The Industrial Research Assistance Program (IRAP) is one of Canada’s leading innovation programs specifically designed for small and medium-sized businesses (SMBs). Backed by federal funding, IRAP is under the management of the National Research Council (NRC) of Canada. Further, the NRC IRAP provides a wealth of information, funding, advice, and connections to help SMBs grow, expand their ability to innovate, and bring ideas to the forefront.
How IRAP Works
Essentially, the NRC IRAP covers up to 80% of salaries and up to 50% of contractor fees under three sub-programs. Moreover, an NRC IRAP Industry Technology Advisor (ITA) will work with you to determine your total project costs and designated funding.
Here’s an overview of the three sub-programs available to you.
1. Mid-sized Technology Innovation Projects
This grant program provides funding up to $10 million, specifically focused on R&D, creating innovative products, developing original software and much more.
2. Small Technology Innovation Projects or The Accelerated Review Process (ARP)
Next, this subprogram helps firms fund research and development (R&D) and/or commercialize their technology projects. Moreover, it can provide you with up to $50K in grant funding.
3. Youth Employment Strategy Programs
Finally, this program provides grants up to $30K per graduate between 15-30 years old for a 12-month work placement. You can apply for up to two candidates, but they cannot be an employee at the time you submit your application.
Who Is Eligible?
In order for the NRC to consider you for IRAP funding, you must meet the following basic eligibility criteria, you must meet the following basic eligibility criteria:
- Be a Canadian SMB, incorporated and profit-oriented
- Have 500 or fewer 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
NRC IRAP Funding Requirements
The IRAP funding application process goes beyond the mere submission of a funding proposal. To qualify for this funding, applicants must meet with a local ITA to evaluate their company and build their application.
At Maxim Innovation, we will review these attributes of your company:
- Management team, including evaluating the worthiness of current leadership
- Financial stability, including the ability to cover additional expenditures related to IRAP-funded projects
- Company skill sets, such as the ability to develop and market products or services
- Overview of technology in use and potential project pitfalls
- Market and business opportunities, such as potential customers, problems solved through products in development, and strategies to gain market share
- High-level project plans and timelines
There is no annual deadline to apply, but you are encouraged to submit proposals as soon as possible.
How Is IRAP Different Than SR&ED?
SR&ED is a tax incentive program run by the CRA. This program lets you claim tax credits on R&D projects already incurred costs. Read our blog about SR&ED and its requirements here.
IRAP is a grants program run by the NRC. This program allows you to obtain funding in advance of incurring R&D project costs & helps you mitigate technical & financial risks in a project.
No SR&ED and IRAP Stacking
Conflict often arises between both programs when a client wants to utilize SR&ED and IRAP for the same project. You cannot claim due diligence activities in SR&ED, i.e. you can only claim experimental development. Meanwhile, IRAP contributes to R&D activities that are not necessarily SR&ED eligible. Therefore, both are useful based on what expenses your company has or will incur the most.
For example, certain projects may not be completely SR&ED eligible. But businesses could choose IRAP for a project involving large quantities of salaries and/or subcontractor costs. Reason being that the IRAP program offers a higher contribution for these expenses. On the other hand, SR&ED can be utilized for material and overhead costs for a relevant project. This allows your business to plan effectively and improve the certainty of cash flow for projects.
It’s important to mention that if you use IRAP for any project, it must be noted in the application for any other funding. Both programs (if used effectively) allow for the growth of your business and Canada as a whole.
Maxim Innovation Can Help
Navigating the 1000s of Canadian tax incentives and grant programs is without a doubt an overwhelming process. Maxim Innovation has the expertise and experience to guide you through the programs and processes. We will build a claim or application that fits your needs as a leader in research and development in your industry. Further, we will simplify and champion the application process so you can get the funding you deserve.
