The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) is Canada’s leading innovation assistance program for small and medium-sized businesses (SMBs).
NRC IRAP provides advice, connections, and funding to help Canadian small and medium-sized businesses grow, increase their innovation capacity, and take ideas to market.
The Program is delivered through a dedicated network of Industrial Technology Advisors located in communities across Canada, helping businesses succeed across all industry sectors.
What is IRAP?
Known as one of Canada’s best funding programs, IRAP offers non-repayable financial assistance covering 80% of salaries and 50% of contractor costs under the following subprograms. The total project costs and allocated funding are determined by working with an NRC IRAP Industry Technology Advisor (ITA).
1. Small Technology Innovation Projects, or the Accelerated Review Process (ARP)
Provides grants up to $50K to help firms fund R&D and/or commercialize technology projects.
2. Mid-sized Technology Innovation Projects
Provides larger grants up to $10 million that are typically focused on R&D, developing new innovative products, creating original software, etc.
3. Youth Employment Strategy Programs
Provides grants up to $30,000/graduate between the ages of 15–30 for a 12-month work placement. You may apply for up to two candidates, but candidates must not be an employee at the time of application submission.
Who is eligible?
In order to be considered for IRAP funding, you must meet the basic eligibility criteria:
- Be a Canadian SME, incorporated and profit-oriented
- Have 500 or less full-time employees
- Have the objective to grow and generate profits through the development and commercialization of innovative, technology-driven new or improved products, services, or processes in Canada.
How do you apply?
Your first step is to contact a local IRAP ITA at 1-877-994-4727 to discuss your project. The ITA will determine your eligibility and help you submit your funding proposal.
Here are some questions that we recommend having answers to before you meet with your ITA:
1. Technology/ Project Overview
- High-level overview of the technology or product that you are proposing to develop.
- What problem does it solve and why is it needed in the market?
- Potential roadblocks and mitigating strategies.
2. Management Team & Company Skillset
- Current company overview.
- Why are you the right team to see this project to completion and through commercial success?
- Does your team (or proposed partnerships, etc.) have the skills required to develop and market the product?
3. Financial Capability
- They want to know that you can cover the remaining 20% in salaries and 50% subcontractor costs as well as any other expenses not covered by IRAP (such as 100% of capital expenditures).
4. Business and Market
- Quantify the business opportunity.
- Market size and strategies to gain the proposed market share.
- Potential roadblocks and mitigation strategies.
- Intellectual property.
5. Economic Impact
- What economic impact will this create and what are the benefits to Canada – new jobs created, revenue growth, etc.
6. High-level project plan and timeline
- Detail phases if more than one.
- Timelines for each phase and proposed milestones.
- Costs for each milestone.
What is the deadline?
IRAP funded projects need to be carried out during their fiscal year, i.e. between April 1 of the current year to March 31 of the following year.
While IRAP’s financial assistance programs do not specify particular deadlines, we recommend getting in touch with your local ITA before April 1 to learn more about their funding cycle and to determine project eligibility for the upcoming fiscal year.
How is it different from SR&ED?
- IRAP requires a funding proposal before the project starts. Whereas, the expenses for SR&ED are claimed after they have been incurred.
- While the SR&ED claim is filed with your corporate taxes, you must work with an IRAP ITA to submit your funding proposal.
Can you claim both IRAP and SR&ED simultaneously?
IRAP does not cover overhead costs, but SR&ED does. SR&ED is claimed on the SR&ED eligible Salaries plus 55% Overhead Proxy less Government Assistance.
Since IRAP covers 50% of contractors and 80% of salaries, your company will be responsible for the remaining amount.
Here is an example of how you can leverage both IRAP and SR&ED simultaneously:
Your company is a Canadian Controlled Private Corporation (CCPC) that has been approved for a $100,000 IRAP grant that is a part of a $500,000 R&D project. Since IRAP covers 80% of salaries on their grants, your portion of the entire R&D project including the Non-IRAP portion would be $420,000.
Assuming all $500,000 in expenditures went towards salaries of individuals who spent 100% of their time on SR&ED-eligible work, your company could recover ~$288,000 (depending on the province) in SR&ED tax credits. If your company does not owe any taxes, you would receive ~$288,000 SR&ED refund check from the government.
If you add the $80,000 from IRAP and $288,000 from SR&ED, you would receive $368,000 in funding that enables your company to conduct R&D and commercialize your innovation.
For more information, visit the NRC- IRAP website or call their toll-free number at 1-877-994-4727.