REGI AI Funding: Is Your SME Eligible for Federal AI Support?

REGI AI Funding: Is Your SME Eligible for Federal AI Support?

Many small and medium-sized businesses (SMEs) in Canada want to use artificial intelligence (AI), but the cost can be high. The Regional Economic Growth through Innovation (REGI) program is a federal initiative that helps lower these costs. REGI offers funding for businesses in Quebec regions to develop or adopt AI. If your business is exploring AI, REGI funding could cover up to half your project costs.

What Is the Regional Economic Growth through Innovation (REGI) Program?

REGI is a federal funding program run by Canada Economic Development for Quebec Regions (CED). It helps projects that build AI capacity in Quebec’s regional economies. The program is not just for big cities—REGI supports businesses in smaller communities across the province.

REGI focuses on two main areas:

• AI development and commercialization
  Helping startups and growing SMEs create AI products or services and bring them to market.

• AI adoption and integration
  Supporting SMEs as they add AI technologies to their business, including in traditional industries.

Both AI creators and users can apply, as long as their projects show clear business and economic benefits.

REGI AI Funding Eligibility for SMEs

To qualify for REGI AI funding, your business must meet several requirements set by CED.

Eligible organizations include:

• Small and medium-sized businesses (SMEs) that:
  • Develop or commercialize AI technologies or solutions, or
  • Are ready to adopt or use AI in their operations
• AI startups and scale-ups
• Indigenous-led businesses
• Non-profit organizations that help SMEs develop, commercialize, or adopt AI

Geographic requirement:

• Projects must take place in Quebec, especially in regions outside major cities.
• Your business should help the local economy, such as by creating jobs or increasing productivity.

Project readiness is important:

REGI does not fund early-stage ideas. Your SME should have:

• A clear AI project or use case
• A realistic budget and timeline
• The team or partners needed to complete the project

If you are comparing REGI with other programs, GrantHub’s eligibility matcher can help you filter grants by location and industry.

How Much Funding Can You Get Through REGI?

REGI provides different support depending on the organization.

For SMEs, funding is:

• Up to 50% of eligible project costs
• Repayable and interest-free

For non-profit organizations, funding can be:

• Up to 90% of eligible project costs
• Non-repayable

There is no set maximum amount. The funding you receive depends on:

• The size and impact of your project
• Total eligible costs
• How well your project fits with REGI’s goals

SMEs must repay the funding, but terms are usually flexible. Plan for repayment once your project starts to bring results.

What Types of AI Projects Are Funded?

REGI supports practical AI projects that help businesses grow. Eligible projects include:

• Creating AI-based products or platforms
• Bringing existing AI solutions to market
• Adding AI to business operations, such as:
  • Predictive analytics
  • Process automation
  • Quality control or maintenance systems
• Using AI in key or traditional industries like manufacturing and resource sectors

Expenses that often qualify include salaries, professional services, and project-related costs. For more details, see What expenses are eligible under regional economic development grants?.

Common Mistakes to Avoid

1. Applying with a vague AI idea
   REGI does not support projects without clear plans. Your application should describe a specific AI project with measurable results.

2. Forgetting the regional focus
   Projects based only in Montreal or those without regional benefits are less likely to succeed.

3. Not planning for repayment
   SME funding must be repaid. Make sure your cash flow can handle repayment after your project is finished.

4. Stacking funding the wrong way
   You can sometimes combine REGI with other programs, but there are limits. Learn more at How to stack grants and loans without violating funding rules.

Frequently Asked Questions

Q: Is REGI AI funding a grant or a loan?
For SMEs, REGI provides a repayable, interest-free contribution (like a loan without interest). For non-profits, the funding is non-repayable.

Q: Does my SME need to be an AI company to apply?
No. SMEs that adopt or use AI in their business can apply, even if AI is not their main focus.

Q: Can REGI funding be combined with other federal AI programs?
Yes, often. Government funding must stay within certain limits. Always check with CED before finalizing your budget.

Q: Is REGI funding taxable?
Funding may count as taxable income, depending on how you use it. Ask your accountant for advice that fits your business.

Q: Is REGI currently open?
Yes. REGI is open, but funding is limited and applications are reviewed as they come in.

GrantHub lists hundreds of active grant programs across Canada—see which ones your business can apply for.

Next Steps

If your SME wants to start an AI project in Quebec, REGI funding can help lower your costs and risks. Make sure you check your eligibility early and prepare a strong project plan with clear goals. GrantHub can help you compare REGI with other AI programs so you find the best funding options for your business.