Overview: Why Ontario plastic manufacturers should use grants in 2026
Ontario hosts one of Canada’s largest plastics ecosystems, spanning injection molding, extrusion (film, sheet, pipe, profile), thermoforming, blow molding, rotational molding, and compounding. In 2026, grants for plastic manufacturing in Ontario emphasize advanced manufacturing, automation, Industry 4.0, decarbonization, recycling, circular packaging, export market development, and workforce upskilling. Programs range from non-repayable contributions and cost-sharing grants to repayable funding and tax incentives. Whether you operate in the GTA, Windsor–Essex, Kitchener–Waterloo, London, Hamilton, Niagara, Ottawa, or Northern Ontario, targeted funding can accelerate plant expansion, robotics integration, energy efficiency retrofits, and R&D for new polymers, additives, and bioplastics. This guide outlines key programs and practical steps to combine SR&ED tax credits, IRAP support, FedDev Ontario instruments, and provincial funding streams such as AMIC, EODF, and SWODF.
Funding categories for plastics processing projects
Plastic manufacturers can align projects with distinct funding themes to increase eligibility and scoring:
- Advanced manufacturing and automation: automation grants for Ontario manufacturers, robotics funding for plastics, machine vision and cobot integration, MES/ERP and digital twin adoption, cybersecurity upgrades, and Industry 4.0 funding.
- Energy efficiency and decarbonization: energy efficiency grants for manufacturing in Ontario, IESO Save on Energy incentives, NRCan industrial efficiency, process cooling and chiller upgrades, VFDs, compressed air systems, and industrial heat recovery.
- Circular economy and recycling: plastics recycling grants, zero plastic waste funding, recycled content packaging lines, PET and HDPE/PP recycling infrastructure, design for recyclability, and LCA (life cycle assessment) funding.
- Productivity and competitiveness: lean manufacturing grants, continuous improvement funding, equipment upgrade grants, and capital investment support for plant optimization and brownfield modernization.
- Export and market development: export grants for Ontario manufacturers (e.g., CanExport SMEs), trade show funding, and export marketing assistance for plastics packaging companies.
- Workforce development: training grants for Ontario manufacturing, Canada-Ontario Job Grant (COJG), apprenticeship incentives for moldmakers and process technicians, and safety training grants.
- Research, development, and innovation: SR&ED tax credit for plastics R&D, IRAP funding for prototyping, NSERC Alliance and Mitacs Accelerate for collaborative projects, OCI Voucher for Innovation and Productivity (VIP), and NGen challenge projects.
Federal program landscape relevant to plastics
SR&ED tax credit for plastics R&D
The SR&ED tax credit remains foundational for Ontario plastics firms developing new materials, tooling strategies, hot runner systems, process recipes, or AI-driven defect detection. Typical activities include rheology testing, cycle time optimization, new resin/additive formulations, mold design innovation, and automation software trials. Combining SR&ED with grants is common; stacking limits require careful planning to avoid overfunding the same cost base.
IRAP funding (NRC) for plastics prototyping and innovation
IRAP supports SMEs pursuing technology development, prototyping, and commercialization, often complementing SR&ED by funding earlier-stage engineering, controls, and testing. Plastics use cases include machine vision for flash detection, cobot tending of presses, advanced process monitoring, predictive maintenance, and biopolymer processing. Consider IRAP when the project has measurable technical risk and an innovation roadmap.
FedDev Ontario: Business Scale-up and Productivity (BSP)
BSP assists high-growth manufacturers with scale-up, equipment acquisition, process modernization, and market expansion. For plastics, eligible costs may include all-electric injection molding machines, high-efficiency extrusion lines, tooling and automation, and ERP/MES deployment. BSP is typically repayable but can unlock transformative CAPEX, especially for export-oriented productivity improvement.
Strategic Innovation Fund (SIF) and SDTC for cleantech plastics
Larger transformation projects in decarbonization, recycling infrastructure, circular packaging, and bioplastics may align with SIF or Sustainable Development Technology Canada (SDTC) for clean technology demonstration and scale-up. Plastics firms exploring biodegradable materials, low-carbon resin processing, industrial electrification, or chemical recycling should evaluate these streams.
CanExport SMEs for market development
For plastics packaging, components, or tooling businesses seeking new markets, CanExport SMEs supports export marketing, trade show participation, and market entry studies. Stack with EDC export financing for a complete go-to-market toolkit.
Provincial and regional Ontario programs
Advanced Manufacturing and Innovation Competitiveness (AMIC) stream
AMIC targets Ontario manufacturers undertaking productivity, innovation, and competitiveness projects. Plastics applicants often propose automation integration grants, robotics funding, machine vision, mold tooling, and digital transformation grants (MES/ERP). Strong cases demonstrate job creation, export growth, and technology adoption that lifts the regional supply chain.
Eastern Ontario Development Fund (EODF) and Southwestern Ontario Development Fund (SWODF)
EODF and SWODF provide cost-sharing to spur investment, expansion, and productivity in defined regions. Injection molding modernization grants, extrusion equipment funding, thermoforming oven upgrades, and plant expansion grants are common plastics use cases. Emphasize timelines, private investment leverage, and community impact.
Northern Ontario: FedNor and Northern Ontario Heritage Fund
For Sudbury, North Bay, Sault Ste. Marie, and Thunder Bay, FedNor and the Northern Ontario Heritage Fund Corporation (NOHFC) can support capital investment grants, hiring and training incentives, and productivity projects. Plastics manufacturers in Northern Ontario should align proposals with regional diversification and skilled jobs.
Ontario Centre of Innovation (OCI) and NGen challenge projects
OCI’s Voucher for Innovation and Productivity (VIP) helps SMEs collaborate with Ontario universities and colleges on applied research, including biopolymers, additives and masterbatch R&D, digital twin modeling, and AI defect detection. NGen (Next Generation Manufacturing) funds collaborative advanced manufacturing initiatives; plastics automation, robotics end-of-arm tooling, and smart factory pilots are common themes.
Workforce: Canada-Ontario Job Grant (COJG)
COJG supports upskilling grants for Ontario manufacturing, including process technician training, scientific molding, safety training, and maintenance of robotics and PLCs. Firms can also leverage apprenticeship incentives for moldmakers and industrial electricians.
Energy efficiency, electrification, and decarbonization incentives
IESO Save on Energy industrial incentives
IESO offers industrial retrofit incentives for variable frequency drives, compressed air leak remediation, process cooling and chiller upgrades, heat recovery, industrial lighting, and demand control ventilation. Plastics plants can claim incentives on high-load assets like injection presses, extruders, vacuum pumps, resin dryers, and cooling towers.
Natural Resources Canada (NRCan) programs
NRCan supports industrial energy efficiency incentives, energy audits, and low-carbon retrofits. For plastics, typical measures include electrification of process heating, boiler replacement with industrial heat pumps, power factor correction, and peak demand management—key steps for greenhouse gas reduction funding.
Combining facility and process upgrades
Stacking facility retrofits (lighting, HVAC, ventilation) with process-side upgrades (all-electric presses, hot runner system funding, optimized chillers, and MES-driven energy monitoring) can increase total incentive value while boosting throughput and quality. Document baseline energy intensity (kWh/kg) and expected reductions to strengthen business cases.
Circular economy and recycling funding for plastics
Recycling equipment and infrastructure
Ontario plastics recycling grants support PET bottle-to-bottle systems, HDPE/PP flake washing lines, film reclamation, and resin compounding with recycled content. Projects can also target EPR (extended producer responsibility) readiness, including proof-of-recycled-content verification and design for recyclability grants.
Circular packaging and eco-design
Programs encourage recycled content packaging, reusable formats, and design changes that improve sortation and yield. Life cycle assessment funding (LCA) can evaluate cradle-to-cradle impacts. Plastics manufacturers offering tooling, film/sheet extrusion, and thermoforming can align with retailer and CPG mandates for recycled content.
Waste reduction and zero plastic waste
Waste diversion funding supports scrap reduction, in-line regrind systems, and closed-loop reuse. Combine lean/6-sigma grants with process analytics to minimize purge, shorten changeover, and reduce defects.
Digital transformation and Industry 4.0
MES/ERP, digital twin, and AI adoption
Ontario manufacturers can access digital transformation grants to deploy MES/ERP, machine connectivity, digital twins, and AI for predictive quality. Plastics use cases include cycle time optimization, clamp force monitoring, process window enforcement, and automated SPC dashboards for PP, HDPE, PET, and PVC.
Automation integration, robotics, and machine vision
Funding supports cobots tending injection molding machines, robotic take-out with end-of-arm tooling, and machine vision grants for quality inspection. Profile and pipe extrusion lines benefit from in-line dimensioning and surface defect detection; thermoforming gains from oven profile controls and closed-loop thickness measurement.
Cybersecurity and data infrastructure
With connected equipment, cybersecurity grants help fund network segmentation, MFA, backups, and incident response plans—often prerequisites in program guidelines. Include risk assessments and training as eligible costs.
Export growth and market diversification
CanExport SMEs and trade missions
Plastics businesses expanding to the U.S., Mexico, or EU markets can use CanExport funding for market research, translation, regulatory consulting, and trade show participation. Pair with EDC insurance and financing to de-risk receivables and working capital as orders scale.
City and regional opportunities
Some municipalities and regional bodies (e.g., Toronto, Mississauga, Brampton, Vaughan, Hamilton, Kitchener–Waterloo, London, Windsor–Essex, Niagara, Ottawa) periodically offer manufacturing support programs. Monitor local calls for proposals to complement provincial and federal funding.
Workforce development and safety
Canada-Ontario Job Grant and apprenticeship incentives
Training grants for injection molding, extrusion operations, scientific molding, robotics programming, and safety (lockout/tagout, machine guarding) help address skill gaps. Wage subsidies and newcomer hiring incentives can support recruitment for technicians, setters, toolmakers, and quality specialists.
ISO and continuous improvement
ISO certification funding and lean/6-sigma grants build capacity for export, automotive, and medical markets. Productivity and competitiveness funding supports SMED setups, mold change standardization, and maintenance best practices.
Regional snapshots: tailoring applications by location
- GTA (Toronto, Mississauga, Brampton, Vaughan, Markham, Oakville, Burlington): strong export focus, access to AMIC and IESO incentives, frequent CanExport use.
- Hamilton–Niagara: logistics advantages for packaging and recycling infrastructure funding.
- Kitchener–Waterloo–Cambridge–Guelph: Industry 4.0 grants, OCI VIP collaborations, and NGen projects.
- London–Sarnia: petrochemicals, process cooling incentives, and decarbonization funding.
- Windsor–Essex: OVIN supply chain and automotive plastics opportunities, robotics funding.
- Eastern Ontario (Kingston, Ottawa, Peterborough–Kawarthas): EODF and export growth.
- Northern Ontario (Sudbury, Thunder Bay, Sault Ste. Marie, North Bay): FedNor, NOHFC, and workforce supports.
Eligibility criteria and cost-sharing norms
Common eligibility themes include:
- For-profit incorporation in Ontario and good standing.
- Project fit with program objectives (innovation, productivity, exports, jobs, decarbonization, circular economy).
- Minimum project size and cash contribution; cost-sharing ratios vary (e.g., 35–50% typical for many grants; higher for training).
- Clear budgets, milestones, and measurable KPIs (throughput, scrap reduction, kWh/kg, export sales).
- Evidence of financing for the applicant share (e.g., cash on hand, BDC financing).
Note: Programs prohibit retroactive costs before approval. Maintain separate cost tracking and avoid double-claiming the same expenses across grants and tax credits.
Building a strong application: documentation and KPIs
Successful applications provide:
- A detailed project plan: scope, Gantt chart, procurement, commissioning.
- Technical rationale: how the upgrade (e.g., all-electric press) improves cycle time, energy intensity, and quality.
- Baseline and targets: current OEE, scrap rate, energy use; projected improvements.
- Risk management: supply chain, integration, cybersecurity, training.
- Economic impact: jobs created/retained, export growth, supplier development, regional benefits.
- Environmental metrics: GHG reduction, waste diversion, recycled content volumes, water savings.
Stacking SR&ED, grants, and incentives
A common approach:
1. Use non-repayable grants for new equipment, automation integration grants, or training.
2. Layer IESO/NRCan incentives for energy efficiency measures (VFDs, chillers, compressed air).
3. Claim SR&ED on experimental development and process innovation not reimbursed by grants.
4. Consider repayable options (e.g., BSP) for scale-up beyond grant caps.
Track stacking limits and ensure the combined public funding does not exceed permitted thresholds.
Typical timelines and milestones
- Discovery and eligibility check: 1–3 weeks.
- Application preparation: 3–6 weeks (technical, financial, letters of support).
- Government review: 6–20+ weeks, depending on program and intake.
- Project window: often 12–36 months, with milestone reporting and claims.
Start early, align equipment delivery schedules with approval, and keep documentation for audits.
Sector-specific examples
- Injection molding: press upgrade grants, hot runner retrofits, servo drives, machine vision for short shots, robot take-out and packaging automation.
- Extrusion: film/sheet extrusion modernization, die upgrades for pipe/profile, in-line thickness and dimension control, high-efficiency motors, and chillers.
- Thermoforming: oven upgrade grants, IR zoning controls, scrap reduction via nesting software.
- Recycling: PET bottle-to-bottle lines, HDPE/PP wash lines, sorting automation, and LCA-supported packaging redesign with recycled content.
- Compounding: dosing automation, dust collection efficiency, and additive/masterbatch R&D.
Compliance, reporting, and claim management
Maintain vendor quotes, purchase orders, invoices, proof of payment, and commissioning reports. For energy incentives, include before/after measurements and engineering calculations. For training, retain curricula, attendance, and outcomes. For R&D, keep contemporaneous logs, test plans, and results supporting SR&ED narratives.
Conclusion: Turning funding into measurable results
Ontario plastic manufacturers can combine grants, tax credits, and incentives to modernize plants, reduce emissions, and expand exports. By aligning projects with program objectives—advanced manufacturing, energy efficiency, circular economy, workforce development, and innovation—organizations can secure cost-sharing that accelerates ROI. A disciplined approach to eligibility, documentation, stacking, and KPIs improves success rates and ensures funding translates into sustained competitiveness across Ontario’s plastics sector.
