On-road Transportation Decarbonization — Demonstration Projects

• 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.

• 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.

• 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.

• 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.