How much funding can be received?

Funds up to 75% of admissible expenses, capped at $5000000 per project.

What is the deadline to apply?

The program is accepting continuous intake

Who are the financial supporters of the On-road Transportation Decarbonization — Demonstration Projects?

On-road Transportation Decarbonization — Demonstration Projects is funded by Natural Resources Canada (NRCan), Government of Canada

On-road Transportation Decarbonization — Demonstration Projects

Q: What are On-road Transportation Decarbonization — Demonstration Projects's eligibility criterias?

Legal entities incorporated or registered in Canada (including for-profit companies) Must be majority owner of any assets purchased with funding Projects must align with eligible R&D or demonstration activities

Last Update: June 4, 2025

Canada

Funding for demonstration projects in transportation

On-road Transportation Decarbonization — Demonstration Projects at a glance

Eligible Funding

From $1,000,000 to $5,000,000
Up to 75% of project cost

Timeline

Open Date : May 25, 2023
Closing date : July 20, 2023

Financing Type

Grant and Funding

Eligible Industries

Utilities
Manufacturing
Transportation and warehousing
Professional, scientific and technical services
Public administration

Grant Providers

Natural Resources Canada (NRCan)
Government of Canada

Status

Closed

Overview of the On-road Transportation Decarbonization — Demonstration Projects program

Non-repayable contributions up to $5 million for demonstration projects that address barriers to the uptake of zero-emission on-road vehicles or improve the overall transportation system efficiency.

Financing terms and conditions

R&D projects: Funding from $500,000 to $1,500,000, up to 75% of total project costs (up to 100% for Indigenous applicants), over a period of up to 5 years.
Demonstration projects: Funding from $1,000,000 to $5,000,000, up to 50% of total project costs (up to 100% for Indigenous applicants), over a period of up to 5 years.
Eligible project expenditures may begin after official written notification of selection; retroactive claims are subject to restrictions.
Government funding stacking permissible up to 100% of eligible expenditures.

Eligible projects & activities

This grant supports projects that aim to decarbonize the transportation sector by fostering innovation in low- and zero-emission vehicles and their supporting infrastructure. Eligible projects are targeted at overcoming the technological and market barriers within Canada's transportation industry.

Development and testing of novel and innovative equipment, vehicle components, software, and methodologies including prototypes and field trials.
Installation of pre-commercial technology to operate in its intended environment for demonstration purposes.
Modification of existing systems to integrate new, innovative technologies or processes.
Engineering, design, and permitting associated with installing demonstration infrastructure.
Operation and performance testing of innovations in the transportation environment to evaluate efficacy.
Reducing cost/performance ratios for electric powertrain components and hydrogen fuel cells.
Demonstration of novel uses of battery electric and hydrogen fuel cell MHDVs.
Improving on-road vehicle energy efficiency through innovative design and new materials.
Innovative charging solutions addressing infrastructure challenges for zero-emission vehicles in specific contexts such as rural or multi-unit residential scenarios.

Examples of admissible projects:

$ 4,000,000

Electric truck fleet demonstration to promote zero-emission transportation in logistics

$ 4,000,000

Smart traffic management system installation to reduce urban emissions through improved traffic flow

$ 5,000,000

Development of hydrogen fuel cell buses to improve urban transportation efficiency

$ 3,800,000

Electrification of municipal vehicle fleet to promote sustainability in city operations

$ 3,000,000

Conversion of traditional taxis to electric vehicles for a green urban mobility solution

Eligibility criteria of the On-road Transportation Decarbonization — Demonstration Projects program

The applicant must be a legal entity incorporated or registered in Canada, such as a for-profit business, not-for-profit organization, community group, academic institution, provincial, territorial, regional, or municipal government or agency, or an Indigenous organization, business, or community.
The project must fall under research and development (R&D) or demonstration activities focused on decarbonizing on-road transportation within Canada.
Projects must address technical or market innovation barriers related to low- and zero-emission on-road medium- and heavy-duty vehicles or infrastructure supporting on-road zero-emission vehicles and system efficiency.
Projects cannot consist solely of the purchase of commercially available vehicles or supporting infrastructure.
The applicant must be the majority owner of any assets purchased with program funding.

Who is eligible?

For-profit organizations (including companies and utilities) incorporated or registered in Canada
Not-for-profit organizations (such as industry associations, research associations, and standards organizations)
Community groups
Canadian academic institutions
Provincial, territorial, regional, and municipal governments and their departments and agencies
Indigenous organizations and businesses

Who is not eligible

Companies whose projects consist solely of purchasing commercially available zero-emission vehicles (ZEVs) or associated infrastructure.
Organizations focused exclusively on off-road vehicles (mining, forestry, agriculture, construction) or their supporting infrastructure.
Businesses engaged primarily in other modes of transportation (air, rail, marine) or their supporting infrastructure.
Entities involved in battery supply chain, manufacturing, or inside-the-cell components.
Companies whose primary activity is energy storage or grid-side solutions that are asset-agnostic.

Eligible expenses

Salaries and benefits for employees working on the project.
Professional, scientific, technical, and contracting services.
Reasonable travel expenses, including meals and accommodation, based on government rates.
Capital expenditures for the purchase, installation, testing, and commissioning of qualifying equipment, materials, and products (including diagnostic and testing tools and warranties).
Laboratory and field supplies, and materials.
Printing and translation services.
Data collection services, including processing, analysis, and management.
Facility costs for meetings, seminars, or conference room rentals.
Licence fees and permits.
Capacity building and training.
Field testing services.
Overhead expenses directly related to the project, up to 15% of eligible expenses.
For Indigenous proponents: costs associated with Indigenous ceremonies (excluding hospitality) and honoraria for Elders.

Eligible geographic areas

Legal entities incorporated or registered in Canada.
Provincial, territorial, regional, and municipal governments and their departments and agencies within Canada.
Indigenous communities and organizations located in Canada.

Eligibility criteria of the On-road Transportation Decarbonization — Demonstration Projects program

Collaboration and leveraging: Projects that leverage funding from non-government sources receive additional points in the evaluation.
Support for departmental priorities: Projects may be selected based on support for regional balance in Canada, advancing inclusion, diversity, equity, and accessibility (IDEA), and socio-economic considerations.

How to apply to the On-road Transportation Decarbonization — Demonstration Projects program

Determine Eligibility

Review the Applicant's Guide to ensure that your organization and project meet the set eligibility criteria.

Expression of Interest (EOI)

Complete and submit your Expression of Interest (EOI) via the Applicant Portal by the specified deadline.
Your EOI will be reviewed by a technical expert panel.
Await notification of your EOI evaluation results.

Full Project Proposal (FPP)

If invited, complete and submit a Full Project Proposal (FPP).
Your FPP will undergo evaluation by a technical expert panel.
NRCan will notify applicants of the FPP evaluation results.

Additional information

Quarterly and yearly reporting is required for funded projects, with ongoing data collection for five years following project completion.
Applicants may be asked for permission to share their application with other funding organizations for potential co-funding or referrals.
Successful projects must complete a due diligence assessment before finalizing a contribution agreement.
Providing voluntary information on inclusion, diversity, equity, and accessibility (IDEA) may be considered in project selection, though not scored.