Can I use government grants for ChatGPT or AI software subscriptions?

It depends on the program. CDAP funding can cover SaaS subscriptions as part of a broader digital adoption plan. SR&ED generally does not cover off-the-shelf software subscriptions unless the software is used directly in experimental development. IRAP may cover software costs if they are part of an approved innovation project. Always confirm eligible expenses with your program advisor before committing.

Do I need to match the funding with my own money?

Most programs require some level of cost-sharing. IRAP typically covers 50-80% of eligible costs, meaning you fund the remainder. CDAP provides up to $15,000 in grants plus interest-free BDC loans. SR&ED is a tax credit on money you have already spent, so you fund the work upfront and claim the credit at tax time. Provincial programs vary, but expect to contribute at least 25-50% of total project costs.

How long does grant approval take?

Timelines vary significantly by program. IRAP applications can be reviewed in 4-8 weeks if your NRC advisor has capacity. CDAP approvals typically take 2-4 weeks. SR&ED claims are filed with your annual tax return and processed in 6-12 months, though the refundable portion for CCPCs often arrives within 2-3 months. Strategic Innovation Fund projects can take 6-18 months due to the scale and due diligence involved.

Can I stack multiple grants for the same AI project?

Yes, stacking is common and encouraged, but total government funding usually cannot exceed 75% of eligible project costs. For example, you might combine IRAP funding for the R&D phase with CDAP for the adoption phase, then claim SR&ED tax credits on qualifying experimental work. Each program has its own stacking rules, so disclose all other funding sources in every application to stay compliant.

Does hiring an AI consultant qualify for grant funding?

Yes, consultant fees are eligible expenses under most programs. IRAP covers contractor and consultant costs for approved innovation projects. CDAP includes advisory fees as part of the digital adoption plan. SR&ED allows subcontractor costs, though at a reduced rate (typically 80% of the amount paid). Having an experienced AI consultant can also strengthen your applications by providing credible project plans and technical documentation.

Canadian AI Grants & Funding Guide 2026

Canadian federal and provincial governments offer significant funding to help businesses adopt artificial intelligence. From tax credits that reimburse R&D spending to direct grants that subsidize digital transformation, there are billions of dollars available for companies willing to invest in AI. This guide covers every major program, what you can claim, and how to apply successfully.

Quick Summary

SR&ED: Up to 64% refundable tax credit on AI R&D (CCPCs)
IRAP: Up to $10M in non-repayable contributions for SME innovation
CDAP: $15,000 grant + $100,000 interest-free loan for digital adoption
Strategic Innovation Fund: $50M+ for large-scale AI projects
Provincial programs: Additional 10-30% in credits and grants by region

Federal AI Funding Programs

Canada offers SR&ED tax credits, IRAP contributions, CDAP grants, and the Strategic Innovation Fund for businesses adopting AI.

The Government of Canada runs several programs that directly or indirectly fund AI adoption. These programs are available to businesses across all provinces and territories, regardless of industry.

SR&ED (Scientific Research & Experimental Development)

The SR&ED program is Canada’s largest single source of federal support for business R&D. It provides tax credits for work that advances scientific knowledge or achieves technological advancement through systematic investigation or experimentation.

SR&ED for AI Projects

Credit rate: 35% refundable for CCPCs (first $3M), 15% non-refundable for others
Combined federal + provincial: Up to 64% in some provinces
Eligible work: Developing novel AI models, training custom machine learning systems, creating new algorithms, solving technical uncertainties with AI
Eligible costs: Salaries, materials, contractor fees (at 80%), overhead
Filing: Claimed annually with your corporate tax return

AI projects that qualify for SR&ED typically involve building something that did not exist before or overcoming a technical challenge where the outcome was uncertain at the start. Fine-tuning a large language model for a domain-specific task, developing a custom computer vision pipeline, or creating a novel data processing architecture can all qualify if properly documented.

Key Requirement

SR&ED requires demonstrating “technological uncertainty” — you must show that the outcome was not predictable using standard practice. Simply deploying off-the-shelf AI tools does not qualify. You need to document what you tried, what failed, and how you overcame the challenge.

IRAP (Industrial Research Assistance Program)

IRAP is the National Research Council’s flagship program for small and medium-sized enterprises. It provides non-repayable financial contributions and advisory services for innovation projects, making it one of the most valuable programs for AI adoption.

IRAP Details

Funding: Up to $10M for larger projects; typical SME projects $50K-$500K
Coverage: 50-80% of eligible costs depending on project phase
Eligible costs: Employee salaries, contractor fees, prototyping materials, IP costs
Eligibility: Canadian incorporated SME with fewer than 500 employees
Process: Work with an assigned NRC Industrial Technology Advisor (ITA)

IRAP is especially well-suited for AI projects because it funds both research and development phases. If you are building a custom AI solution — whether that is a predictive maintenance system, an intelligent document processor, or an AI-powered customer service platform — IRAP can cover a significant portion of your development costs. The program also provides access to technical advisors who can help refine your project plan.

Strategic Innovation Fund (SIF)

The Strategic Innovation Fund supports large-scale projects that promote innovation across all sectors of the economy. For AI, this includes major R&D initiatives, commercialization of AI technologies, and large-scale adoption projects.

SIF at a Glance

Funding: Typically $10M-$50M+ (repayable and non-repayable mix)
Best for: Companies with major AI R&D or commercialization projects
Sectors: All sectors, with priority for clean technology, life sciences, and advanced manufacturing
Timeline: 6-18 months for approval due to rigorous due diligence

ISED Pan-Canadian AI Strategy

The Pan-Canadian AI Strategy, managed by Innovation, Science and Economic Development Canada (ISED), has invested over $2 billion since its launch. In 2026, the strategy continues to fund AI research through national AI institutes (Mila, Amii, Vector Institute) and supports commercialization of Canadian AI innovation.

While much of this funding flows to academic institutions and research labs, businesses can access it through collaboration programs, sponsored research partnerships, and talent development initiatives. If your AI project involves working with university researchers or training highly qualified personnel, the Pan-Canadian AI Strategy ecosystem offers indirect but substantial support.

Canada Digital Adoption Program (CDAP)

CDAP is specifically designed for small and medium-sized businesses looking to adopt digital technologies, including AI. It provides both advisory support and direct financial assistance.

CDAP Benefits

Boost Your Business Technology Grant: Up to $15,000 for developing a digital adoption plan
BDC interest-free loan: Up to $100,000 to implement the plan
Wage subsidy: Covers hiring young digital talent to help with implementation
Eligible expenses: Software subscriptions, consulting fees, implementation costs, training
Eligibility: Canadian-owned, 1-499 employees, $500K+ annual revenue

CDAP is one of the most accessible programs for businesses just starting their AI journey. The digital adoption plan can include AI strategy development, and the BDC loan can fund implementation — covering everything from custom GPT development to workflow automation platforms.

Provincial AI Funding Programs

Every province offers additional AI incentives, from Ontario innovation credits to Quebec’s 30% R&D tax credit, stackable with federal programs.

Every province offers additional programs that can be combined with federal funding. Here are the key programs organized by region.

Ontario

Ontario is home to the Vector Institute and a thriving AI ecosystem centred in the Toronto-Waterloo corridor. The province offers several programs relevant to AI adoption.

▶Ontario Research and Innovation Optical Network (ORIN): Supports research infrastructure for AI and data-intensive projects, particularly for academic-industry partnerships
▶Ontario Centres of Excellence (OCE): Now part of Ontario Centre of Innovation, provides matching grants for industry-academic AI collaborations, typically $50K-$500K per project
▶Ontario Innovation Tax Credit: 8% non-refundable tax credit on qualifying R&D expenditures, stackable with federal SR&ED
▶Ontario Business Research Institute Tax Credit: 20% refundable tax credit for R&D conducted with eligible research institutes

Quebec

Quebec has some of the most generous AI incentives in Canada, driven in part by the Mila research institute and Montreal’s position as a global AI hub.

▶CQDM (Quebec Consortium for Drug Discovery): Funds AI applications in life sciences with industry partnerships up to $2M
▶Prompt: Quebec’s IT sectoral cluster that co-funds AI innovation projects in digital sectors, typically $100K-$500K
▶Quebec R&D Tax Credits: Up to 30% refundable provincial tax credit on R&D wages, stackable with SR&ED for a combined rate exceeding 60%
▶Investissement Quebec: Offers loans, loan guarantees, and equity investments for AI companies scaling operations in the province

British Columbia

▶Innovate BC: Provides programs like the Ignite program (up to $300K for tech scale-ups) and the New Ventures BC Competition for AI startups
▶BC Innovation Council (BCIC): Funds technology development through mentorship programs and venture acceleration, with AI as a priority sector
▶BC SR&ED Tax Credit: Additional 10% refundable provincial credit stackable with the federal program

Alberta

▶Alberta Innovates: Offers voucher programs ($25K-$100K) for AI adoption, accelerator programs, and applied research funding through partnerships with Amii (Alberta Machine Intelligence Institute)
▶Alberta Innovation Employment Grant: 8% refundable tax credit on qualifying R&D expenditures
▶Edmonton’s AI Ecosystem: Companies in the Edmonton region can access Amii’s industry partnerships for discounted advisory services and talent connections

Atlantic Provinces

▶ACOA (Atlantic Canada Opportunities Agency): Provides non-repayable contributions up to $500K for innovation projects, including AI adoption, through the Business Development Program and the Regional Economic Growth Through Innovation (REGI) program
▶Nova Scotia Innovation Rebate Program: Offers rebates on R&D investments including AI development
▶New Brunswick Innovation Foundation: Grants and loans for tech innovation, including AI-powered product development

How to Apply for AI Grants in Canada

Confirm eligibility, define your AI project with clear outcomes, gather documentation, submit, then track milestones and report.

Each program has its own application process, but the general approach is similar across most federal and provincial grants.

Confirm Eligibility

Verify that your company meets the program’s size, revenue, and incorporation requirements. Most programs require Canadian incorporation and a minimum operating history.

Define Your AI Project

Write a clear project description that outlines the business problem, proposed AI solution, expected outcomes, timeline, and budget. The more specific you are, the stronger your application.

Gather Documentation

Prepare financial statements, corporate tax returns, incorporation documents, and a detailed project budget. For SR&ED, you will also need technical documentation of your experimental work.

Submit and Follow Up

Submit through the program’s portal or contact your regional advisor (for IRAP, this is your NRC ITA). Respond promptly to any requests for additional information. Programs with rolling intake can be submitted anytime; others have fixed deadlines.

Execute and Report

Once approved, follow the funding agreement terms precisely. Track all eligible expenses, maintain records, and submit progress and final reports as required. Non-compliance can result in clawbacks.

How Much Can You Get?

AI funding ranges from $15K CDAP grants for SMEs to $50M+ Strategic Innovation Fund awards for large-scale R&D projects.

Funding amounts vary widely depending on the program, your company size, and the scope of your AI project. Here are typical ranges.

Program	Typical Range	Type
SR&ED	$25K – $3M+ annually	Tax credit (refundable for CCPCs)
IRAP	$50K – $10M	Non-repayable contribution
CDAP	$15K grant + $100K loan	Grant + interest-free loan
Strategic Innovation Fund	$10M – $50M+	Repayable/non-repayable mix
Alberta Innovates	$25K – $100K	Voucher/grant
ACOA	Up to $500K	Non-repayable contribution
Provincial R&D Credits	8 – 30% additional	Tax credit (varies by province)

What AI Activities Qualify for Funding?

Eligible activities include AI implementation, custom model development, workforce training, and infrastructure like GPU compute and cloud hosting.

Not every AI-related expense qualifies for every program. Here is a breakdown of what typically qualifies.

AI Implementation

Deploying AI chatbots and virtual assistants
Integrating AI into existing business workflows
Implementing AI-powered analytics dashboards
Setting up AI-driven document processing
Best programs: CDAP, IRAP, provincial grants

AI Research & Development

Building custom machine learning models
Developing proprietary AI algorithms
Creating novel data processing pipelines
Fine-tuning LLMs for domain-specific tasks
Best programs: SR&ED, IRAP, SIF

AI Training & Workforce

Employee AI training programs
Hiring AI specialists and data scientists
Upskilling existing team on AI tools
Developing internal AI competency
Best programs: CDAP wage subsidy, IRAP

AI Infrastructure

Cloud computing for AI workloads
GPU hardware for model training
Data storage and processing infrastructure
API integrations and middleware
Best programs: SIF, IRAP, provincial vouchers

Tips for Successful Grant Applications

Lead with a quantified business case, document everything from day one, engage program advisors early, and stack programs strategically.

Competition for AI funding is increasing every year. These strategies improve your chances of approval.

Start with a clear business case

Reviewers want to see that your AI project solves a real business problem. Quantify the expected impact: cost savings, revenue growth, efficiency gains, or competitive advantage. Vague proposals about “exploring AI” rarely get funded.

Document everything from day one

For SR&ED in particular, contemporaneous documentation is critical. Keep a project journal, save commit histories, record meeting notes, and document technical challenges as they happen. Retroactive documentation is the most common reason for claim reductions.

Engage early with program advisors

For IRAP, request an NRC Industrial Technology Advisor before your project begins. For CDAP, work with an approved digital advisor. These advisors can shape your application to align with program priorities and catch issues before submission.

Build a realistic timeline and budget

Overly ambitious timelines and underestimated budgets are red flags. Break your project into phases with clear milestones. Include contingency in your budget. Show that you understand the complexity of AI implementation.

Stack programs strategically

Combine programs to maximize your funding. For example, use CDAP for the advisory and planning phase, IRAP for the development phase, and SR&ED for the experimental R&D component. Just disclose all funding sources in each application.

Use qualified consultants

A good SR&ED consultant can significantly increase your claim value and approval rate. For other programs, an AI consultant with grant experience can write stronger technical narratives and project plans. The consultant fees themselves are often eligible expenses.

How ChatGPT.ca Helps with Grant-Funded AI Projects

We scope projects to maximize funding eligibility, maintain SR&ED-ready documentation, and structure deliverables for grant reporting.

As a Canadian AI consulting firm, we regularly work with clients who fund their projects through government grants. Here is how we support the process.

✓Project scoping: We help define your AI project in a way that aligns with program eligibility requirements, maximizing your funding potential
✓Technical documentation: Our project documentation meets SR&ED standards, so you can claim eligible work without scrambling at tax time
✓Implementation: From AI chatbot development to workflow automation, our consulting fees are eligible expenses under most programs
✓CDAP digital adoption plans: We work with approved digital advisors to create adoption plans that include practical AI implementation
✓Milestone tracking: We structure projects with clear milestones and deliverables that align with grant reporting requirements

Real Example

A Toronto-based professional services firm used CDAP funding to engage ChatGPT.ca for a custom GPT development project. The $15,000 CDAP grant covered the digital adoption plan, and the $100,000 BDC loan funded the implementation — resulting in an AI-powered client intake system that reduced processing time by 65%.