Zero To One Strategic empowers Innovative Canadian companies with expert guidance on SR&ED tax credits, grants, and non-dilutive funding solutions. Our specialized approach maximizes funding outcomes, allowing clients to focus on growth innovation.
All BlogsA Quick Look at the Current Non-Dilutive Funding Landscape in Canada
We've received many questions from clients about the current funding landscape, particularly the limited availability of grants, subsidies, and other non-dilutive funding programs. As a Partner of NeuronicWorks, through this guest blog, we wanted to provide some insight on the current situation: i.e. why funding opportunities have been limited and what we can expect in the coming months.
The current funding landscape is one of the toughest we’ve seen in years. There are very few funding opportunities currently open, and those that are open, are very specific to the type of technology or company they are looking for.
The funding landscape is always very cyclical, with programs starting and ending, running out of funding until they are renewed, and changing in response to political agendas and mandates.
The current environment is particularly challenging for several reasons:
- Government Fiscal Year: the fiscal year-end for the government is March 31st and many programs exhaust their budgets by the end of the calendar year and are not refinanced until the new fiscal year on April 1st; many programs are in this holding pattern right now.
- Election Year: oftentimes the government in charge will roll out programs and set them to expire in the year there is likely to be an election. With elections in Canada set to take place this year, many programs are set to expire and have not yet been renewed.
- Prorogued Parliament and Impending Election: to make the last point even more challenging, with leadership transitions and broader governmental shifts, program renewals and modifications are on hold until the elections are over and there is more clarity on future priorities.
- Tariff Threat: recent trade policy developments with the USA and shifting economic conditions, have also created uncertainties and impacted programs. Canada’s focus on appropriate response strategies to the evolving trade policies could lead to the funding being redirected towards such initiatives rather than on new or renewed programs.
Current Programs
There are still a limited number of programs that are open or have rolling deadlines and still have funding, or will get re-funded with the new fiscal year. Some programs to consider and how to prepare for them are:
- IRAP - this program will be receiving additional funding with the new government fiscal year (April) and the ITAs will have renewed budgets to disperse funds. If this is a program on your radar and you are eligible for this (depends on region, but in general at least 3-5 full-time employees other than the founders, and $300k-500k in revenue), you should think about engaging with IRAP to get an ITA or with your existing ITA if you have one assigned. If you are a client of Zero to One Strategic we provide access to coaching calls in preparation for calls with an ITA in order to improve your chances of getting funding.
- Scale AI - this program has a rolling application deadline and is aimed at scaling AI-focused companies working in consortium with other Canadian companies. The current streams have very specific eligibility criteria for how much revenue the applicant companies have, the costs that each will contribute, and a clear project with a multi-million dollar budget.
- CanExport - this program has just opened again and is highly competitive, favouring companies that have clear existing market traction and existing opportunities in a new market outside of Canada.
- Economic Development Funding - the government-backed loan program should return this spring, after the upcoming elections. These programs are done in the form of zero-interest, repayable contributions from different funding agencies across the country (FedDev, ACOA, PrairiesCan, PacifiCan, FedNor, CanNor and CED in Quebec).
What you can do for your Business
With so much uncertainty at the moment, it is hard to accurately predict what will happen in the coming months. A few things that we will continue to monitor, and we encourage you to keep tabs on, are:
- programs may re-open with the new government fiscal year and new application cycles for programs that have already had funding committed.
- new governments -both federally and in Ontario- will likely announce new programs, make changes to current programs and/or renew programming once they are in office.
- the tariff threats and potential trade policy shifts may lead to other programming designed to help support Canadian businesses; encourage ‘buy in Canada’ for companies and government, and/or other supports to pursue new markets or diversify.
With so much of this out of your control as a business leader, there are still ways that you can help yourself and the innovation economy in general:
- get involved in the political scene, talk to your local lawmakers, send letters, and attend meetings when you can. Politicians will listen to company owners as constituents recognizing their role in job creation and their influence within the community.
- subscribe to the newsletters of organizations like CCI and others who are working on behalf of the innovation economy.
- Focus on your business fundamentals and the things you can control, including positioning yourself to optimize SR&ED, especially with incoming changes to the program. Reach out to our team to receive a copy of our “Guide to SR&ED Record Keeping”.
If you need our help making sure your operations are oriented to maximize your next SR&ED claim, please feel free to connect with us online or via email.