What expenses are eligible under Digital Supercluster programs?

If you are planning a project with Canada’s Digital Technology Supercluster (DIGITAL), it is important to know which costs you can claim. DIGITAL programs only fund direct, project-related expenses that help develop and commercialize new technology. They do not cover everything your business spends. This is especially true in the Horizon AI – Global Advantage Stream, where reviewers check every cost and will cut ineligible items from your budget.

This guide explains which expenses are eligible under Digital Supercluster programs, with examples for Horizon AI. All details are based on current program guidance from DIGITAL.

Eligible Expenses Under Digital Supercluster Programs

Digital Supercluster funding is given as a non-repayable contribution for approved project costs. Each program has its own rules, but the categories below are almost always eligible, including for Horizon AI – Global Advantage Stream.

Labour and Personnel Costs

Labour is usually the biggest eligible expense in DIGITAL projects.

You can claim:

Salaries and wages for employees working on the project
Legally required benefits (CPP, EI, vacation pay)
Contracted technical staff like developers, data scientists, and engineers
Research staff at universities or research centres

Key rules:

Only time spent directly on the project is eligible
You must track staff time with time sheets or similar records
Executive time is only eligible if it is hands-on project work, not general management

Professional and Technical Services

You can include costs for outside experts needed for your project.

Examples:

AI model development or validation by third parties
Cybersecurity or data governance consulting
Legal services for IP or data agreements
UX/UI design for commercial-ready products

Rules for these services:

They must be essential to your project
You must pay a fair market rate
You need invoices and contracts to support these claims

Equipment and Technology Costs

DIGITAL programs cover equipment that is needed for the project, not for general business use.

You can claim:

Cloud computing and data storage used for the project
Specialized AI hardware used in the project
Software licences for development or testing
Access fees for datasets used in AI training

Limits:

Only the portion used for the project is eligible
General IT upgrades or office equipment are not eligible

Ineligible Expenses to Watch For

DIGITAL is strict about what you cannot claim. These costs are often removed from budgets:

General overhead like rent, utilities, and insurance
Marketing and advertising not tied to a commercialization pilot
Sales commissions or business development costs
Entertainment, hospitality, or travel not directly tied to the project
Any costs from before project approval

Ongoing Operating Expenses

DIGITAL does not fund regular business costs. Rent, admin salaries, and general office expenses are usually not eligible.

Full Equipment Costs

Only claim the portion of equipment used for the project. If you claim 100% of a shared asset, your budget may be cut.

Common Mistakes and Tips

Weak Labour Tracking

If you cannot show how staff time links to project work, those costs may be denied. Use time sheets or similar tools to keep clear records.

Treating Horizon AI Like a Research Grant

Horizon AI wants commercial results and global impact, not just research. Make sure your project has a clear path to commercialization.

Overlooking Collaboration Rules

Horizon AI requires a collaborative consortium. Each partner must explain their costs and role in the project. Eligible collaboration costs include:

Work done by consortium partners
Infrastructure for sharing data between partners
Joint testing or integration
Knowledge transfer and commercialization planning

Want to see if your project fits? GrantHub lets you check Digital Supercluster eligibility and compare programs in minutes.

Frequently Asked Questions

Q: Are Digital Supercluster funds repayable?
No. Funding from DIGITAL programs, including Horizon AI, is a non-repayable contribution.

Q: Can SMEs apply on their own?
No. Horizon AI requires a consortium with SMEs, larger companies, or academic groups.

Q: Are capital purchases like servers eligible?
Sometimes. Only the part used for the project is eligible, and you must explain why it is needed.

Q: Are these funds taxable in Canada?
Usually, government contributions are taxable income. Check with your accountant.

Q: Is there a fixed maximum funding amount?
No. Horizon AI funding depends on your project’s size and scope.

Next Steps

Before you submit a Horizon AI proposal, check that every budget item matches a project activity and outcome. This helps you avoid cuts and speeds up approval. GrantHub can help you compare Digital Supercluster calls, confirm eligible expenses, and find other tech grants that fit your project.

What expenses are eligible under Digital Supercluster programs?