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Innovative Solutions Canada - Challenge Stream for innovators - Canada
Open
Source verified July 23, 2026

Innovative Solutions Canada - Challenge Stream for innovators

Supports Canadian SMEs developing solutions for federal challenges
Offered by
Innovation, Science and Economic Development Canada (ISED)
Official source: ised-isde.canada.ca
Funding available
$ 2,000,000
Deadline
Open continuously
Location
Canada
Who can apply

Canadian small and medium-sized businesses

See full eligibility

Overview

Innovative Solutions Canada supports Canadian small and medium-sized businesses with funding of up to $2M to develop early-stage innovations for federal challenges. Eligible work includes market studies, proof of feasibility, prototype development, and testing in simulated or real operational environments.
/100
Opportunity Score
Moderate potential, but conditions must align.

At a glance

Funding available

Financing goals
  • Increase performance through digital transformation
  • Develop a new product or service
  • Conduct research and development activities
Eligible Funding
  • Maximum amount : 2,000,000 $
Funds Providers

Eligible candidates

Eligible Industries
  • All industries
Location
  • Canada
Legal structures
  • For-profit business
Annual revenue
  • All revenue ranges
Organisation size
  • 499 employees maximum
Audience
  • Canadians
  • Startups

Next Steps

1
Determine your project
2
Validate your eligibility

Activities funded

  • Phase 1: market studies to validate commercialization potential, including competitive analysis
  • Phase 1: activities directly related to demonstrating the technical and scientific merit and feasibility of the innovative technology or solution
  • Phase 1: testing a basic product or process in a simulated environment
  • Phase 2: developing a working prototype, integrating components for testing, and testing or demonstrating the prototype in a simulated or real operational environment
  • Phase 2: getting the technology ready for commercialization

Official resources

Official page

challenges

Program guide

Challenge Stream - Phases 1 and 2

Grant Instructions and Procedures - Call 004

Eligibility

Who is eligible?

  • Canadian small and medium-sized businesses

Eligible expenses

  • Salary costs
  • Contractor’s fees and sub-contracts
  • Travel costs in accordance with the National Joint Council Travel Directive
  • Reports and studies
  • Overhead, material cost, patenting costs, and capital costs

Ineligible Costs and Activities

  • Land acquisition, leasing land, buildings, renovation or construction, and other facilities, real estate fees and related costs
  • Financing charges, legal fees not linked to patenting, and loan interest payments
  • Goods and services received through donations or in kind
  • Property taxes
  • Lobbyist fees

Selection criteria

  • Proposals must meet all mandatory criteria to proceed to the point-rated stage
  • Proposals must achieve at least 65 of 130 possible total points to be considered responsive and placed in the Challenge Pool of Pre-Qualified Proposals; this minimum also applies to direct Entry at Phase 2
  • Canada may base funding decisions on voluntary certification for Indigenous-owned companies or Black-owned businesses, departmental and/or Government of Canada priorities, number of investments across priorities, previous years’ investments, strength of individual proposals, similar initiatives being funded, project types, and technology readiness levels

How to apply

  • Step 1: Review Supporting Documents and Eligibility
    • Consult the official supporting documents for the Challenge Stream.
    • Ensure your organization meets all the eligibility requirements.
  • Step 2: Identify Relevant Challenge
    • Browse current funding opportunities to find a challenge that matches your expertise.
    • Read all challenge content carefully to note specific timelines and funding parameters.
  • Step 3: Self-Assessment and Technology Readiness Level (TRL) Evaluation
    • Complete a self-assessment against the Technology Readiness Scale (TRL) to determine the appropriate application phase (Phase 1 or Phase 2).
  • Step 4: Prepare Application Package
    • Draft a comprehensive proposal addressing the specific challenge.
    • Include all required materials and supporting documentation as outlined in the chosen challenge.
  • Step 5: Submit Application
    • Submit your complete application through the official Challenge Stream application portal as specified in the challenge instructions.
  • Step 6: Screening and Evaluation
    • Your application will undergo screening and evaluation based on program criteria.
  • Step 7: Contract and Funding Agreement
    • If selected, sign a contract and receive details on funding disbursement and reporting requirements for your respective phase (Proof of Feasibility or Prototype Development).

Processing and Agreement

  • Canada may request clarifications during evaluation, and failure to respond may result in the proposal being declared non-responsive
  • Proposals that are responsive and meet all other requirements are placed in a Challenge Pool of Pre-Qualified Proposals, but placement does not guarantee selection or a grant
  • Canada may select one proposal, more than one proposal, or no proposal under a specific Challenge Notice, at its sole discretion
  • Each applicant receives a debrief communication noting the final results of the evaluation
  • Eligible recipients may be asked to provide interim progress reports, a final report, and to participate in business surveys for up to 5 years after project completion

Additional information

  • Canada’s default position is to allow funding recipients to retain the IP rights associated with their solutions
  • If your project was funded through a contract and your innovation is market ready, you may have an opportunity to submit an application to the Pathway to Commercialization (PTC) program feature
  • If your innovation is granted entry, it will be added to the list of eligible innovations for a 3 year period and will be available to federal organizations that may want to buy your commercialized innovation
  • For each potential contract under the PTC program feature, Public Service and Procurement Canada will determine the most appropriate procurement method, and in some cases a new competitive process may be required

Contacts

solutions@ised-isde.gc.ca

Other components of this program

Explore related funding streams and grants that belong to the same program.

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

What is the Innovative Solutions Canada - Challenge Stream for innovators?

Innovative Solutions Canada supports Canadian small and medium-sized businesses with funding of up to $2M to develop early-stage innovations for federal challenges. Eligible work includes market studies, proof of feasibility, prototype development, and testing in simulated or real operational environments.

How much funding can be received?

Innovative Solutions Canada - Challenge Stream for innovators Funds up to $2,000,000 of admissible expenses.

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 entity incorporated in Canada, federally or provincially Have 499 or fewer full-time equivalent employees, taking affiliated businesses into account Conduct research and development activities within Canada and meet the Canada-based wage, workplace, and senior executive residence requirements

What expenses are eligible under Innovative Solutions Canada - Challenge Stream for innovators?

Phase 1: market studies to validate commercialization potential, including competitive analysis Phase 1: activities directly related to demonstrating the technical and scientific merit and feasibility of the innovative technology or solution Phase 1: testing a basic product or process in a simulated environment Phase 2: developing a working prototype, integrating components for testing, and testing or demonstrating the prototype in a simulated or real operational environment Phase 2: getting the technology ready for commercialization

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) by email at solutions@ised-isde.gc.ca.

Where is the Innovative Solutions Canada - Challenge Stream for innovators available?

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

Is the Innovative Solutions Canada - Challenge Stream for innovators a grant, loan, or tax credit?

Innovative Solutions Canada - Challenge Stream for innovators is a Grant and Funding