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

The forestry sector in Ontario is a cornerstone of rural economies and a key player in Canada’s push for sustainable, bio-based industries. To drive innovation, automation, retooling, and climate resilience in this sector, a range of grant and funding programs are available. These programs – at both the provincial and federal level – support sawmills, engineered wood manufacturers, biomass and biochar developers, and other forest product processors. In this article, we’ll explore the major funding opportunities in Ontario’s forestry sector, including their funding types, amounts, eligibility criteria, and the types of projects they support. The focus is on programs that foster innovation, boost competitiveness, encourage biomass utilization, support Indigenous business development, and promote a climate-resilient forestry industry.

Ontario Provincial Funding Programs for the Forestry Sector

Ontario’s provincial government offers several targeted and region-specific funding programs to help forestry businesses modernize and grow. These programs encourage investments in new technology, productivity improvements, and sustainable product development. Below are the key provincial initiatives:

Forest Sector Investment and Innovation Program (FSIIP)

The Forest Sector Investment and Innovation Program (FSIIP) is Ontario’s flagship fund for forestry companies looking to make major capital investments in innovation and productivity. It is designed for for-profit wood and biomass processors – such as sawmills, engineered wood and panel manufacturers, pulp and paper mills, and bio-product companies – undertaking large projects that enhance competitiveness and create jobs across the province.

• Funding Type & Amount: FSIIP provides support in the form of a performance-based loan covering up to 30% of a project’s eligible costs. For example, if a company undertakes a $10 million expansion, FSIIP could finance up to $3 million. Notably, up to 50% of this loan may be forgivable if the company meets agreed-upon targets (such as investment levels, job creation, and payroll growth) after the project. In practice, substantial funding (often in the millions) can be accessed – recent projects have seen Ontario commit well over $5 million through FSIIP for transformative investments. Stacking with other funding is generally not permitted for the core business stream (to ensure FSIIP is the primary funding source), although collaboration-based projects may have different rules.

• Eligibility Criteria: Applicants must be established Ontario forestry businesses in manufacturing or processing. This includes primary and secondary wood product manufacturers and bioenergy or biochemical producers using forest biomass. A key requirement is that the project involves new capital investment in Ontario (e.g. building a new facility, major equipment purchase, or technology adoption) and has a minimum project size of $3 million in eligible costs. The program is not for small upgrades – it targets significant expansions or innovations. Also, purely resource extraction or logging/hauling operations are not eligible. The company should ideally have a solid financial track record to take on a large project.

• Supported Project Types: FSIIP prioritizes projects that improve productivity and innovation within the operation, such as installing state-of-the-art production lines, implementing advanced automation systems, or adopting innovative processing techniques. Projects should enhance competitiveness (e.g. reduce unit costs, increase product quality), open up new markets (for example, producing a value-added wood product for export), or introduce new sustainable products (like biofuels or wood-based bioproducts). They must also demonstrate positive impacts on Ontario’s broader forest sector and regional economies – for instance, by creating high-value jobs (often in rural or Northern communities) or by using more provincial wood supply in value-added ways. In short, FSIIP helps companies undertake transformative projects that they might not be able to finance fully on their own, accelerating innovation in the forest industry.

Example: A sawmill might use FSIIP funding to install an automated scanning and optimization system and a new kiln, allowing it to boost lumber recovery and enter new export markets. If the project costs $5 million, FSIIP could provide $1.5 million as a loan, and forgive half of that if the mill meets job creation and production targets. This reduces the risk for the company and encourages deeper investment in modernization.

Why it matters: FSIIP is a key tool in Ontario’s Forest Sector Strategy to drive modernization. By offering substantial support for innovation and expansion, it enables traditional forestry companies to retool with cutting-edge technology and even transition toward bioproducts and other sustainable ventures. The program underscores the province’s commitment to maintaining a competitive, climate-resilient forestry sector that can adapt to changing markets and environmental goals.

Northern Ontario Heritage Fund Corporation (NOHFC)

For forestry businesses located in Northern Ontario, the Northern Ontario Heritage Fund Corporation (NOHFC) is a crucial source of funding. NOHFC administers several programs aimed at stimulating economic development in the North, and it has dedicated streams for business expansion, innovation, and workforce development. Many sawmills, wood product manufacturers, and bioeconomy ventures in Northern Ontario turn to NOHFC for support, as these programs recognize the unique challenges and opportunities of the region.

NOHFC’s Invest North program is particularly relevant, with multiple funding streams for private-sector projects:

• Invest North – Grow: This stream supports the growth and expansion of existing businesses in Northern Ontario. It can help a forestry company that wants to increase production capacity, add a new product line, or upgrade equipment. Funding is available in a few flexible formats:

  • A conditional contribution (grant) of up to 20% of eligible project costs, to a maximum of $400,000. This portion is essentially a grant that may have performance conditions (e.g. job creation).

  • A grant plus loan combination, where up to 20% (max $400k) is grant and an additional loan covers up to 30% of costs (up to $600,000). This mix can provide a significant boost while keeping the outright grant portion capped.

  • A forgivable performance loan of up to 50% of costs (max $1,000,000). The loan is interest-free during the project period (usually a few years), and if the business achieves its committed targets (such as creating a certain number of jobs or reaching investment milestones), a portion of the loan (often 30% of it, up to a certain amount) may be forgiven. The remainder would be repaid on favorable terms.

  Eligibility: Businesses must be in Northern Ontario and ready to undertake a growth project (e.g. building expansion, new machinery, etc.). Applicants should have a history of operations (not startups) and the project should align with economic development goals (creating jobs, boosting exports, etc.). Companies in the forestry sector (sawmills, value-added wood product firms, etc.) are ideal candidates, as long as the project is not simply maintenance or asset replacement but true growth. Projects are evaluated in competitive rounds throughout the year.

  Project Examples: Constructing a new planer mill line to increase a sawmill’s output, or purchasing additional harvesting and processing equipment to expand a wood pellet facility, could be funded through Grow. These investments not only increase capacity but often involve modern technology that improves efficiency and lowers costs. By covering up to half the cost in loans/grants, NOHFC lowers the financial barrier for companies reinvesting in the North.

• Invest North – Innovation: This stream is geared towards research, development, and commercialization of innovative technologies in Northern Ontario. It’s highly relevant for projects at the intersection of forestry and technology – for example, developing a new engineered wood product, piloting a biochar production process, or creating software/hardware tailored to forestry operations.

  • For applied R&D projects (earlier stage innovation, prototype development, etc.), businesses can receive up to 50% of project costs as a conditional contribution, to a maximum of $500,000.

  • For projects that combine R&D with demonstration and commercialization (or even those focused purely on later-stage demonstration/commercial rollout of an innovation), funding can go up to 50% of costs, up to a higher cap of $2,000,000 per project.

  • These contributions are typically non-repayable grants (with conditions), aimed at offsetting the high risk and cost of developing new technology.

  Eligibility: Both private businesses and partnerships between businesses and public research institutions can apply. In fact, collaboration is encouraged – for instance, a lumber company teaming up with a university forestry department to develop a novel bio-based material would be eligible, with the business as the lead applicant. The project must take place in Northern Ontario or benefit the Northern economy, and it should be truly innovative (not just adopting existing tech for internal use, which would be considered more of an internal efficiency upgrade and might not qualify under Innovation). All applicants must be Northern Ontario–based or doing the project in the North.

  Supported Projects: A wide range – examples include developing new bio-products (like turning sawmill waste into biochemical products or bioplastics), creating innovative machinery for forestry operations, or building a pilot plant for a new wood composite material. The costs that can be funded include R&D labour, expert consulting, prototype materials, testing and certification, intellectual property protection, and even marketing studies for the new product. What’s not covered are things like regular operational costs, land purchase, or any activity that is just routine efficiency (the innovation must have broader applicability or market potential). This stream is a powerful catalyst for forestry tech startups or for established companies looking to commercialize a homegrown innovation.

• Workforce and Talent Development: In addition to capital-focused programs, NOHFC also offers funding to grow the skilled workforce in Northern Ontario’s forestry sector. For example, the Workforce Development stream provides grants to employers to hire interns (recent graduates) in Northern Ontario. Within this, the Indigenous Workforce Development Program specifically supports hiring Indigenous interns. A forestry company could get a significant portion of a new graduate’s salary covered for a period (often up to 50% of wages for a 12-month internship, with higher support for Indigenous interns or high-skill roles). This helps businesses build capacity while giving young professionals hands-on experience in forestry management, wood products engineering, etc. Such talent programs indirectly strengthen innovation and sustainability by bringing in fresh skills (for example, an intern might work on a mill’s automation project or help implement new digital tracking of forest inventories).

Why NOHFC matters: The NOHFC has been instrumental in northern communities, where many forestry operations are based. By offering grants and loans tailored to regional needs, it ensures that companies in the North – often far from major markets and facing higher operating costs – are not left behind in the push towards modernization. The combination of capital funding (Grow/Innovation) and talent funding (internships) addresses multiple facets of growth. For instance, a sawmill in Thunder Bay District could get an NOHFC grant/loan to install robotic equipment (automation) through Invest North – Grow, and simultaneously hire an engineering graduate with an NOHFC internship grant to help implement that technology. NOHFC’s programs emphasize job creation, which dovetails with the socioeconomic needs of Northern Ontario, including opportunities for Indigenous communities. Overall, NOHFC is a cornerstone for sustaining and innovating forestry in Ontario’s North, ensuring that regional development and technological progress go hand in hand.

Ontario Forest Biomass Program

Ontario has a strong interest in developing its forest bioeconomy – finding innovative uses for wood fiber, residual biomass, and forest-based waste that can create value while reducing environmental impact. The Ontario Forest Biomass Program (launched in recent years) is a groundbreaking initiative focused on exactly this. It provides funding to a variety of stakeholders to advance the circular and green economy using forest biomass. The program is structured into multiple streams, each targeting a different aspect of biomass innovation and utilization. With a total annual budget that has been around $20 million, this program is a major opportunity for those in the forestry and cleantech space.

The four streams under the Forest Biomass Program include:

• Indigenous Bioeconomy Partnerships (IBP) Stream: This stream supports Indigenous communities and organizations in developing forest biomass opportunities. Projects can range from feasibility studies and business planning to establishing new Indigenous-led enterprises that use forest biomass. The goal is to foster Indigenous participation and leadership in the bioeconomy. Funding: The stream has a dedicated envelope (e.g. $5 million total) and typically offers grants in the range of $100,000 to $500,000 per project. Eligible applicants are Indigenous communities, Indigenous-owned businesses (at least 51% Indigenous-controlled), and partnerships or joint ventures involving Indigenous partners. Projects might include developing an Indigenous-owned pellet plant, conducting a feasibility study for using wood waste to generate community heat and power, forming partnerships to supply biomass for biofuel production, or building capacity through training and skills development in biomass technologies.

• Exploring Biomass Pathways (EBP) Stream: This is aimed at early-stage exploration and feasibility for new biomass uses. It’s open to for-profit or not-for-profit organizations (including startups, research groups, or SMEs) that are in the idea or feasibility phase of a forest biomass project. Funding: Grants are smaller here – often around $50,000 to $200,000 per project – to support things like engineering studies, lab research, or pilot trials. For example, a company might study the viability of extracting biochemicals from sawdust, or test different techniques of producing biochar from forestry residues. By covering some of these upfront R&D costs, the program helps de-risk the exploration of new pathways for using wood that might otherwise be discarded or underutilized.

• Innovative Bioproduct Manufacturing (IBM) Stream: This stream backs projects that are closer to or at commercialization – essentially helping companies deploy new technology or processes to manufacture bioproducts from wood biomass. Eligible projects could be at existing facilities (e.g. a pulp mill adding equipment to produce a bioplastic resin from hemicellulose) or new production lines that consume forest biomass. Funding: This is one of the larger streams, with grants often between $200,000 and $1,000,000 per project. For instance, a company in Ontario that plans to produce bioethanol, renewable natural gas, wood-based chemicals, biodegradable packaging, or other innovative products from forestry by-products could receive significant funding to scale up their operations. The projects must demonstrate realistic prospects of commercialization and typically should be implementing proven innovative technologies (perhaps ones that have been piloted and are ready for scale). It’s about moving from concept to actual product output, integrating forest biomass into new value chains.

• Modernization (MOD) Stream: Traditional forest product facilities (like sawmills, panel board mills, or pellet plants) often need to modernize equipment and processes to remain competitive and to handle more biomass efficiently. The MOD stream provides funds for existing wood product manufacturers to upgrade and modernize, especially in ways that increase the use of forest biomass or improve the efficiency of biomass utilization. Funding: Grants usually range from $100,000 to $500,000 per project under this stream. Projects might include retrofitting a mill to use bark and wood waste as biofuel for heat (reducing fossil fuel use), upgrading to more efficient burners or dryers that can utilize lower-grade biomass, or adding sorting and processing capability to use a wider range of wood fiber (like branch wood, diseased trees, etc.) in products. A key outcome is often that more of each harvested tree is utilized in some product (lumber, energy, pellets, etc.), thereby reducing waste and improving the sustainability of operations.

Eligibility & Impact: Across all streams, the program casts a wide net to engage various participants in the forest sector. It encourages collaboration – many projects might involve partnerships between industry, communities (including Indigenous communities), and research institutions. By targeting everything from concept studies to commercial implementation, the Ontario Forest Biomass Program ensures there is support at each stage of innovation. This is critical in the bioeconomy, where a good idea in the lab needs funding to become a pilot, and then more funding to become a full facility. The program’s focus on forest biomass means it is directly relevant to sawmills (with lots of residues), pulp and paper mills (that can diversify products), new bioenergy ventures, and even tech companies with solutions for turning wood into chemicals or fuels.

From a sustainable growth perspective, this program hits several objectives:

• It helps create new revenue streams for forestry companies (e.g. a mill can sell biomass for energy or new products, not just traditional lumber or pulp).

• It addresses climate change by supporting projects that produce low-carbon products (like renewable energy or materials that displace plastics or coal).

• It encourages Indigenous economic development in forestry, aligning with reconciliation and community growth.

• It finds solutions for underutilized wood (like waste from harvesting or sawmilling, as well as timber from species affected by pests or fire), thereby turning environmental challenges into economic opportunities.

In summary, the Ontario Forest Biomass Program is a comprehensive effort to ignite innovation in Ontario’s forest bioeconomy. Whether you’re an Indigenous entrepreneur planning a biomass venture, a startup with a new conversion technology, or an established mill looking to modernize, this program is a key funding avenue. It exemplifies how Ontario is pushing the forestry sector toward higher value uses and greener technologies, ensuring the sector’s growth is aligned with sustainability goals.

Ontario Together Fund (OTF)

The Ontario Together Fund (OTF) is a special provincial funding program that was introduced during the COVID-19 pandemic and has since evolved to support Ontario’s capacity for innovation and manufacturing resiliency. While not exclusively for the forestry sector, the OTF is notable as an example of Ontario providing targeted grants to businesses for retooling and innovative product development, especially when those projects address urgent provincial needs or strategic industries. Forestry and wood-product companies may tap into this fund if their projects align with its objectives (for instance, if a company pivots to produce something critical for Ontario’s supply chains, or introduces an innovation that benefits public welfare or key economic sectors).

• Purpose and Focus: Initially, the Ontario Together Fund was a $50 million initiative aimed at helping businesses retool their operations to produce personal protective equipment (PPE) and other essential supplies (like ventilators, sanitizers, medical supplies) during the pandemic. It essentially called on companies to come “together” to bolster Ontario’s stockpile of critical items. The fund would financially support those who could adapt their production lines or innovate new solutions for pandemic response. For example, if a pulp and paper mill could modify part of its production to make medical-grade pulp for masks, or a wood products company could manufacture components for hospital equipment, OTF could back that.

  Over time, as immediate COVID-19 pressures eased, the OTF’s mandate broadened to support projects that strengthen Ontario’s domestic supply chain and manufacturing capabilities in strategic areas. This includes life sciences, medical technology, and other sectors where having Ontario-based production is important for resilience. It also has funded some advanced manufacturing upgrades that improve a company’s ability to supply Ontario markets (with a focus on health, safety, and supply security). In essence, OTF became a tool to catalyze innovative manufacturing projects that have public benefit or reduce reliance on imports.

• Funding Provided: The Ontario Together Fund offers grants (non-repayable contributions) to selected projects. The funding intensity has generally been high – often covering a significant portion of project costs. In many cases, OTF grants have covered up to 75% of eligible project expenses, with caps that were around $2 million to $5 million per project depending on the round and priorities. For example, a company might receive a $1 million grant on a $1.3 million project, which is a very generous ratio compared to typical business grants. This high level of support reflects the urgent or strategic importance of the projects funded.

  It’s important to note that OTF has had application intake windows and specific criteria for each round. For instance, one round might call for proposals to build capacity in the biomanufacturing sector (as Ontario did to become a hub for vaccine and pharmaceutical production), while another might focus on technology that improves healthcare delivery or other public needs. Applicants first often fill out a pre-screening form to outline their project and its benefits, and then may be invited to submit a full application.

• Relevance to Forestry Companies: Directly, a sawmill or forest products company is not the typical applicant unless they have a unique angle. However, forestry businesses have diversified in ways that could fit. For example:

  • A wood manufacturing firm could develop wood-based biodegradable packaging or components for medical supplies, reducing plastic use in healthcare – a project that touches both sustainability and health, potentially appealing to OTF.

  • A bio-refinery using forestry biomass might produce a chemical needed in pharmaceuticals or disinfectants; scaling that up could align with provincial interests.

  • During COVID-19, at least one pulp producer in Canada pivoted to make the raw material for medical mask filters. An Ontario company doing similar could have sought OTF support.

  • Also, any automation or technology adoption that significantly improves a manufacturer’s ability to respond to surges in demand (like flexible production lines) might qualify, if framed under provincial resiliency.

  In general, OTF looks for innovative, high-impact projects that provide Ontario with strategic advantages. Forestry companies typically would engage with OTF when they cross over into manufacturing of critical goods or when implementing a novel process that the government sees value in beyond the company itself.

• Example Projects Funded: Some public examples of OTF funding include grants to companies making N95 masks, surgical gowns, testing equipment, or pharmaceuticals in Ontario. In the context of wood/forestry, one hypothetical example could be an engineered wood manufacturer receiving funding to retool part of their facility to produce molded wood-fiber hospital bed trays and cabinetry (replacing plastic equivalents). If that improves infection control (maybe these wood composites are antimicrobial or easily sanitizable) and secures local supply, the province might back it.

Key Takeaway: The Ontario Together Fund demonstrates Ontario’s willingness to invest directly in industry innovation when it serves a broader public need. For businesses in any sector, including forestry, it’s a reminder to watch for special government initiatives that may arise, especially those tied to economic recovery, health, or environmental resilience. OTF grants can be game-changers – they are sizeable and can greatly de-risk a bold project. While competitive and not always open, when they are, forestry companies that can position a project within the fund’s goals should seize the opportunity. Even beyond OTF, this mindset of government-industry partnership for retooling and innovation is something we may see more of as Ontario works to strengthen supply chains and promote domestic production.

Eastern and Southwestern Ontario Development Funds (Regional Development Program)

Ontario’s support for business growth also extends through regional programs. The Eastern Ontario Development Fund (EODF) and Southwestern Ontario Development Fund (SWODF) are companion programs under the province’s Regional Development Program. They provide funding for companies investing in expansion, new facilities, or productivity improvements in those respective regions (Eastern Ontario and Southwestern Ontario). For forestry and wood products companies outside of Northern Ontario, these funds can be a vital source of support – for instance, a sawmill in Eastern Ontario or a furniture/engineered wood manufacturer in the southwest can apply if they meet the criteria.

What these funds offer:

• Loan and Grant Funding for Expansion Projects: EODF/SWODF primarily offer performance-based loans with the possibility of a grant component. Typically, they can fund up to 15% of a project’s eligible costs, with a maximum support of $5 million per project in the form of an interest-free loan. The loan is interest-free during the project period (often up to 4 years while the expansion is being completed and targets are being met). If the company successfully meets its investment and job creation commitments, a portion of that loan can be forgiven, effectively becoming a grant. Commonly, up to 30% of the loan (to a max of $500,000) may be forgiven as a reward for hitting the targets.

  There are also scenarios where a direct grant (non-repayable) is given instead of a loan, but those are limited to specific cases, such as:

  • Smaller rural companies (under 100 employees) may be eligible for a grant up to $500,000 (instead of a loan) for their project, recognizing that a loan might be burdensome for a very small firm.

  • Exceptionally significant investments, like a foreign company choosing to set up a major facility in Ontario or when competing with other jurisdictions, might get a grant up to $1.5 million to tip the scales.

  • Community economic development projects (led by municipalities or economic development orgs to build shared infrastructure) can also receive grants up to $1.5 million (covering up to 50% of those project costs), but that’s more for public-good projects like industrial parks or training centers that benefit businesses broadly.

• Eligibility Requirements: To qualify, businesses must be established (minimum 3 years of operations) and financially stable, and they need to meet minimum project size and job criteria. For instance:

  • A company must be planning to invest at least $500,000 in the project (this minimum drops to $200,000 for projects in rural areas, which covers many smaller towns).

  • The company should have at least 10 full-time employees (or 5 employees if in a rural community), and commit to creating at least 5 new jobs through the project (or a 30% increase in workforce if they had fewer than 15 employees to start).

  • Projects have to be in eligible sectors – and manufacturing (which includes wood and paper product manufacturing) is eligible, whereas sectors like retail, primary agriculture, construction, etc., are excluded. Forestry companies generally qualify as manufacturers of wood, paper, or biomass products.

  • The project should be something that clearly leads to growth: e.g. increasing production capacity, adopting new technology that boosts productivity, launching an innovative product line, or building a new facility or addition. The end results should include not just jobs, but also things like increased exports, new markets, or significant productivity gains.

• Project Examples for Forestry: Suppose an engineered flooring manufacturer in Eastern Ontario wants to expand its plant and install a state-of-the-art automated production line to make a new type of wood flooring. The project will cost $4 million, create 10 new jobs, and double the company’s output for export. Through EODF, the company could be offered a $600,000 interest-free loan (15% of project). If after completion those 10 jobs are indeed created and the investment was fully made, the company might have $180,000 of that loan forgiven (30% forgiveness), only repaying $420,000. This significantly lowers the effective cost of the project. Another example: a pallet manufacturer in Southwestern Ontario investing in new equipment to turn lumber offcuts into wood pellets (diversifying products) could use SWODF support if it meets the job and investment thresholds.

• Benefits of the Funds: These regional funds are highly valuable for small to mid-sized companies that need to make a leap in scale or technology. The forgivable loan setup encourages firms to aim high (create more jobs, invest more of their own money) in order to earn the grant portion. It’s also flexible: if a company prefers not to take a loan, in some cases smaller grants are available, but the mix allows tailoring to a company’s size and situation. The interest-free nature of the loan is effectively a savings too, especially for multi-million dollar projects that would otherwise incur interest costs from banks.

• Application Process: EODF and SWODF have periodic intake periods, and applications are usually reviewed with a regional lens – meaning the government looks at how the project impacts the local economy, not just the individual business. Businesses are advised (and encouraged) to contact regional advisors to discuss their project before applying, to ensure alignment and to strengthen their proposal. Having local support (like a municipality’s endorsement) can also be positive, since these funds are about regional economic development as much as company growth.

Overall Significance: The Eastern and Southwestern Ontario Development Funds round out Ontario’s approach by covering areas of the province not served by NOHFC (which is for the North). Many forestry and wood product companies in southern Ontario operate in rural communities where an expansion can be a big boost to local employment. These funds ensure that whether you’re in Renfrew County or the Ottawa Valley (Eastern), or in Grey-Bruce or the outskirts of London (Southwestern), you have access to provincial support for growth. They align well with objectives of innovation and automation too – since improving productivity is explicitly mentioned, projects often involve new technology or process improvements. For example, a mill installing robotic handling systems or advanced kiln controls as part of an expansion can highlight the innovation and get support. By aiding such investments, Ontario helps its forestry companies become more efficient and globally competitive, leading to sustainable growth.

Other Ontario Initiatives and Supports

Beyond the major programs listed above, there are additional initiatives and resources in Ontario that support forestry sector innovation and sustainable development:

• Centre for Research & Innovation in the Bio-Economy (CRIBE) / Nextfor: CRIBE is an Ontario-funded initiative (based in Thunder Bay) focused on advancing the forest-based bioeconomy. Through its “Nextfor” platform, it brings together industry, researchers, and entrepreneurs to collaborate on forest sector innovation. CRIBE doesn’t offer a straightforward grant program like NOHFC or FSIIP; instead, it often issues calls for proposals for pilot projects or research studies and co-invests in those projects. For example, CRIBE has supported projects turning wood fibers into new materials (like bio-composite auto parts or biodegradable packaging) and helped scale up pilot demonstrations of innovative tech in pulp mills or sawmills. If you’re a company with a cutting-edge idea (say, using nanocellulose from wood pulp in textiles or creating a new engineered wood product), CRIBE can be a partner to provide expertise, connections, and sometimes financial contributions to get pilot projects off the ground. Why it matters: It’s part of the ecosystem that ensures good ideas in Ontario’s forestry sector find a pathway to implementation. CRIBE also helps leverage federal funds and private investment into Ontario projects. Companies engaging with CRIBE can gain access to technical experts and networks (like FPInnovations, a national forest research institute) and participate in challenges or innovation tours that CRIBE organizes. Essentially, while not a direct “grant”, CRIBE is a catalyst and support system for bioeconomy innovation in Ontario.

• Forestry Futures Trust: Ontario’s Forestry Futures Trust is a fund established to support sustainable forest management (like silviculture, reforestation, forest health projects) on Crown lands. While its primary focus is on forest renewal and science (e.g., enhancing forest regeneration, genetic tree improvements, or responding to forest disturbances) rather than on industrial processing, it tangentially supports the industry by ensuring forests remain healthy and productive. In some cases, the Trust has an “Innovation” stream (Enhanced Forest Productivity Science Program) which funds research with potential to improve forest productivity. For instance, studies on climate-resilient tree species or improved inventory technology could be funded. Although this isn’t a program that a sawmill or wood manufacturer would apply to for a grant, it’s an important part of Ontario’s commitment to climate-resilient forestry – ensuring that the raw resource base (the forests) remains sustainable in the long term. Sustainable growth of the forestry sector isn’t just about mills and products; it starts in the forest, and programs like the Forestry Futures Trust invest in that foundation.

• Provincial Forest Access Roads Funding Program: One practical support Ontario provides annually is funding to help forestry companies and local communities build and maintain forest access roads. Harvesting areas in the vast boreal and Great Lakes-St. Lawrence forests often require extensive road networks. The province allocates funding (around $75–$80 million in recent years) to cost-share these road projects with the forestry industry. How it helps innovation and growth: While on the surface it’s maintenance, having reliable road access reduces operating costs for companies, encourages harvesting of timber that might otherwise be uneconomical to reach, and improves the economics of bioenergy projects (since woody biomass can be transported more efficiently). In an indirect way, this supports sustainable growth by enabling better forest utilization and ensuring that remote or smaller mills can get the fibre they need. In the context of climate resilience, well-planned roads also facilitate quick response to forest fires and pest outbreaks, protecting the resource.

• Tax Incentives and Other Supports: Although not a grant, it’s worth noting Ontario (and Canada) provide certain tax incentives that benefit the forestry sector. For instance, there are accelerated capital cost allowance (CCA) rates for clean energy equipment and manufacturing machinery, which many mills can use when they invest in new machinery – this effectively gives a tax break that complements grants or loans. Ontario also has initiatives like the Ontario Job Creation Investment Incentive (provincial paralleling of the federal accelerated depreciation) that encourage companies to invest in productivity-enhancing equipment by deferring taxes. Additionally, programs like the Ontario Immigrant Nominee Program – Employer Job Offer stream can help forestry companies in rural areas fill skilled positions (by fast-tracking immigration for workers), indirectly supporting growth when local labour is scarce.

In summary, Ontario’s landscape of support for the forestry sector is multi-faceted. The province not only hands out direct funding (grants/loans) through programs like FSIIP, NOHFC, and regional funds, but also fosters an innovative environment through research centers (CRIBE/Nextfor), ensures sustainable forest practices via trust funds, and lowers operational barriers through infrastructure funding and tax incentives. For an Ontario forestry business, this means there are numerous avenues to seek assistance depending on the project at hand – whether it’s a high-tech innovation, a mill expansion, workforce training, or ensuring the forest resource remains robust. By leveraging these supports, companies can significantly amplify their capacity for innovation and sustainable growth.

Federal Funding Programs for Forestry Innovation and Sustainability

Forestry companies in Ontario can also tap into a suite of federal funding programs. The Government of Canada, through various departments and agencies, offers programs that align with goals of enhancing competitiveness, advancing clean technology, supporting Indigenous participation, and adapting to market challenges. Importantly, these federal programs apply across Canada, but Ontario-based companies and projects are fully eligible and have been significant beneficiaries. Below, we detail key federal funding opportunities relevant to the forest sector:

Investments in Forest Industry Transformation (IFIT)

Investments in Forest Industry Transformation (IFIT) is a major federal program delivered by Natural Resources Canada specifically targeting the forest sector. Launched over a decade ago and renewed multiple times, IFIT’s mission is to help Canadian forestry companies implement innovative, first-in-kind technologies and create new or diversified revenue streams – especially those that contribute to a low-carbon economy. Essentially, IFIT bridges the gap between the lab or pilot stage and full commercial deployment for breakthrough technologies in the forest industry.

• Funding Type & Scale: IFIT provides non-repayable contributions – in other words, grants – for capital investment projects. It can cover up to 50% of a project’s eligible costs. The funding cap has evolved over different phases of the program. In the latest rounds, IFIT has offered up to $20 million per project for large-scale transformative projects. (Earlier iterations capped at $10 million, but recognizing the rising costs of industrial innovation, the cap was raised to $20 million for broader impact.) Importantly, there is also a stream to ensure smaller companies aren’t left out: “Small Enterprise” projects (for companies with 50 or fewer employees) could get up to $1 million in funding for projects up to $3 million in size. If a small company has a bigger project, they can still apply under the general stream for more than $1M, but the program tried to earmark some support specifically for small players and their modest innovations.

  Additionally, IFIT has at times offered funding for studies related to transformative tech (like engineering studies or feasibility analyses for a potential project), with smaller funding amounts (e.g., up to $100k–$500k for studies). But the marquee part of IFIT is the capital project funding to actually install and start up new technology or processes.

• Eligibility: IFIT is open to for-profit forestry companies in Canada. Applicants must be:

  • Forestry product manufacturers in operation – typically this means you have an existing facility like a mill (sawmill, pulp mill, panel mill, etc.) that produces traditional forest products. OR

  • New entrants who will be building a facility in the forest sector for the purpose of the innovative project. (For example, a startup building a brand new bio-product plant could be eligible even if they don’t have an existing mill, as long as that plant is a forest sector project.)

  Partnerships, joint ventures, or consortiums can apply too, but there must be a for-profit lead recipient. For instance, a consortium of a tech provider + a mill + a forestry community might apply together, with the mill being the lead.

  The project itself must be a **“first-in-Canada” or first-commercial ** implementation of a technology in the forest sector. This doesn’t necessarily mean the tech is absolutely world-first, but it should be novel to Canada and new to the specific facility – not something the company has done before in another mill. It also needs to be beyond research stage: IFIT looks for projects that are “shovel-ready” or “ready-to-build”, meaning the R&D is done, and it’s time to spend on equipment and construction. They actually require that capital expenditures begin by a certain date once approved. Essentially, IFIT likes projects that within a couple of years will be operational and proving out the innovation in a real mill environment.

• Project Examples and Focus: The kinds of projects IFIT loves typically involve transforming wood or pulp into higher-value or new products:

  • Bioenergy and Biofuels: e.g. a mill adding a system to produce renewable natural gas, cellulosic ethanol, or bio-oil from wood residues.

  • Biochemicals and Bioplastics: e.g. extracting lignin from black liquor in a pulp mill and processing it into bio-chemicals or adhesives; or producing a biodegradable plastic from wood fiber.

  • Advanced Materials: e.g. manufacturing nanocrystalline cellulose or filament threads from wood pulp which can be used in automotive, aerospace, or textile industries.

  • New Wood Products: e.g. a engineered wood plant adopting a brand new process to create cross-laminated timber (CLT) panels or modular wood components beyond what’s traditionally done, especially if it’s a first in Canada.

  • Process Innovations: e.g. capturing waste heat or gases from a mill and converting them into energy or chemicals (improving efficiency and reducing emissions).

  The common thread is innovation with impact: the project should improve the mill’s competitiveness and open up a new revenue source (so the company isn’t just relying on traditional lumber or paper sales which can be commodity markets). A side benefit often is environmental: many IFIT projects result in lower greenhouse gas emissions or better utilization of waste (thus aligning with climate objectives).

• Impact in Ontario: Many Ontario companies have successfully leveraged IFIT. For example, projects have included a Thunder Bay area sawmill installing a biogas facility to generate energy from wood waste, a northern pulp mill producing a new type of dissolving pulp for textiles, and a specialty mill making engineered wood for buildings in novel ways. IFIT funding, combined with provincial funding (as seen in the CHAR Technologies example where federal IFIT and provincial FSIIP both contributed), can significantly reduce the financial burden of these cutting-edge projects. By covering up to half the cost, IFIT encourages companies to take the leap on unproven (but promising) technologies that could give Canada’s forest sector a competitive edge globally.

Why IFIT matters: This program is at the heart of Canada’s strategy to move the forestry sector forward from traditional products to a diversified bioeconomy. For Ontario businesses, IFIT offers a chance to be leaders in innovation – it’s basically saying: “Have a great idea to revolutionize your mill? We’ll fund a big chunk of it so you can show the world it works.” The result is a more resilient industry – one that can withstand market downturns in any single product because it has multiple revenue streams, and one that aligns with the clean tech and climate agenda by making more from the same tree (value-added products, energy, etc., with less waste). If you’re a forestry company in Ontario eyeing a bold new venture, IFIT is likely the first federal program to consider. Just remember, it’s competitive (lots of applicants across Canada) and due diligence is high – you need a solid business case, engineering plans, and ideally a pilot success to show before they hand over millions. But the reward is transformative.

Green Construction through Wood (GCWood)

Green Construction through Wood (GCWood) is a federal program aimed at expanding the use of wood in infrastructure and construction projects, particularly in applications where wood hasn’t traditionally been used. Administered by Natural Resources Canada, GCWood is part of Canada’s effort to encourage low-carbon construction and spur demand for innovative wood products (like mass timber) as a way to support the forest sector and reduce greenhouse gas emissions in buildings.

• Program Objective: GCWood’s core goal is to demonstrate and promote innovative wood-based building technologies. This means it provides funding for projects that showcase wood construction in pioneering ways – for example, tall wood buildings, wooden bridges, or mass timber retrofits – and that potentially pave the way for broader adoption of wood in construction codes and practices. The rationale is that construction is a huge market; if more buildings can be built with wood (which stores carbon and often has a lower carbon footprint than steel or concrete), it will significantly boost demand for engineered wood products from Canada’s forestry sector while also helping climate goals.

• Funding Offered: GCWood offers non-repayable contributions (grants) to cover a portion of the costs of these demonstration projects. Typically, it has funded up to 50% of the incremental costs that arise from using wood innovatively (since often it’s cheaper to just do conventional construction, GCWood offsets the extra costs of doing it in wood). There has been a maximum of roughly $1.5 million per project in many cases (often cited as up to $1.45 million). The program had a total envelope of $40–$55 million over a few years, supporting multiple projects across Canada.

  It’s worth noting that GCWood funding was often complemented by other sources (provincial funds, industry contributions, etc.). It was not meant to pay for an entire building, but rather to make the wood aspect feasible and to cover things like design optimization, documentation, and monitoring (so that the project can serve as a learning tool for industry).

• Eligible Projects: The program focused on “demonstration projects”. To be eligible, a project generally needed to:

  • Use advanced wood or mass timber systems in a building or bridge that’s non-traditional. For example, constructing an 8- to 12-storey commercial or residential building using cross-laminated timber (CLT) panels and glulam beams (a “tall wood” building) would qualify, as historically buildings above 6 storeys were rare in wood.

  • Aim for reduced GHG emissions in construction or operation compared to traditional materials. Wood is renewable and stores carbon, so these projects often highlight quantifiable carbon savings.

  • Be at a stage where design is complete or nearly complete and construction can proceed (the program wanted projects that would actually get built in the near term, not just concepts).

  • Share data and results: recipients needed to allow the government to disseminate lessons learned, performance data (like how the wood building performs, costs, etc.), to help change codes and inform future builders.

  Examples of funded projects include: an 12-storey wood tower in Quebec (at the time, one of the tallest), demonstration of wood parking garages, long-span modern wood bridges, or hybrid buildings combining wood with other materials in new ways. In Ontario, one might think of projects like the Brock Commons building in BC (although that’s outside Ontario) or Ontario’s Arbour building in Toronto (a planned tall wood academic building) – these type of projects are the target. If a public or private developer in Ontario wants to build, say, a large arena roof out of engineered wood or a high-rise condo with a mass timber structure, GCWood funding could be the catalyst to help cover engineering and risk mitigation costs to try that out.

• Impact on Forestry Sector: By spurring landmark wood construction projects, GCWood creates new markets for products like CLT, laminated veneer lumber (LVL), glulam beams, and other engineered wood components. Many of these are manufactured in Ontario or elsewhere in Canada. As building codes evolve (for instance, Canada has gradually increased the height allowance for wood buildings, and provinces including Ontario have adopted or piloted these changes), the demand for mass timber is poised to grow. GCWood projects help prove the safety, viability, and advantages of building with wood, effectively marketing the concept through real examples. The result is more architects, engineers, and builders gaining confidence and experience with wood systems, leading to more widespread use. From a forestry company’s perspective, GCWood indirectly benefits them because if more buildings use wood, mills that produce mass timber or glulam will see more orders. It encourages sawmills to consider adding value by producing engineered products, knowing there’s government-backed momentum in that direction.

• Status: The GCWood program was funded in the federal budget for a five-year span (roughly 2018-2023). By March 2023, the original program was scheduled to wrap up after allocating funds to many projects. It achieved its goal of kickstarting a number of high-profile wood builds. While as of 2025 there isn’t a direct “GCWood 2.0” announced yet, the success of these projects means the federal government may consider similar initiatives under its green infrastructure and climate programs. Moreover, some funding for tall wood buildings might continue under broader programs (for example, through the Green Infrastructure fund or the Net Zero Accelerator in SIF for large manufacturing of mass timber).

In summary, GCWood has been a strategic push to open new frontiers for wood usage. Ontario companies involved in producing or constructing with engineered wood have been part of this movement. If you are a developer or a company that wants to undertake an innovative wood construction project, keeping an eye on programs like GCWood or its successors is important. The combination of environmental benefit and the support of domestic forestry makes it an attractive area for government support. For the forestry sector at large, every building that stands as a “wood first” example is a marketing tool that can lead to sustained demand and a stronger narrative about wood’s role in a sustainable economy.

Indigenous Forestry Initiative (IFI)

The Indigenous Forestry Initiative (IFI) is a federal program dedicated to supporting Indigenous participation and leadership in Canada’s forest sector. Administered by Natural Resources Canada (often in collaboration with Indigenous Services or other agencies), the IFI provides funding to Indigenous communities, organizations, and businesses to pursue forestry-related opportunities that foster economic development. This program recognizes that Indigenous peoples are important partners in forestry – as land stewards, rights-holders, entrepreneurs, and workforce – and aims to ensure they have the capacity and resources to fully engage in the sector.

• Funding Details: IFI funding is typically provided as grants (non-repayable contributions). The funding amounts can vary widely depending on the project, but generally they support small-to-medium-sized projects. In past calls, the maximum funding per project has been around $500,000 to $1,000,000, though many projects receive smaller contributions (tens or hundreds of thousands). The program’s total budget in a given period (for example, $13 million over 3 years) is spread across numerous communities and initiatives nationwide.

  IFI will often fund a portion of a project’s costs (e.g., 50-75%), expecting the rest to come from other sources or in-kind contributions. Notably, IFI usually requires that the project has multiple partners or funding sources; they want to see collaboration and broader support. For instance, an Indigenous community might partner with a forestry company or get co-funding from a provincial program or an industry group, and IFI will augment that.

• Eligible Recipients:

  • Indigenous communities and governments (e.g., First Nations band councils, Métis organizations, Inuit community governments).

  • Indigenous-owned businesses and corporations (for-profit or not-for-profit) – generally those that are majority Indigenous-owned or controlled.

  • Indigenous associations or development organizations.

  • Partnerships where an Indigenous entity is a lead or major player (for example, a joint venture between a First Nation economic development corporation and a forestry company could be eligible if the Indigenous side is a primary applicant).

  Non-Indigenous entities can be involved but are not primary recipients; they would need an Indigenous partner leading the application.

• Project Themes: The IFI casts a broad net over “forestry-related economic development,” but typically funded projects fall into one of three categories:

  1. Environmental Stewardship – projects that involve Indigenous communities in activities like forest monitoring, environmental management, and developing forest carbon projects. For example, training a First Nation’s members in wildfire management or supporting a Guardians program for forestlands could get IFI funding.

  2. Use and Management of Forest Resources – this covers initiatives where Indigenous groups actively manage forests or derive economic benefits from forest management. It could include developing a Forest Management Plan for a Indigenous-owned forest, setting up a community forest, or doing inventory and mapping of timber resources on traditional territories to enable future forestry operations.

  3. Forest Bioeconomy and Business Development – which is very relevant to innovation, includes projects like establishing or expanding an Indigenous-owned forestry business (sawmill, harvesting company, value-added wood shop, etc.), or exploring new uses of forest biomass. For instance, a First Nation might get funding to conduct a feasibility study on a wood pellet plant or to train community members in operating a biomass heating system for local buildings. Another example: support for an Indigenous-led startup that makes essential oils or natural health products from forest plants.

  IFI projects often have strong capacity-building components. This might mean training and employing Indigenous community members, or developing governance and business plans for long-term success. The program tends to favor projects that have lasting benefits and can become self-sustaining after the funding.

• Example: In Ontario, an Indigenous community could use IFI funds to develop a business plan and feasibility study for a sawmill on reserve land, including consultations, technical assessments, and partnership development. If successful, this could lead to a new community-owned sawmill that provides jobs and revenue. IFI might fund the early-stage planning and skill development, and then the community could seek additional capital from other programs or investors to build the mill.

  Another example: an Indigenous-owned company might get an IFI grant to purchase and install a wood biomass boiler to provide heat and power to the community, reducing diesel use. The project might include training local operators and using local wood harvest residue, thus building both skills and energy independence.

• Link to Other Programs: IFI often complements other funding. For instance, a project might braid together IFI funds with, say, NOHFC or FedNor funds in Northern Ontario, or with provincial Indigenous economic development grants. The requirement for partnerships means IFI projects sometimes are part of a bigger funding puzzle – IFI can be the piece that targets the Indigenous-specific needs (like community engagement, traditional knowledge integration, or culturally appropriate training), while other funds cover bricks-and-mortar or business ops.

Why IFI matters: The Indigenous Forestry Initiative is key to inclusive growth and reconciliation in the forestry sector. By empowering Indigenous communities and entrepreneurs to take a more active role, it not only creates jobs and prosperity in those communities but also integrates traditional knowledge and local stewardship values into forestry practices, leading to more sustainable outcomes. From an innovation standpoint, Indigenous communities often bring forward innovative ideas especially around bioeconomy (e.g., using forest resources in non-timber ways, or combining cultural knowledge with modern tech for land management). IFI funding can help these ideas materialize.

For forestry companies operating in Ontario, partnering with Indigenous communities is increasingly common – whether through forest tenure arrangements, joint ventures, or employment and training initiatives. IFI can be a resource to support the Indigenous side of those partnerships. For example, if a company and a First Nation jointly develop a value-added wood products facility, IFI might fund the community’s share or the training of Indigenous workers. Such collaboration not only unlocks funding but also strengthens relationships and shared success.

In summary, IFI is a relatively small but crucial program. It highlights the principle that sustainable growth must include Indigenous peoples. As Ontario’s forestry sector grows with innovation and new products, IFI ensures that Indigenous communities are not just observers but active contributors and beneficiaries of that growth.

Strategic Innovation Fund (SIF)

The Strategic Innovation Fund (SIF) is a flagship federal funding program run by Innovation, Science and Economic Development Canada (ISED). SIF is not sector-specific – it’s open to all sectors – but it has supported multiple large projects in the forestry sector. The fund’s main purpose is to encourage significant private-sector investments in innovation, R&D, and industrial transformation in Canada by co-funding those ambitious projects. If a project is big, game-changing, and aligns with government priorities (like innovation, clean growth, or economic benefits), SIF is often the go-to federal tool to help make it happen.

• Funding Structure: SIF typically provides very large contributions to projects, usually as repayable contributions (essentially no-interest loans) or occasionally as non-repayable contributions or a mix, depending on the nature of the project and the negotiation. The amount of funding is substantial – projects must usually have costs in the tens of millions to even be considered, and SIF might cover anywhere from 10% to 50% of the project cost. It’s not unusual to see SIF commitments of $5 million, $10 million, $50 million or more for a single project (the largest SIF projects in other industries have been over $100 million in funding for multi-hundred-million dollar investments).

  SIF has different streams:

  • Stream 1: R&D Projects – for projects focused on research and development that will accelerate technology transfer and commercialization.

  • Stream 2: Firm Expansion and Growth – for projects that facilitate the growth of a company and expansion of facilities, with innovation tied in.

  • Stream 3: Investment Attraction and Reinvestment – to attract new investments to Canada or prevent the loss of projects to other countries.

  • Stream 4: Collaborative Technology Development and Demonstration – for projects involving consortiums and multiple partners (often industry and academia) developing technologies.

  • Additionally, the Net Zero Accelerator (NZA) has been established under SIF to fund large projects that help decarbonize heavy industry and achieve climate targets (this is relevant if, say, a pulp mill is going to implement something dramatically cutting emissions).

  For forestry companies, Streams 2 and 3 have often been relevant (expansion of facilities, and ensuring big investments happen in Canada rather than elsewhere). Also the NZA stream could be relevant for projects like converting a mill’s power plant from fossil fuels to biomass, or carbon capture in pulp mills, etc.

• Eligibility: SIF is aimed at incorporated businesses in Canada. The projects must be “transformative” – meaning they should significantly enhance the company’s productivity, innovation capacity, or move it up the value chain, and ideally have spillover benefits for the broader industry or Canada (like creating a lot of jobs, advancing a key technology area, or anchoring a supply chain in Canada). The applicant needs to be financially credible and capable of carrying out the project (SIF will do due diligence on the company’s finances, management, etc., given the large sums).

  In forestry, potential applicants could be large integrated forestry companies, engineered wood or building product manufacturers, pulp and paper companies, bio-product startups with scaling plans, etc. Even collaborations (e.g., FPInnovations – an industry R&D org – could partner with mills and apply for a consortium project under SIF to pilot something across multiple sites).

• Project Types Supported in Forestry:

  • Mill Modernizations on a Grand Scale: e.g., a pulp and paper company investing $50M to retrofit a mill with new equipment to switch to producing a different product (like dissolving pulp, or recycled pulp, or adding a bio-extraction facility). SIF can fund part of that if it keeps jobs and adds new tech.

  • New Plant Construction: e.g., a company building a brand new engineered wood factory (say a CLT plant or a straw-based fiberboard plant) in Ontario could seek SIF if it’s first-of-kind or significantly innovative and creates a lot of jobs.

  • Clean Tech Adoption: e.g., a large sawmill company implementing an AI-driven optimization across all its mills, or installing electrified dryers and kilns to cut GHG emissions significantly – these sort of projects could fit if they are costly and demonstrate something new for the industry.

  • Bioproduct Scale-Up: e.g., a company moving from pilot to commercial scale for producing bio-jet fuel from forestry residues or producing commercial quantities of nanocellulose could go to SIF for the big capital injection needed.

  • Automation and Industry 4.0: if a project is about turning a traditional mill into a highly automated, data-driven operation that serves as a model for the industry, SIF could back it because it drives productivity leaps and could be replicated elsewhere.

• Funding Example: Let’s say an Ontario-based engineered wood products company proposes a $120 million investment to build North America’s most advanced CLT manufacturing facility, using cutting-edge robotic fabrication and capable of producing ultra-large timber panels for export. The project will create 150 direct jobs and establish a new high-value use for Ontario lumber. The company is competing with a possible U.S. site for this plant. Under SIF, the government might negotiate to provide, for instance, a $30 million repayable contribution (25% of costs). Terms could be such that if the company meets certain performance targets (like jobs maintained, plant operational by X date), they repay, say, $25 million over time and $5 million might be conditionally forgiven or turned into a grant portion as an incentive. This makes Ontario a more attractive location for the company’s investment.

  Another example: A pulp company might get, say, $10 million from SIF to help install a new recovery boiler that significantly reduces emissions and allows extraction of biochemicals – a project that improves environmental performance and adds revenue from biochemicals.

• Why SIF is important: SIF is essentially the heavy hitter – it’s meant for big moves. For the forestry sector, which has some very large firms and also faces capital-intensive transformations, SIF can be the difference that makes a large innovation project feasible. It’s also flexible and can move quicker than some other funding programs because each project is somewhat tailor-made (negotiated contributions). That said, it’s quite competitive and not every project will secure SIF; the project must align with government priorities (in recent years, those include clean growth, digital/automation, and economic recovery/job creation).

From a forestry company’s perspective in Ontario, consider SIF when you have a major project that goes beyond normal operations – something that if not for government support, might not happen or might happen in a smaller way or in another country. Also, consider that SIF funding can often be stacked with provincial funding. For example, an Ontario company might use both SIF and the provincial FSIIP/NOHFC support on one big project (keeping within any stacking limits). This combined approach can drastically lower the cost of transformative projects.

In summary, the Strategic Innovation Fund is about scale and impact. It’s helped keep Canada’s forestry sector competitive by enabling bold moves – new product lines, greener processes, and high-tech upgrades. With climate change and global competition pressures, SIF-backed projects in forestry help ensure the sector remains a source of good jobs and innovation in places like Ontario. If you’re charting a vision of a next-generation forestry facility – be it a super-efficient mill or a revolutionary biofactory – SIF is likely a program you’ll be knocking on the door of.

Strategic Response Fund (SRF)

The Strategic Response Fund (SRF) is a newer federal initiative designed to provide rapid and flexible support to Canadian industries facing significant challenges, such as sudden market disruptions or trade pressures. Announced in recent times with a substantial budget (around $5 billion allocated), the SRF is essentially a financial toolbox the government can deploy to help firms adjust and remain resilient in the face of crises or strategic economic shifts. While it’s not exclusively for forestry, the context of its creation strongly involves sectors like forestry that have been hit with issues like tariffs and trade disputes.

• Purpose: SRF was conceived against a backdrop of events like U.S. tariffs on Canadian exports, global supply chain upheavals, and the need for Canada to respond to protect its industries. For example, the U.S. has imposed tariffs on Canadian softwood lumber on and off for decades, and more recently has applied or threatened tariffs on other wood products and many other goods. These can severely hurt Canadian companies by suddenly making their products more expensive in our largest export market. The SRF is meant to blunt those kinds of shocks. It gives the Canadian government a means to offer financial assistance to companies so they can weather the storm, retain workers, and pivot as needed, rather than go under or slash operations.

• How it Works: The Strategic Response Fund is somewhat unique in that it’s not a continuously open “apply here for this much” program. Instead, it’s a flexible fund that the government can use in targeted ways. For instance, if a particular region or sector is being hammered by tariffs or a global downturn, the government could roll out an SRF initiative for that scenario. The support might take the form of loans, loan guarantees, or even grants or contributions, depending on need. Terms can be quite custom – “flexible terms” implies that the government can set repayment schedules or interest in a way that suits the situation.

  In the case of forestry, imagine a scenario: The U.S. raises lumber tariffs to very high levels unexpectedly, and demand drops. Mills start stockpiling lumber, prices fall, and cash flow dries up. The SRF could be activated to provide bridge financing or emergency loans to lumber producers so they can keep operating and avoid layoffs while the government works out a trade resolution. Or the SRF might give money to help companies diversify markets (e.g., funding to support finding new overseas customers, or to retool mills to make different products less reliant on the U.S. market).

• Eligibility & Access: Because SRF is a broad mechanism, eligibility would depend on the specific deployment. But generally, it targets firms in strategic sectors that are highly impacted by external shocks. Forestry is explicitly identified as a strategic sector for Canada (given its importance to exports and rural economies). Other sectors could include automotive, steel/aluminum, agriculture – basically any that face tariff wars or global challenges.

  Accessing SRF likely involves the government proactively reaching out via announcements like, “Companies in X sector can apply for relief via SRF – here’s the process.” Companies would then show their need (impact of the issue on them) and a plan for how support would help them adapt or get through it.

• Types of Support for Forestry via SRF:

  • Working Capital Loans: to help with cash flow if revenues are hit by tariffs or sudden price drops.

  • Investment Support: for instance, if companies decide they need to pivot to new markets (maybe produce different dimensions of lumber for Asia, or new value-added products to escape tariffs), SRF might help fund the required upgrades or marketing initiatives.

  • Job Protection Funding: Possibly similar to how some COVID programs worked, SRF could in theory subsidize wages or provide credit so that mills can avoid layoffs during a slump.

  • Trade Legal Fund: It could even help industry associations fund legal challenges or adjust to new regulations etc., although that might be done through other channels.

• Strategic Angle: The use of “Strategic” implies this fund is used not just as a bailout, but to encourage companies to make changes that strengthen them long-term. For forestry, that could mean investing in value-added manufacturing, automation, or moving up the product chain as a response to challenges (which aligns with innovation and sustainable growth goals). If a certain product faces tariffs, the strategy might be to produce something else from the wood that is tariff-free or in higher demand domestically. SRF might help finance that transition.

• Complement to Other Programs: The SRF is like a safety net complementing programs like SIF or IFIT. While SIF/IFIT are more planned and innovation-oriented, SRF is reactionary and resilience-oriented. A company could potentially benefit from both – for example, use SRF to handle the immediate financial crunch of a tariff, and use SIF to invest in a new production line that lessens reliance on the tariffed product in the future.

Why SRF matters to Ontario forestry: Ontario’s forestry companies, especially lumber producers, have long dealt with the volatility of the U.S. trade environment. The SRF indicates that the federal government stands ready to intervene and assist if things take a dire turn, thereby instilling some confidence. Knowing that such support exists might also encourage companies to keep investing in innovation even in risky times, since they have a backstop if the market goes awry due to politics or global events. It’s part of building a climate of resilience.

From a broader perspective, the SRF underscores the importance of adaptability. Funding from SRF could be used by forestry firms to implement measures that diversify their markets or product mix – a sustainable growth strategy to not have “all eggs in one basket”. It also can be seen as promoting climate-resilient forestry in an economic sense: climate change can cause unexpected impacts (fires, supply issues, etc.) and global markets can swing; SRF helps firms adapt to sudden changes, ensuring the sector can continue providing jobs and economic value despite external shocks.

Other Federal Support Programs and Resources

In addition to the big-ticket programs above, there are several other federal initiatives that forestry and biomass companies in Ontario should be aware of:

• Sustainable Development Technology Canada (SDTC): SDTC is a federally-funded foundation that provides grants to cleantech projects across Canada. Many forestry-related innovations, particularly those that have environmental benefits, can fall under cleantech. SDTC has programs like the SD Tech Fund for earlier-stage technology demonstration and the SDTC Scale-Up Fund for helping companies grow. For example, a company developing a novel bioenergy process or a biochar filtration product or a more efficient sawmill waste-to-energy system could apply to SDTC. Typically, SDTC will fund up to about 33% (one-third) of project costs, and their contributions often range from a few hundred thousand up to a few million dollars. The goal is to get new clean technologies through the pilot or demo stage and ready for market. An Ontario biochar startup could, for instance, get SDTC support to build a pilot plant and prove their product’s viability for soil remediation or water treatment. SDTC funding pairs well with IFIT or provincial innovation funds if the project has both economic and environmental outcomes.

• NRC Industrial Research Assistance Program (IRAP): IRAP is aimed at small and medium-sized enterprises (SMEs) in Canada that are pursuing technology innovation. If you’re an SME in the forestry sector working on something innovative (perhaps developing new software for mill optimization, or designing a prototype machinery, or creating a new value-added wood product), IRAP can provide advisory services and funding for R&D salaries and contractor costs. IRAP funding can cover a significant portion of the costs to hire technical expertise or conduct research activities, often in the tens of thousands up to a few hundred thousand dollars per project. For example, an Ontario forestry equipment company could use IRAP to hire engineers to develop a sensor system for detecting log defects, or a company could get funding to collaborate with a university on testing a new pulp fiber application. IRAP is known for being relatively accessible and flexible for SMEs, and it’s a great way to undertake incremental innovation or early-stage development without bearing the full cost.

• Federal Regional Development Agencies (RDAs): Ontario is served by two RDAs – FedNor for Northern Ontario and FedDev Ontario for Southern Ontario. These agencies have various programs under the banner of the Regional Economic Growth through Innovation (REGI) initiative, among others. They often provide business expansion loans or contributions (sometimes repayable, sometimes partially repayable) similar to provincial funds, but using federal dollars. For instance:

  • FedNor: Has programs to assist Northern businesses with scale-up, often focusing on projects that diversify the northern economy or bring new technology. A forestry business in Northern Ontario might get FedNor support for purchasing new equipment or expanding a facility, complementing what they get from NOHFC. FedNor also funds community and innovation projects (like research centres, incubators, etc., including ones focused on forestry tech).

  • FedDev Ontario: Covers Eastern and Southwestern Ontario (as well as central/southern). One of its known programs is the Business Scale-up and Productivity (BSP) program which offers repayable funding (essentially interest-free loans) to high-growth companies adopting new technologies or expanding. For example, a wood-products manufacturer in Eastern Ontario could secure a FedDev BSP loan to automate its production line or to set up an e-commerce system to reach new markets. These loans can cover up to 35% of project costs and often range from $500k to a few million.

  The RDAs also supported some forestry innovation clusters; for example, FedNor has invested in the Centre of Excellence for Next Generation Forestry (related to CRIBE) and FedDev has supported wood-related initiatives in Southern Ontario.

• Export Development and Marketing Programs: While not direct grants to fund a project build, programs like the CanExport program (through Global Affairs Canada and Trade Commissioner Service) provide grants to companies for marketing and business development in new export markets. A wood products firm in Ontario looking to expand sales to Asia or Europe could get some costs covered for trade shows, marketing material, or market research in those new markets. Given how export-heavy forestry is, these supports can be important for diversification efforts.

• Workforce and Training Programs: The federal government also has programs to subsidize training or hiring which forestry companies can use. For example, the Canada Job Grant (administered jointly with provinces) can subsidize costs of training employees on new machinery or processes (which is very useful when a company adopts automation – they can get funding to retrain workers for higher-skilled roles). Additionally, there are youth employment programs like Science and Technology Internship Program (STIP) Green Jobs in Natural Resources which give grants to hire young interns in forestry and clean tech roles (similar to NOHFC’s internships but on a national scale).

• Scientific Research and Experimental Development (SR&ED) Tax Credit: Not a direct program one applies to, but worth a mention – companies engaging in R&D (like developing new products or processes in the forest sector) can often get a sizable portion of their R&D costs back through this federal tax credit. It’s effectively money back at tax time for doing experimental development. When planning innovation projects, companies often budget with SR&ED in mind as an additional “funding” source (after-the-fact).

Each of these additional supports plays a role in the ecosystem. A savvy Ontario forestry company might patch together multiple sources: for example, use IRAP to do initial research, then IFIT to scale up the tech, SDTC to focus on the environmental aspect, NOHFC for regional support, and SIF for a massive commercialization push – and then SR&ED for any R&D along the way, plus CanExport to sell the new product abroad. While it’s a lot of work to manage multiple funding streams, the payoff can be huge, essentially leveraging public funds to accelerate growth and innovation that the company might not afford on its own timeline.

Conclusion

Ontario’s forestry sector stands at the intersection of tradition and innovation, with deep roots in resource communities and new branches extending into bioeconomy, advanced manufacturing, and sustainable development. The array of funding programs available – provincial and federal – reflects the importance of this sector and the commitment to its future.

In Ontario, provincial programs like FSIIP, NOHFC, the Forest Biomass Program, and regional development funds specifically encourage companies to invest in modernization, automation, and product innovation. They help de-risk big moves such as building a new mill addition, launching a biofuel line, or implementing cutting-edge AI in a sawmill. Provincial support has also prioritized Indigenous inclusion and workforce development, ensuring that growth is inclusive and that skilled talent is nurtured (through internships and training incentives). The province’s focus on biomass utilization and innovation (e.g., through the Forest Biomass Action Plan and related funding) shows a clear strategy to make the most of every tree – turning waste into opportunity and reducing environmental impact.

At the federal level, programs like IFIT and GCWood have nationally championed the move towards a diversified, high-value forest sector – one that produces not just lumber and paper, but also green energy, biochemical products, and climate-friendly building materials. The federal funding landscape encourages the sector to be bold: to pilot first-in-Canada technologies, to construct skyscrapers out of timber, and to bring Indigenous communities to the economic forefront. Meanwhile, broad initiatives like SIF and the Strategic Response Fund ensure that when companies scale up innovative ideas or face headwinds beyond their control, there’s support to keep the momentum and protect the foundations of the industry.

As the forestry sector continues to evolve – dealing with challenges from climate change (fires, pests) and market volatility, but also seizing opportunities in mass timber construction, bioenergy, and advanced materials – these funding programs provide the capital and confidence to drive progress. They are helping transform Ontario’s forestry industry into one that is innovative, diversified, and sustainable for the long term.

For companies in the sector, the key takeaway is that you are not alone in your growth journey: government partners are actively investing in the future of forestry. By leveraging these grants and funding programs, you can accelerate your projects, reduce financial risk, and amplify your impact. Whether you’re a sawmill upgrading to state-of-the-art automation, a startup turning wood waste into green chemicals, or an Indigenous community developing a forestry venture, there’s likely a program (or combination of them) that fits your needs.

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.