Forestry Grants in Canada: Funding Programs for Sustainable Growth and Innovation

Introduction

Canada’s forestry industry has long been one of the cornerstones of the national economy, supporting tens of thousands of jobs across rural and northern communities. From sawmills in British Columbia to wood transformation plants in Québec, forestry businesses play a key role in economic development, trade, and environmental stewardship.

But the industry is evolving. Pressures from global competition, sustainability requirements, and the need for modernization have pushed companies to innovate faster than ever. Energy efficiency, clean technology, and value-added production are now essential to staying competitive.

Fortunately, Canada offers a wide range of forestry grants, incentives, and funding programs that support modernization, innovation, and green growth. These programs help companies offset project costs, adopt new technologies, and develop sustainable practices that benefit both business and the environment.

Whether your company specializes in harvesting, lumber processing, biomass energy, or wood product manufacturing, this guide outlines the top forestry funding opportunities in Canada—and how your business can access them.

Why Forestry Companies Need Funding and Grants

The forestry sector faces a complex mix of challenges and opportunities. On one hand, demand for renewable materials and sustainable construction products is rising; on the other, companies must adapt to stricter environmental regulations and global market fluctuations.

Government funding programs aim to bridge that gap—encouraging modernization while keeping operations sustainable and competitive. Grants can help forestry companies:

• Invest in new manufacturing equipment and automation.

• Adopt clean technologies that reduce carbon emissions.

• Expand into bio-based and circular economy products.

• Support Indigenous partnerships and community development.

• Finance research and development (R&D) for new wood products.

In essence, funding supports the transition from traditional resource extraction to a modern, diversified bioeconomy, where innovation drives profitability and sustainability.

Federal Forestry Grants and Programs

The federal government provides a range of funding opportunities for forestry businesses through Natural Resources Canada (NRCan), Innovation, Science and Economic Development (ISED), and other national programs. These initiatives promote modernization, cleaner operations, and advanced manufacturing in the forest sector.

Investments in Forest Industry Transformation (IFIT)

The IFIT program is one of the most significant federal initiatives supporting innovation in the forestry industry. Managed by Natural Resources Canada, IFIT funds projects that help companies adopt transformative technologies and create new high-value products from wood.

Examples include converting wood residues into biofuels, producing engineered wood composites, or integrating artificial intelligence into sawmill operations.

Eligible activities include:

• Pilot or demonstration of new forestry technologies

• Process optimization or waste reduction projects

• Commercialization of sustainable wood-based products

IFIT typically provides non-repayable contributions covering up to 50% of eligible project costs, with a focus on projects that enhance sustainability and reduce greenhouse gas emissions.

Sustainable Development Technology Canada (SDTC)

For forestry companies developing cleantech solutions, SDTC offers funding to help move innovations from prototype to commercialization. This can include bioenergy, bioplastics, carbon capture, or low-carbon forestry operations.

SDTC projects often involve partnerships between manufacturers, industrial groups, and research institutions—helping small and medium forestry companies scale new technologies faster.

Strategic Innovation Fund (SIF)

The Strategic Innovation Fund supports large-scale industrial innovation projects across Canada, including in the forestry and bioeconomy sectors.

SIF offers both repayable and non-repayable contributions to projects that:

• Increase productivity and competitiveness

• Strengthen supply chains

• Create sustainable jobs in rural areas

Forestry companies developing new wood-based materials, improving automation, or expanding green manufacturing capacity may qualify under the “Net-Zero Accelerator” or “Industrial Transformation” streams.

Clean Growth Program (NRCan)

The Clean Growth Program supports natural resource sectors—including forestry—in implementing clean technologies that reduce environmental impacts.

Projects often focus on:

• Improving energy efficiency in sawmills and wood drying facilities

• Reducing waste and water use in wood processing

• Integrating renewable energy systems into forestry operations

This program aligns directly with Canada’s emissions reduction goals and supports companies performing modern manufacturing operations in the forest sector.

Indigenous Forestry Initiative

The Indigenous Forestry Initiative (IFI) promotes Indigenous-led forestry businesses and partnerships. It provides funding for community-based projects that encourage sustainable forest management, skills development, and participation in the forest bioeconomy.

Projects can include forest planning, biomass energy, or joint ventures with non-Indigenous companies. The IFI is an important step toward economic reconciliation and long-term stewardship of Canada’s forest resources.

National Research Council Industrial Research Assistance Program (NRC IRAP)

Forestry companies developing innovative technologies—such as automation tools, AI optimization systems, or new bio-products—may qualify for NRC IRAP. This program helps small and medium enterprises (SMEs) fund R&D activities and access expert technical advice.

It’s particularly beneficial for smaller forestry firms collaborating with research partners or developing new machinery and processing systems.

Provincial Forestry Funding Programs

While federal programs provide broad coverage, many of the most accessible grants are available at the provincial level. Each province has specific programs targeting local priorities—whether that’s wood innovation in BC, bioenergy in Alberta, or wood transformation in Québec.

British Columbia Forestry Grants

British Columbia remains Canada’s forestry powerhouse, accounting for roughly one-third of national forest product exports. The province offers several key funding programs:

• BC Manufacturing Jobs Fund (MJFF): Supports forest sector projects that create jobs and improve competitiveness. Priority is given to manufacturing diversification and value-added wood production.

• CleanBC Industry Fund: Provides funding for industrial projects that reduce greenhouse gas emissions. Forestry companies can apply for energy efficiency retrofits or biomass energy projects.

• Forest Enhancement Society of BC (FESBC): Focuses on wildfire risk reduction, reforestation, and improving the use of wood fibre. It funds both community and commercial forestry initiatives.

Together, these programs help BC forestry companies transition toward cleaner, more innovative operations.

Ontario Forestry Incentives

Ontario’s forest sector contributes over $18 billion annually to the economy, with strong growth in engineered wood, furniture manufacturing, and biomass energy.

Key funding opportunities include:

• Forest Sector Investment and Innovation Program (FSIIP): Ontario’s flagship forestry grant, offering up to 30% of eligible project costs for innovation, new equipment, or process improvements.

• Regional Development Program (RDP): Supports modernization and expansion of forestry-related manufacturing facilities, particularly in northern and rural Ontario.

• Ontario Centres of Innovation (OCI): Provides funding and partnerships for R&D and technology adoption in the wood industry.

These programs target both primary producers and secondary manufacturers—such as wood furniture or panel producers—performing advanced manufacturing operations in Ontario.

Québec Forestry Subventions

In Québec, the forest sector benefits from a strong government commitment to innovation and value-added production.

Key programs include:

• Programme Innovation Bois (Investissement Québec): Supports projects that increase productivity, integrate advanced technology, or develop innovative wood products.

• Fonds du Développement Forestier Durable: Finances projects that improve forest management and promote sustainable harvesting.

• Bioénergie et transformation du bois programs: Support the use of forest biomass to produce clean energy and diversify product lines.

Québec’s bilingual business ecosystem also creates opportunities for international funding partnerships and export-oriented projects.

Alberta and Atlantic Canada Programs

While smaller in size, the forestry industries in Alberta and Atlantic Canada are rapidly modernizing.

• Alberta Innovates – Bioindustrial Opportunities: Provides funding for bio-based products, advanced materials, and clean energy derived from wood biomass.

• Northern Alberta Development Council (NADC): Supports regional economic diversification, including forestry innovation.

• Atlantic Canada Opportunities Agency (ACOA): Offers funding for productivity improvements and innovation in wood processing.

• Northern Ontario Heritage Fund Corporation (NOHFC): Provides support for business expansion and equipment acquisition in the forest sector.

Each program helps regional forestry businesses remain competitive and sustainable in evolving markets.

Emerging Funding Themes in the Forestry Sector

Government funding is evolving alongside the forestry sector itself. Several emerging themes are shaping the next generation of forestry grants in Canada:

1. Green and Low-Carbon Manufacturing

Forestry operations are being encouraged to adopt clean technologies that reduce emissions. Programs like CleanBC and SDTC reward companies that integrate renewable energy, carbon capture, or waste heat recovery.

2. Digital Transformation

Automation, robotics, and data analytics are transforming how sawmills and manufacturing plants operate. Funding now targets companies performing smart manufacturing operations, improving yield, safety, and productivity.

3. Bioeconomy and Circular Innovation

Grants increasingly support the production of bioproducts such as biofuels, bioplastics, and wood composites—turning residues into valuable resources.

4. Indigenous Collaboration

Programs like IFI emphasize Indigenous participation and equitable partnerships, promoting sustainable land use and economic self-determination.

5. Workforce Development

Several provincial funds now include training and upskilling components, ensuring the forestry workforce can adapt to digital tools and automation.

How to Qualify and Apply for Forestry Grants

Eligibility criteria differ between programs, but most forestry funding follows similar guidelines. To maximize your success rate, companies should:

1. Define a clear project plan: Describe the innovation, sustainability, or modernization goal.

2. Demonstrate measurable impact: Outline economic benefits, job creation, and environmental improvements.

3. Ensure alignment with program objectives: Each grant supports specific outcomes (e.g., carbon reduction, innovation, Indigenous engagement).

4. Prepare documentation: Financial statements, project budgets, and business plans are typically required.

5. Apply early: Many forestry programs have limited intake periods or competitive evaluation rounds.

Working with an experienced grant consultant can significantly increase your approval chances, ensuring the project fits eligibility criteria and that all documentation is precise and compelling.

Why Work With a Grant Consultant

Navigating the world of forestry grants can be complex. Programs often overlap or change frequently, and missing a single eligibility detail can delay or disqualify an application.

A grant consultant specializing in the forestry and manufacturing sectors can:

• Identify all available programs for your specific project.

• Prepare strong technical and financial applications.

• Manage submissions and reporting obligations.

• Save time and improve funding success rates.

For companies juggling daily operations and compliance demands, professional guidance ensures no opportunity is missed.

Conclusion

The forestry industry is at a turning point. As global markets demand sustainable materials and cleaner operations, Canadian forestry companies have an unprecedented opportunity to innovate—and government funding is here to help. From federal programs like IFIT and SDTC to provincial incentives in BC, Ontario, and Québec, dozens of grants are available to support modernization, clean technology, and sustainable forestry practices.

That’s where working with grant experts like helloDarwin can make all the difference. Our team specializes in identifying the best funding opportunities for your specific industry, project goals, and region. We help you understand the requirements, prepare compelling applications, and manage submissions efficiently—so you can focus on growth instead of paperwork.

Whether you’re looking to finance innovation, expand operations, adopt sustainable technologies, or invest in digital transformation, helloDarwin connects you with the right funding programs and partners to make it happen. If you want to accelerate your business goals and make sure no opportunity goes unnoticed, reach out today. Our experts are here to simplify the process, save you time, and help you secure the grants your organization deserves.