AI Adoption Funding for Ontario SMEs
April 2026
The Canadian government has committed hundreds of millions of dollars to help small and medium-sized businesses adopt artificial intelligence — but most Ontario SMEs don't know these funds exist, let alone how to access them.
This guide outlines the active, funded programs available to you right now — including programs that can directly fund advisory services, AI readiness assessments, and implementation planning.
Important: The Canada Digital Adoption Program (CDAP) was cancelled in March 2024. The $15K grant and $100K loan are no longer available. Any source still listing CDAP is out of date. The programs in this guide are confirmed active for 2026.
NRC IRAP — AI Assist Stream
Canada's largest non-repayable R&D funding program. The dedicated AI Assist stream ($100M over 5 years) is specifically for SMEs developing or integrating AI. Covers up to 80% of eligible salary costs and 50% of subcontractor/consulting costs. A dedicated Industrial Technology Advisor guides your application.
Advisory and consulting fees are eligible subcontractor costsFedDev Ontario — RAII & Business Scale-Up
The Regional Artificial Intelligence Initiative delivers $200M through Canada's regional development agencies. FedDev Ontario covers Hamilton, Toronto, Waterloo, and all of southern Ontario. The Business Scale-up and Productivity stream supports AI adoption for productivity gains. Preference given to SMEs under 500 employees.
AI readiness, process re-engineering, and advisory services are eligible activitiesOntario Centres of Innovation — CIT Program
The closest active replacement for CDAP in Ontario. The Future Ready stream offers $10K with light eligibility — ideal for an AI readiness assessment. The Development stream offers up to $200K at 50% cost-share for implementation. Best fit for manufacturing, construction, agri-food, and services.
Assessments, strategy development, and implementation planning are eligibleSR&ED — Scientific Research & Experimental Development
Canada's largest R&D support mechanism and the most commonly missed credit among SMEs. If your business is building custom AI workflows, automations, or tools — even internally — you likely qualify. Ontario SMEs can stack SR&ED with IRAP or OCI provided costs are properly allocated. Works as a refundable tax credit, not a grant, but often exceeds grant value.
Custom AI development, prototyping, and technical validation are eligibleScale AI — Supercluster Program
One of Canada's five global innovation clusters, focused on AI for supply chains, automation, and productivity improvement. Scale AI funds accelerator programs that provide financial and strategic support to SMEs. Best fit for businesses in logistics, manufacturing, retail, and distribution.
Supply chain AI, automation, and productivity projects are eligibleMitacs — SME AI Adoption Call
Mitacs is launching a targeted call for proposals in 2026 under the theme "Accelerating AI Adoption by SMEs in Canada and the G7." Three complementary programs will support different stages of adoption. Businesses with an AI strategy already in place will be better positioned to apply quickly.
Businesses with an AI strategy in place will be better positioned to applyHow to Stack These Programs
- Start with OCI Future Ready ($10K) to fund your AI assessment
- Use the assessment to qualify for IRAP AI Assist (up to $250K)
- Claim SR&ED on top if custom development is involved
- Layer FedDev/RAII for scale-up or productivity projects
- Disclose all funding sources — stacking is allowed with proper allocation
What Grants Can Pay For
- AI readiness assessments and gap analyses
- AI strategy and implementation planning
- External consultant and advisory fees
- Staff time on AI adoption projects
- Pilot projects and AI tool integration
- Training and change management
Take The Free AI Readiness Assessment
The programs listed above favour businesses that already have a simple idea of where AI fits in their business.
Taking the StrategicIQ AI Readiness Assessment™ it gives you clear idea of one single task where AI could support the most in less than 5 minutes.