IRAP funding: how Canada’s NRC IRAP supports innovative SMEs

By GrantHub Research Team · · Lire en français

IRAP funding: how Canada’s NRC IRAP supports innovative SMEs

If your business is developing new technology, IRAP funding is one of the most important federal supports to know. Delivered by the National Research Council of Canada (NRC), the Industrial Research Assistance Program (IRAP) helps small and medium-sized businesses pay for R&D, hire technical talent, and move innovations closer to market. In 2025–2026, NRC IRAP remains one of the largest and most active innovation funding programs in Canada.

Unlike tax credits, IRAP funding is delivered as upfront, non-repayable contributions tied to specific innovation projects. It also comes with hands-on advisory support from NRC Industrial Technology Advisors (ITAs).


What IRAP funding actually covers

IRAP funding is not a single grant. It is a suite of programs designed to support different stages of innovation. The two most common types of support Canadian SMEs use are project funding and talent funding.

1. NRC IRAP project funding (core IRAP funding)

This is what most people mean when they search for IRAP funding.

What it supports

  • Technical R&D and product development
  • Prototyping and testing
  • Engineering and applied research
  • Advancing technology readiness toward commercialization

Funding amount

  • NRC IRAP typically covers up to 80% of eligible internal labour costs
  • And up to 50% of eligible subcontractor costs
  • Total contributions often range from $50,000 to several hundred thousand dollars per project, depending on scope and risk

Who is eligible

  • Canadian small or medium-sized businesses with 500 or fewer employees
  • Incorporated, for-profit companies
  • Projects must involve technological innovation, not routine upgrades
  • A clear technical and commercial risk must exist

Projects are assessed on innovation, technical feasibility, and economic benefit to Canada. An NRC Industrial Technology Advisor works directly with you before and during funding.

2. IRAP Youth Employment Program (talent funding)

IRAP also helps businesses hire early-career talent to support innovation.

What it supports

  • Hiring recent graduates or young professionals
  • Roles in R&D, engineering, data, software, and technical marketing
  • Strengthening long-term innovation capacity

Funding amount

  • Covers a portion of the employee’s salary for up to 12 months
  • Contribution levels vary by region and role, but can reach up to $30,000–$40,000 per hire in many cases

Who is eligible

  • Canadian SMEs with 500 or fewer employees
  • Incorporated and for-profit
  • Willing to work with NRC IRAP and provide meaningful innovation work

Many companies combine youth employment support with core IRAP project funding.


How the IRAP funding process works

IRAP does not have a traditional “open intake” or online application form.

Here is what the process typically looks like:

  • Initial discussion with an NRC IRAP Industrial Technology Advisor
  • Project scoping, including technical milestones and budget
  • Formal proposal developed with advisor guidance
  • Contribution agreement signed before costs are incurred
  • Claims and reporting submitted during the project

Timelines vary, but many businesses wait 8–12 weeks from first contact to approval, depending on project readiness and funding availability.

Tools like GrantHub’s eligibility matcher can help you filter programs by province and industry in seconds, including whether IRAP or complementary innovation funding fits your profile.


How IRAP funding fits into a broader innovation strategy

IRAP funding often works best when combined with other supports, such as:

  • SR&ED tax credits for eligible R&D labour and overhead
  • Provincial innovation grants and scale-up programs
  • Export and commercialization support once products are market-ready

If you are exploring alternatives or follow-on funding, see our guides on apply for grants in Canada, government of Canada money, and venture capital in Canada.


Common mistakes to avoid with IRAP funding

  • Treating IRAP like a grant application only
    IRAP is relationship-driven. Engaging early with an ITA is critical.

  • Pitching a business expansion instead of innovation
    IRAP does not fund routine scaling, marketing, or equipment purchases.

  • Starting the project before approval
    Costs incurred before a contribution agreement is signed are not eligible.

  • Underestimating reporting requirements
    Claims must align with approved milestones and eligible cost categories.


Frequently Asked Questions

Q: Is IRAP funding repayable?
No. Core NRC IRAP project funding is non-repayable when project terms are met.

Q: How much IRAP funding can my business receive?
There is no fixed maximum. Many SMEs receive between $50,000 and $500,000 per project, depending on complexity and impact.

Q: Can startups get IRAP funding?
Yes, as long as the startup is incorporated, for-profit, and developing innovative technology with technical risk.

Q: Does IRAP fund software and digital products?
Yes. Software, AI, and data-driven projects are eligible if they involve technical innovation and R&D uncertainty.

Q: Can IRAP be combined with other grants?
Yes. IRAP is often stacked with provincial funding or SR&ED, as long as costs are not double-counted.

GrantHub tracks 2,500+ active grant programs across Canada — check which ones match your business profile.


Next steps

If your business is working on a new or improved technology, IRAP funding should be one of the first programs you explore. Understanding eligibility, timing, and how IRAP fits with other innovation funding can save months of trial and error. GrantHub helps Canadian businesses identify IRAP and complementary programs that align with their industry, stage, and province — all in one place.

Was this guide helpful?

Rate it so we can improve our content.

Canada Proactive Disclosure Data

400,000+ Companies Like Yours Have Received Billions in Grants

The Canadian government has funded over 400,000 businesses through 1.27 million grants and contributions. Check your eligibility in 60 seconds.