québec's ESSOR covers up to 50% of a digital diagnostic and plan (max $20,000).
Can buying ChatGPT Enterprise or Microsoft Copilot licences be funded?
Rarely on its own. IRAP does not fund day-to-day operating costs or purely commercial activities, and FedDev Ontario's AI adoption pillar asks for projects that go beyond purchasing off-the-shelf AI tools. Licences usually appear as one line of a larger funded plan, such as a BDC LIFT project.
Does AI development qualify for SR&ED?
Only the part that resolves technological uncertainty. CRA guidance says acquiring available knowledge, for example by hiring consultants, does not meet the requirement, and a workaround using available knowledge makes the work ineligible. Routine integration of an existing AI service usually falls outside SR&ED; building and testing a new approach when the result is uncertain may fall inside it. The CRA decides each claim.
What is BDC LIFT and who qualifies?
LIFT is a BDC program launched on April 24, 2026 with $500 million earmarked to help SMEs adopt AI. The AI path is for Canadian businesses with at least $1 million in annual revenue, requires a plan built by BDC Advisory Services, and offers preferential rates when the technology is provided or integrated by Canadian suppliers.
Is CDAP still open?
CDAP is closed to new applications. BDC states that the Canada Digital Adoption Program stopped accepting new applications for its Boost Your Business Technology stream on February 19, 2024. For 2026 projects, the programs to check are IRAP, SR&ED, LIFT and, in Québec, ESSOR.
Do you write and submit the application for us?
The application is submitted and signed by your company. We prepare the parts that come from the project work: scope, use cases, technical risks, budget, milestones and ROI assumptions, and we review the draft for consistency. SR&ED claims are filed by your accountant or SR&ED preparer from the records we keep.
Can you guarantee the funding?
Funding decisions rest with the funder, which assesses eligibility, budget and its own priorities, and intakes open and close. What we control is the quality of the plan and records, and an honest early view on whether a program fits your project.
Can AI training for staff be funded in Ontario?
The Ontario Job Grant covers up to $10,000 per trainee. Employers under 100 employees pay at least one-sixth of the cost and larger employers pay half; for previously unemployed new hires the limit is $15,000. It requires an eligible third-party provider with at least two years of delivering that training, such as a college, career college or industry association. Remolda does not qualify as such a provider, so our training is invoiced directly.
Sources
- National Research Council Canada — NRC IRAP financial support for technology innovation
- National Research Council Canada — NRC IRAP support for SMEs innovating with artificial intelligence (AI Assist)
- Canada Revenue Agency — SR&ED investment tax credit
- Canada Revenue Agency — Guidelines on the eligibility of work for SR&ED tax incentives
- BDC — LIFT: Lead with Innovation and Focus on Technology
- BDC — BDC launches LIFT (news release, April 24, 2026)
- ISED — Canada’s National Artificial Intelligence Strategy: AI for All
- FedDev Ontario — Regional Artificial Intelligence Initiative in southern Ontario
- Investissement Québec — ESSOR, Volet 1: études de faisabilité et diagnostic numérique
- BDC — Canada Digital Adoption Program (CDAP)
- Government of Ontario — Ontario Job Grant
Facts checked:
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