Qualify for IRAP Accelerated Review Process (ARP) Research Grants
Update: The National Research Council (NRC) now offers project-based funding through a single Industrial Research Assistance Program (IRAP). Please visit the NRC-IRAP Research Project Contributions page for more information.
Canadian small and mid-sized businesses (SMBs) are often confronted with difficult innovation challenges. Implementing research and development projects helps to increase product and process innovation, however engaging in these projects can often be lengthy, financially demanding, and requiring a diverse team of skilled employees. Since many small businesses often lack the resources or cash flow to pursue innovative projects, the National Research Council of Canada (NRC) offers a range of Canadian government grants for research to help small businesses complete critical research and development activities.
The Accelerated Review Process (ARP) stream of Industrial Research Assistance Program (IRAP) increases business innovation by providing up to 50-80% of eligible project expenses to a maximum $50,000 for projects that revolve around solving an internal technical challenge. IRAP’s ARP research grants cover a portion of labour, as well as third party contractor expenses. The applicant needs to apply and be accepted before commencing their project, which we recommend doing as part of a proactive funding strategy.
Business Eligibility for IRAP ARP Research Grants
IRAP ARP research grants can be accessed by business owners and executives across Canada. IRAP receives funding at the beginning of each government fiscal year (April 1st) and ARP projects can occur anytime within that fiscal year (April 1 to March 31). Businesses eligible for this Canadian government funding program must:
- Maintain 1-500 full-time employees;
- Be a for-profit entity;
- Be federally incorporated for at least two years; and
- Be dedicated to future research and development activities.
Projects Eligible to Receive IRAP ARP Research Funding
IRAP ARP projects will mainly focus on solving internal technical challenges, such as process or product/technology improvements. Companies completing research projects that lead to new products, enhanced productivity, or new competitive advantages will be given priority access to funds. Types of projects that qualify for this program include:
- Product prototyping, development, or enhancements;
- Business process mapping;
- Supply chain diversification;
- IP (internet protocol) assessments, planning, and strategy development;
- New technology/ market feasibility studies; and
- Advanced technology adoption and adaptation.
Please Note: IRAP ARP projects should start and finish within one government fiscal year, which runs from April 1 to March 31 of the following year. Projects larger than $90,000 or spanning longer than one year in duration should consider applying for IRAP Mid-Size Projects funding.
Eligible Expenses to Submit for IRAP Government Business Grants
The Accelerated Review Process (ARP) stream of IRAP is mainly focused on supporting two types of expenses with research grants:
- Internal Labour Expenses: up to 80% of technical employee salaries covered; and
- Third Party Contractor Fees: up to 50% of invoiced labour-based expenses.
Please Note: Project expenses made prior to IRAP ARP program approval will NOT be eligible towards final funding contributions.
Expenses Unable to Receive IRAP ARP Funding Grants
Any non-labour related fees will ultimately be deemed as ineligible to receive funding. Included in this classification are common project expenses such as:
- Employee training; and
- Certification costs.
When to Apply for IRAP ARP Research and Development Funding
SMBs who have met the eligibility requirements for IRAP ARP grants may choose to begin the program’s application process. Especially for IRAP programs, understanding when to apply for funding will help businesses to access these funds.
The program will receive a top-up of funds at the start of their fiscal year and award grants until all funds have been invested. Businesses are advised to submit project proposals, including a company overview and an innovation plan, at the start of NRC’s fiscal year on April 1 to ensure priority access to the funds.
Good Morning
Can you please advise me as to eligibility requirement of at least two years incorporation for consideration in IRAP?
Specifically if I do not meet that eligibility requirement, but have an outstanding new industrial/consumer product but need to access funds for a polished prototype, could you please direct me to any other channel/network that I could be considered for start up funding?
Thank in advance for your prompt reply to my request.
Darwin Donison
Hi Darwin,
NRC-IRAP funding can only be accessed by Canadian SMEs that have been incorporated for a minimum of 2 years with between 1-500 employees. IRAP grants must be used to offset internal R&D labour expenses (eg: technical employees).
However, startup resources are available to assist entrepreneurs and young businesses grow. There are very limited government funding resources available for startups, most programs require businesses to be incorporated for at least 2 years to be considered for funding.
Does the business have to be federally incorporated one? Business incorporated under provincial act is not eligible for the funding?
Hello John,
Thank you for reaching out with this question. The IRAP program requires that companies be incorporated within Canada. This means companies can access the program no matter if they are for federally incorporated or provincially incorporated, as either meets NRC’s requirements.
If you are interested in leveraging our years of experience with the program to help you navigate through the process and have us author your application, feel free to fill out our Funding Contact Form and we can go through your potential project together.
Do you have a list of overhead costs that are eligible to claim to avoid any government staking … to keep in the required law
Hi Suzanne – Good question. This actually depends on the government funding incentives you’re looking to combine, as some allow specific costs while others don’t allow stacking at all. Please be sure to check each funding program’s application guide to determine overlap and stacking rules and if you need any help, please feel free to contact us.
Hello,
My corporation is more than 2 years old but I as an owner worked voluntarily without having a payroll. Will I be eligible for IRAP for paying myself and hiring additional design engineers for a machine that I am developing? Or, if I include myself in the payroll now, will I be eligible?
Thanks,
Arif
Hi Arif – For eligible R&D activities, payroll salaries of employees directly involved in the research project would qualify. You will need to calculate the number of hours they would spend on the funded project, as only project-related hours would qualify. Since you are not on payroll, non-payroll labour would be ineligible for funding unless it is from a Canadian research subcontractor that your IRAP Industrial Technology Advisor (ITA) approves. I hope this helps! If you have any additional questions, please feel free to talk to us directly.
Hello, as of October 2020, we have been incorporated. Is it still an eligibility requirement to have been incorporated for at least 2 years – or just incorporated as the government NRC website states?
Thanks!
Hi Liam – Yes, it’s still a requirement, however there are Startup Resources you should look into for support during this important stage of your business’ growth.
Hello, is the IRAP ARP Funding only available to CCPC or to any company incorporated in Canada even if it is not CCPC?
Hi Eugene – Applicants for the NRC-IRAP program must be incorporated, profit-oriented small or medium-sized business in Canada with 1-500 payroll employees. If you have other questions, feel free to contact us directly and we can help.
My organization meets the incorporation and size criteria. I would like to improve production processes to increase efficiency and will hire an engineer but the production will not take place in Canada. Is my company still eligible for IRAP funding?
Hi Kathy – Thanks for the question. The project and research labour/subcontractors incorporated in an IRAP-funded project will need to be Canadian. We can look into alternative funding options if you are a Canadian incorporated business and that particular project isn’t taking place in Canada. There could be Canadian-based activities eligible for funding. Please feel free to fill out the contact form with some high-level project info and we can look into government funding options with you.
Hi Chris. To clarify, the engineer planning, implementing and overseeing the production improvements is Canadian and that is the labour for which I would seek to utilize IRAP. The production facility itself is not in Canada.
Thanks Kathy. Please give us some details by filling out our contact form and we can explore your options together.
Hi,
If you’re being approved and receiving IRAP but going through a merger with US company and assuming the merger is completed, would you have to repay IRAP for approved projects, or you would still qualify to continue receiving IRAP until projects are completed assuming Canadian operations don’t cease to exist?
Thank you,
AS
Hi Alla,
Thank you for your inquiry. Since you are continuing Canadian operations, you must ensure that the IP developed through the project remains with the Canadian entity.
You would most likely would not have to repay it, but it could depend on how soon the acquisition goes through and how finances between the acquired company and the US parent company are organized. We also recommend discussing these details with your ITA. We hope this helps!