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Canadian tech startups have access to some of the most generous government funding in the world. Yet many founders leave money on the table—either because they don't know these programs exist or because the process seems too complex. Here's a practical guide to the main funding sources.

SR&ED: The R&D Tax Credit

The Scientific Research and Experimental Development (SR&ED) program is Canada's largest R&D incentive. If you're building software, AI, or novel technology, you likely qualify.

Key points:

Refundable credits for Canadian-controlled private corporations (CCPCs): up to 35% of eligible R&D spend
Non-refundable credits for other corporations: 15%
Eligible activities include technical uncertainty, systematic investigation, and advancement of knowledge

Common mistake: Assuming only lab science qualifies. Software development, AI experiments, and integration challenges often count—if you're solving technical uncertainty.

IRAP: Industrial Research Assistance Program

IRAP provides advisory services and funding for R&D projects. Unlike SR&ED (a tax credit), IRAP is project-based and can fund up to 50% of project costs.

Best for: Pre-revenue or early-stage companies with a clear R&D roadmap.

Other Programs to Explore

Strategic Innovation Fund (SIF) — Larger-scale projects with significant economic impact
Canada Digital Adoption Program (CDAP) — Grants to adopt digital technology
Provincial programs — Most provinces offer matching or complementary incentives

Tips for Success

Document as you go — Contemporaneous notes are worth more than retrospective write-ups
Partner with experts — SR&ED specialists can often identify eligible work you've overlooked
Plan ahead — Some programs have application windows; don't wait until year-end

Government funding won't replace venture capital, but it can extend your runway and reduce dilution. Every dollar from SR&ED or IRAP is non-dilutive—worth considering before your next round.