New $900M Federal Defence Innovation Funding

New $900M Federal Defence Innovation Funding – Opportunities for Canadian Businesses

The Government of Canada has announced a major new investment of over $900 million to strengthen Canada’s defence innovation ecosystem and expand opportunities for Canadian companies. The announcement was made as part of Canada’s new Defence Industrial Strategy.

The investment will be delivered primarily through the National Research Council of Canada (NRC) in collaboration with the Department of National Defence and Canadian industry.

This initiative represents one of the largest defence innovation funding opportunities for Canadian businesses in recent years, particularly for companies involved in advanced technologies, manufacturing, aerospace, artificial intelligence, and research and development.

What Is New in This Announcement

The new strategy introduces several initiatives designed to strengthen Canada’s domestic defence industry and create new opportunities for Canadian companies.

Key elements include:

• Creation of a Drone Innovation Hub in the Ottawa–Montreal corridor to accelerate development of unmanned aerial systems and related technologies.
• Purchase of a Canadian-built Bombardier Global 6500 research aircraft that will support industry and academic development of defence technologies.
• Launch of a new funding stream called Defence Industry Assist (DI Assist) under the NRC Industrial Research Assistance Program (IRAP).
• Increased funding for research in quantum technologies, aerospace systems, biomedical countermeasures, sensors, and advanced defence technologies.
• Stronger integration between Canadian businesses, universities, and defence agencies.

The objective is to expand Canada’s domestic defence innovation capacity while supporting Canadian companies in global defence markets.

Funding and Grants Available to Canadian Businesses

The most important element for industry is the creation of the Defence Industry Assist (DI Assist) program, which will provide direct support to Canadian businesses developing dual-use technologies (civilian and defence applications).

Typical support available through the NRC IRAP framework may include:

• Non-repayable contributions for R&D projects
• Up to 80% of labour costs related to eligible research and development
• Support for technology development, testing, and commercialization
• Project funding that can range from $50,000 to $500,000+ depending on project scope

Funding will support projects in areas such as:

• Drone and unmanned systems
• Aerospace and avionics technologies
• Artificial intelligence and cybersecurity
• Quantum technologies
• Sensors and surveillance technologies
• Advanced manufacturing and materials
• Biomedical and biosecurity technologies

Eligibility Requirements for Businesses

To access funding under the NRC IRAP and DI Assist programs, businesses typically must meet the following parameters:

1. 1. 1. Be incorporated and operating in Canada
      2. Be a for-profit small or medium-sized enterprise (generally under 500 employees)
      3. Conduct research and development activities in Canada
      4. Develop innovative or novel technologies
      5. Demonstrate commercialization potential
      6. Show the ability to benefit the Canadian economy through jobs and growth
      7. Maintain technical staff capable of carrying out the project
      8. Have financial capacity to complete the project
      9. Demonstrate that the project involves technological advancement or innovation
      10. Align with priority sectors such as aerospace, defence technology, digital systems, robotics, or advanced manufacturing

Application Timing and Deadlines

Unlike many federal programs, NRC IRAP programs generally accept applications on a rolling basis.

However:

• Funding allocations are tied to the federal fiscal year (April – March)
• Early applications are strongly recommended to secure funding availability
• Businesses must typically engage with an NRC Industrial Technology Advisor before submitting a formal application

How Canadian Businesses Can Take Advantage

Canadian companies should consider the following steps:

• Identify technologies that may have dual-use applications in defence and civilian markets
• Develop R&D proposals focused on innovation and commercialization
• Establish partnerships with universities, defence contractors, and research organizations
• Engage with NRC IRAP advisors early to assess eligibility

Companies in aerospace, AI, robotics, advanced manufacturing, cybersecurity, and life sciences are particularly well positioned to benefit from these initiatives.

How GTA Strategies Can Assist

At GTA Strategies, we are closely monitoring this new defence innovation initiative and are assisting companies in navigating federal funding programs.

Our services include:

• Identification of eligible federal funding programs and grants
• Preparation of grant applications and project proposals
• Strategic advice on defence procurement and supply chain opportunities
• Facilitating partnerships with research institutions and industry stakeholders
• Government relations support with federal departments and agencies

With Canada increasing defence investment and strengthening domestic manufacturing capacity, this initiative presents significant opportunities for innovative Canadian companies.

If your company is interested in exploring federal defence innovation funding or entering Canada’s defence supply chain, we would be pleased to discuss how we can assist.