Innovative Solutions Canada — Challenge Stream for innovators

Q: What is the deadline to apply?

The program is accepting continuous intake

Q: Who is eligible for the Innovative Solutions Canada — Challenge Stream for innovators program?

To be eligible for the Innovative Solutions Canada — Challenge Stream for innovators program, you must: • Be a for-profit business incorporated in Canada • Have 499 or fewer full-time equivalent employees • Conduct R&D activities within Canada

Q: Who can I contact for more information about the Innovative Solutions Canada — Challenge Stream for innovators?

You can contact Innovation, Science and Economic Development Canada (ISED).

Q: Where is the Innovative Solutions Canada — Challenge Stream for innovators available?

The Innovative Solutions Canada — Challenge Stream for innovators program is available across Canada.

Q: Are startups eligible for the Innovative Solutions Canada — Challenge Stream for innovators program?

Yes, startups are eligible to apply for the Innovative Solutions Canada — Challenge Stream for innovators program.

Last Update: August 20, 2025

Canada

Supports Canadian SMEs developing innovative solutions for government challenges

At a glance

Eligible Funding

Max. $2,000,000

Timeline

Unspecified

Financing Type

Grant and Funding

Eligible Industries

All industries

Funds Providers

Innovation, Science and Economic Development Canada

Program status

Open

Overview

The Innovative Solutions Canada — Challenge Stream offers Canadian small and medium for-profit businesses up to $2 million in funding to develop and test innovative solutions addressing government-identified challenges. Eligible activities include feasibility studies, prototype development, and commercialization support for market-ready innovations.

Financing terms and conditions

Phase 1 funding of up to $150,000 for a proof of feasibility report over a maximum of six months; in some cases, funding may reach up to $300,000.
Phase 2 funding of up to $1 million for prototype development and testing over a maximum period of two years; in select instances, funding may reach up to $2 million.

Activities funded

Development and demonstration of innovative solutions addressing specific challenges faced by government organizations.
Creation of proof of feasibility reports for early-stage innovations.
Design, building, and testing of late-stage prototypes for innovative products or technologies.
Commercialization of market-ready solutions developed through the program.

Eligibility

The applicant must be a for-profit business incorporated in Canada, either federally or provincially.
The company must have 499 or fewer full-time equivalent employees, including those of affiliated companies.
At least 50% of annual wages, salaries, and fees must be allocated to employees and contractors who spend the majority of their time working in Canada.
50% or more of full-time employees must have Canada as their ordinary place of work.
50% or more of senior executives (vice-president level and above) must have Canada as their principal residence.

Who is eligible?

Canadian small businesses
Canadian medium-sized businesses

Who is not eligible

Non-Canadian businesses.
Non-incorporated entities (such as sole proprietorships and partnerships).
Non-profit organizations.
Businesses with more than 499 full-time equivalent employees (including affiliated businesses).

Eligible expenses

Funding to develop a proof of feasibility report.
Funding to build and test a prototype.

Eligible geographic areas

Businesses incorporated in Canada, either federally or provincially.

Selection criteria

Self-assessment of the solution based on the Technology Maturity Level (TML) Scale to determine the eligibility stage (TML 1-4 for phase 1, TML 5-9 for phase 2).
Development of a report demonstrating the scientific, technical, and commercial value of the solution during the feasibility proof phase.
Evaluation of the prototype during the development and testing phase, including the ability to effectively develop and test the innovation.

How to apply

Review program documentation

Read the official supporting documents related to the grant
Understand the application process and challenge stream details
Review funding opportunities currently available

Confirm eligibility

Verify that your business meets all eligibility requirements
Ensure compliance with criteria for company size, incorporation, and R&D location
Check employment and executive residency status

Select a challenge

Read each challenge carefully for specific requirements and deadlines
Consider timelines and maximum eligible funding for each challenge
Identify suitable challenges aligning with your expertise

Complete TRL self-assessment

Complete a self-assessment using the Technology Readiness Level (TRL) scale
Determine which phase (1 or 2) your solution applies to

Submit application

Prepare and submit the required application and documentation
Provide detailed information according to the specific challenge requirements

Wait for evaluation results

Await screening and evaluation of your application by the review committee
Be prepared for further information requests or clarification

Additional information

Innovators retain ownership of any intellectual property (IP) developed during the process.
Market-ready innovations may be eligible for inclusion in a federal purchasing list for up to three years.
Each challenge may outline distinct completion timelines and specify varying funding amounts.
Applicants are encouraged to subscribe to updates if no relevant funding opportunity is currently available.

Apply to this program

Frequently Asked Questions about the Innovative Solutions Canada — Challenge Stream for innovators Program

Here are answers to the most common questions about the Innovative Solutions Canada — Challenge Stream for innovators. This section explains what the program is, how much funding is available, eligibility requirements, application deadlines, and other important details to help you determine if this grant is right for your business.