How to Stack Federal and Provincial Grants Legally in Canada

Many Canadian business owners think they can only get one grant per project. In fact, it’s often allowed to use both federal and provincial grants together—if you follow the rules. Knowing how grant stacking works can help you get more support for your project, as long as you respect the funding limits set by each program.

What Grant Stacking Means (and Why Governments Allow It)

Grant stacking is when you use more than one government funding program to help pay for the same project. This is legal in Canada if the programs themselves allow it and you don’t go over the total funding limit.

Most grant programs set a limit on Total Government Assistance (TGA). This is the highest percentage of your project costs that can come from government sources. TGA caps are usually between 50% and 75%, but the exact number depends on the program and your business.

Federal and provincial governments allow stacking for several reasons:

Different programs support different goals
Provinces want to bring in federal money to help local businesses
Small businesses often need more help to complete bigger projects

The key is knowing which programs can be combined and how to split your costs between them.

Understanding Total Government Assistance (TGA)

Each funding program uses Total Government Assistance to decide how much money you can get. TGA includes:

Federal grants and contributions
Provincial grants and subsidies
Sometimes, municipal funding
Wage subsidies for the same project

If your total government support goes over the TGA cap, your funding will be reduced or denied.

Example:
If your project costs $100,000 and the TGA cap is 75%, the most you can get from all government sources is $75,000. This rule applies even if you are approved by more than one program. For example, the Canada Job Grant (federal-provincial) often covers up to two-thirds of training costs, but you cannot combine it with other programs to exceed the set limit.

Common Federal Programs Used in Grant Stacking

Some federal programs are often used with provincial grants, as long as you follow the rules.

NRC IRAP (Industrial Research Assistance Program)

Jurisdiction: Federal
Who it’s for: Small and medium-sized businesses doing science or engineering-based R&D
Support type: Non-repayable contributions for eligible R&D labour and contractor costs
Stacking rules: IRAP funding must be reported and counts toward TGA

Many businesses combine IRAP funding with provincial innovation grants. You must tell your IRAP advisor about all other government funding, and the total cannot go over the program’s TGA limit.

SR&ED Tax Incentive Program

Jurisdiction: Federal
Support type: Tax credits for eligible R&D activities
When it applies: After project costs are incurred

You can use SR&ED together with grants, but any grant you receive for an SR&ED-eligible project will lower the amount you can claim under SR&ED. This is allowed, but it does lower your total benefit.

Why Provincial Grants Usually Stack First

Most provinces design their programs to work with federal funding.

Common provincial grants include:

Hiring and training grants
Productivity and technology adoption funding
Export and market expansion support

Provincial funders often ask:

Have you applied for federal funding?
Has any federal funding been approved already?

If you don’t report other funding, you may have to pay money back later.

How to Allocate Costs When Stacking Grants

You cannot claim the same cost twice with different grants.

For example:

If a federal grant covers 50% of eligible labour, and a provincial grant also covers labour, you can’t apply both to the same labour costs.

A better way:

Use the federal grant for R&D wages
Use the provincial grant for training, equipment, or commercialization

Careful cost planning keeps you within the rules and avoids mistakes.

Common Mistakes to Avoid

Not disclosing other funding
Every application asks if you have other government help. Missing this is seen as misrepresentation.
Assuming tax credits don’t count
Programs like SR&ED do count toward TGA calculations.
Applying in the wrong order
Some provincial programs want to see federal approval first.
Exceeding the TGA cap
If you get approved for too much, the extra funding will be reduced or taken back.

Frequently Asked Questions

Q: Can you stack federal and provincial grants for the same project?
Yes, as long as both programs allow it and you stay within the TGA limit set by the funders.

Q: Does SR&ED count as government funding when stacking grants?
Yes. SR&ED reduces your eligible R&D expenditures when you calculate your final claim.

Q: Can startups stack grants with no revenue?
Often yes. Many innovation and hiring grants focus on the project’s value, not your revenue history, but eligibility depends on the program.

Q: What happens if I exceed the funding limit?
Any extra funding above the cap is usually reduced or taken back. In serious cases, funders may review your eligibility.

Q: Do municipal grants count toward stacking limits?
Sometimes. Some programs include municipal funding in TGA calculations, so always check with the funder.

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Next Steps

Grant stacking can help you lower your project costs, but you need to plan ahead and follow each program’s rules. GrantHub tracks hundreds of active federal and provincial grant programs and can show which ones may be combined based on your business needs. Careful research and cost planning before you apply will help you avoid mistakes and get the most from your funding.

How to Stack Federal and Provincial Grants Legally in Canada