One of the major concerns for Canadian startups is secure funding. By 2025, business owners will have access to a strong and varied network of grants, loans, and innovation initiatives. There are funding sources that are suited to your needs, whether you’re starting a food business, growing an existing firm, or developing a software startup. This article provides a detailed overview of the most significant programs, qualifying requirements, and methods for optimizing your funding possibilities.
1. Federal Grants and Programs
Scale AI
With the help of Scale AI, a federally funded innovation hub, Canadian businesses tend to embrace AI more quickly, especially in supply chain innovation. In 2025, Scale AI introduced a $30 million fund that covers up to 40% of the cost of “high-impact” AI initiatives. All Canadian businesses are eligible for the program, which emphasizes production and commercialization. For projects to qualify for reimbursement, they must be finished before the end of 2025. Although there are no predetermined minimum or maximum expenditure restrictions, projects are evaluated based on their economic benefit and technological superiority.
Innovative Solutions Canada
This program is open to all industries, has continuous intakes, and offers a pathway to commercialization through government procurement. It provides grants for Canadian SMEs that are creating and testing innovative solutions to government challenges. Funding is made available in two phases: up to $150,000 for feasibility studies and up to $1,000,000 (sometimes more) for prototype development and testing.
Canada Small Business Financing Loan (CSBFL)
Startups and small to medium-sized enterprises (SMEs) can obtain loans of up to $1,000,000 through the CSBFL program to expand their operations, upgrade facilities, or purchase equipment. Lenders and the government share risk, which facilitates financing for start-up companies. All industries are welcome to participate in this year-round initiative.
Industrial Research Assistance Program (IRAP)
The National Research Council oversees IRAP, which offers financial assistance and consultancy services for product development and technological innovation. Grants can support the digital transformation and new product development of small and medium-sized firms by covering up to 80% of salaries and 50% of contractor costs.
Scientific Research and Experimental Development (SR&ED) Tax Incentives
Canada’s premier R&D tax credit scheme, the Scientific Research and Experimental Development (SR&ED) program, offers refundable or non-refundable credits for qualified research and development (R&D) expenditures. Businesses of all sizes can participate in this initiative, which can significantly reduce expenses associated with process optimization, software development, and innovation.
2. Sector-Specific and Regional Funding
Canadian Food Innovation Network (CFIN) Innovation Booster
This initiative, designed for companies in the food and agri-tech industries, offers matching funding of up to 50% of qualified project costs, with a maximum commitment of $100,000. Eligible projects must be finished within a year and concentrate on food-related research and demonstration activities. Candidates must be Canadian-incorporated companies with annual sales of less than $50 million.
Momentum Fund (Desjardins)
Offering up to $20,000, this fund is designed to support initiatives that enhance Quebec’s local economy. For startups and SMEs hoping to stimulate innovation or create jobs locally, it is perfect.
LTI³ (InnovLOG)
LTI³ helps SMEs modernize supply chains and boost operational efficiency by providing up to $28,500 for transportation and logistics digitalization initiatives.
Provincial and Territorial Grants
With an emphasis on technology, green energy, export growth, and other key areas, each province and territory offers a unique set of funds designed to support entrepreneurs. Alberta Innovates and BC Innovates offer funds and advisory services for tech and digital enterprises, while FedDev Ontario promotes innovation-driven projects in Southern Ontario.
Ontario Interactive Digital Media Tax Credit (OIDMTC)
This tax credit encourages innovation in Ontario’s tech industry by covering up to 40% of qualified development expenditures for businesses producing digital media products, like video games and applications.
3. Inclusive and Demographic-Focused Funding
Women-Focused and BIPOC-Focused Grants
Funding specifically for underrepresented entrepreneurs is available through various programs and initiatives. Futurpreneur Canada, which offers financing and mentorship to young and Indigenous entrepreneurs. StrikeUP Conference grants and DELIA (for women-owned enterprises in rural Ontario) are the two other programs that support underrepresented entrepreneurial efforts.
Grand Challenges Canada: Transition to Scale
This initiative supports projects that tackle important issues and scale-tested solutions, funding ideas that have a global impact, especially in the fields of health and education.
4. Maximizing Your Funding Strategy
Combine Multiple Sources
Startups can often combine grants, loans, and tax credits to optimize their support, and most programs cover between 30% and 75% of qualified costs. A tech business might, for instance, use CSBFL for equipment financing, SR&ED for tax credits, and IRAP for research and development.
Prepare a Competitive Application
Successful applications typically demonstrate creativity, commercial potential, and a well-defined strategy for allocating resources to achieve quantifiable results. Create thorough project descriptions, schedules, and budgets that emphasize how your company aligns with the funder’s requirements.
Leverage Advisory Services
In addition to financial support, many organizations, such as IRAP and BDC, also offer mentorship and advisory services. These areas can help you connect with industry partners, polish your application, and strengthen your business plan.
Stay Informed and Act Early
Budgets and application deadlines for funding programs are frequently constrained. Stay informed about deadlines and new opportunities by utilizing resources like Innovation Canada’s Business Benefits Finder.
5. Additional Noteworthy Programs
- Mitacs: Provides funding for joint R&D initiatives between academic institutions and startups.
- FedDev Ontario: Provides repayable, interest-free funding for corporate expansion driven by innovation, ranging from $125,000 to $10 million per project.
- CanExport SMEs: Offers companies creating new export markets and opportunities up to $50,000, or 50% of project expenditures.
- Canada Digital Adoption Program (CDAP): This program offers grants of up to $15,000 for planning digital transformation and $2,400 for e-commerce initiatives.
- Development of E-Business Tax Credit (CDAE): This allows companies providing professional, cultural, and informational services in Quebec to claim up to 30% of project costs.
In 2025, Canada’s funding environment will be enriched, offering startups a diverse range of grants, loans, and innovation initiatives to enhance their competitiveness and growth. Canadian business owners and startup entrepreneurs can obtain the resources they require to start, grow, and thrive in a fast-paced international market by being aware of their possibilities, crafting compelling applications, and integrating information from various sources.
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Disclaimer: This article is based on publicly available information intended only for informational purposes. CanadianSME Small Business Magazine does not endorse or guarantee any products or services mentioned. Readers are advised to conduct their research and due diligence before making business decisions.
