Top 10 Government Funding Programs for Canadian Cleantech Innovation

The Government of Canada is dedicated to building a strong green economy by supporting Canadian businesses in the research and development of sustainable clean technologies with a variety of cleantech funding programs. Canadians are being urged to bring forward new innovative ideas that will lead to the commercialization of important cleantech solutions across all industries.

“Investments in clean technology help harness made-in-Canada sustainable solutions to accomplish two goals at once: create economic opportunities and reduce Canada’s environmental footprint.”

Navdeep Bains, Minister of Innovation, Science and Industry

Clean technology and innovation funding will help Canada meet climate change goals, reduce the country’s environmental footprint, and continue Canada’s progress towards becoming global leader in clean technology so that all Canadians may benefit from a cleaner country and an advancing cleantech sector.

Government Funding for Canadian Cleantech Solutions  

With the need for cleantech solutions rising around the world, there are many government programs to fund projects which that will position Canada as a more sustainable and environmentally friendly nation.

To help Canada reach and exceed its goals in tackling climate change impacts, here are five government funding programs that are currently available to support Canadian businesses with the research and development of sustainable innovation projects:  

Industrial Research Assistance Program (IRAP)

The Industrial Research Assistance Program (IRAP) is a funding program designed to accelerate the research and development projects of Canadian innovators. Businesses developing and implementing industrial process solutions can apply for research funding contributions through IRAP. However, large-scale technology adoption projects that lead to new, more sustainable capabilities are also considered.

Amount: Funds up to 60-80% of internal technical labour and subcontractor expenses.

Eligibility: Employ 1-500 staff, incorporated for ≥2 years, committed to internal R&D activities.

Timeline: Projects require approval prior to spending and funding runs from April 1 to March 31 to align with the government fiscal year.

Project Activities: Develop innovative products, processes, and services. Projects must focus on solving an internal technical challenge by adopting/developing technology & processing enhancements.

Innovative Solutions Canada (ISC)

Innovative Solutions Canada (ISC) provides government grants and procurement contracts to stimulate technology research, development, and commercialization. This program helps Canadian start-ups and small to medium-sized businesses (SMEs) overcome technology development hurdles to produce globally demanded products and services and improve government operations.

Amount: Phase 1: Grants up to $150k; Phase 2: Grants up to $1M; Phase 3: Procurement contracts – no maximum.

Eligibility: For-profit, privately held Canadian businesses with a maximum 499 full time employees.

Timeline: Ongoing departmental innovation challenges each have a unique application deadline. Phase 1 projects may last up to six months while Phase 2 projects may span up to two years.

Project Activities: Proof of concept and prototype development projects to solve federal government departmental innovation challenges. Specific projects depend on challenges currently open for application.

Sustainable Canadian Agricultural Partnership (SCAP)

The Sustainable Canadian Agricultural Partnership (SCAP) is a federal effort to strengthen the competitiveness, innovation, and resilience of the agriculture, agri-food, and agri-based products industries. The Canadian government, provincial governments, and territorial governments have signed a 5-year SCAP agreement until 2028 with a budget of $3.5 billion to bring sustainable clean technology and energy projects to agricultural businesses.

Amount: There are dozens of SCAP programs available, each with their own project eligibilities and funding amounts. While many programs distribute grant funding, some are a mix of grants and loans, and some are primarily loans. Currently the maximum any one program offers is $3 million per eligible project.

Eligibility: Please see each SCAP program via our main SCAP page to assess eligibility for programs such as the Meat Processing Capacity Initiative (MPCI) program which offers up to $150,000 in grants for eligible meat processors and abattoirs in Ontario.

Timeline: Each program has its own timeline for open applications and deadlines. SCAP programs will run until 2028 when the funding agreement will end.   

Sustainable Development Technology Canada (SDTC)

The SDTC Tech Fund  supports Canadian companies, especially clean technology leaders, to research, develop, and demonstrate new environmental technologies that address climate change, clean air, clean water, and clean soil. The average funding awarded has been between $2 million to $4 million.

Amount: Program provides a 33% towards eligible expenses, paid one funding milestone in advance.

Eligibility: Applicants must be Canadian companies planning to undertake an R&D and/or demonstration project to prove emerging and novel clean technologies and innovation. Projects must be in late-stage development / pre-commercialization (TRL 3-7).

Timeline: This program has a continuous intake and expects four to six milestones in each eligible project.

Project Activities:  Projects must lead to significant environmental impacts including GHG emissions reductions, clean air, clean water, and clean soil.

Strategic Innovation Fund (SIF) – Net Zero Accelerator

The SIF’s Net Zero Accelerator Program supports rapid decarbonization projects from large carbon emitters, research and development, commercialization scale-up of clean technologies, and acceleration of industrial transformation to help reduce greenhouse gas emissions.

Amount: Up to 50% in grant and/or loan funding for a minimum $10 million project budget.

Eligibility: Businesses must be operating in Canada. Projects can come from any industry sector, but the company should have high growth potential, and projects must result in significant environmental and economic benefits to Canada.

Timeline: Continuous application intake.

Project Activities:  Projects should lead to significant environmental impacts and benefits to Canada or support the growth of Canada’s low-carbon economy. Three focus areas include: 

• Development/adoption of clean tech for all industrial sectors;
• Cleantech development in aerospace and automobile manufacturing sectors; and
• Development of a Canadian battery innovation and industrial ecosystem.

Cleantech Investment Tax Credits (ITC)

To help the Canadian federal government hit their net-zero emissions goal by 2050, they are committed to implementing the following new cleantech tax credits by the end of 2024 to provide businesses with the certainty they need to invest in clean technologies and contribute to Canada’s net-zero goals. These six major economic investment tax credits represent $93 billion in federal incentives, and they’re aimed at attracting private investment in clean technologies. These include:

Carbon Capture, Utilization and Storage (CCUS) Program Overview

The CCUS Program prioritizes solutions along the CCUS value chain to enable broad deployment, low carbon hydrogen technologies across the entire value chain, and next-generation materials and products from natural gas.

Eligible expenditures incurred from January 1, 2022, to December 31, 2030, can receive a refundable tax credit as follows:

• Up to 60% for capturing carbon from ambient air.
• Up to 50% for capturing carbon from other sources.
• Up to 37.5% for transporting, storing, or utilizing captured carbon.

From January 1, 2031, to December 31, 2040, the tax credit is reduced by half. No tax credit is available after 2040.

Clean Technology Investment Tax Credit Program Overview

This program offers a refundable tax credit of up to 30% is available for investments in eligible property acquired and operational between March 28, 2023, and the end of 2033. For property operational in 2034, the tax credit is reduced to 15%. No tax credit is available for property that becomes operational after 2034.

Clean Hydrogen Investment Program Overview

A refundable tax credit of up to 40% is available for investments in hydrogen production projects that become operational between March 28, 2023, and the end of 2033. For projects operational in 2034, the tax credit is generally reduced by half. No tax credit is available for projects that become operational after 2034.

Clean Technology Manufacturing Investment Program Overview

A refundable tax credit of 30% is available for investments in eligible property used for clean technology manufacturing and critical mineral extraction and processing, acquired and operational from 2024 to 2031. The tax credit decreases to 20% in 2032, 10% in 2033, and 5% in 2034.

Clean Electricity Investment Tax Credit Program Overview

A refundable tax credit of up to 15% is available for investments in projects that generate clean electricity, store electricity without fossil fuels, or transmit electricity between provinces and territories. This tax credit applies to projects that begin construction after the 2024 federal budget is delivered and did not start before March 28, 2023. No tax credit will be available after 2034.

To learn more about the Canadian government prioritizing Cleantech initiatives and their upcoming plans, read our business funding analysis of the Federal Budget 2024.

Canadian Grants and Loans for Cleantech and Innovation

Visit our detailed Cleantech Funding page to learn more about the numerous Canadian government funding programs available that support innovative projects across the country by providing financial assistance in the form of grants and/or loans.

Innovation is a mindset that businesses must adapt to remain relevant to consumers. Without research and development, your client base will eventually find more appealing alternatives to your product(s), service(s), and/or solution(s).

Download our free Collaborative Research Project Guide resource to learn more about working on innovative research and development products, services, and solutions, and how to maximize project turnaround times by collaborating with other like minded and motivated organizations.

[“hspotresearch”]