IRAP Funding: Subsidize your technological development with the Industrial Research Assistance Program

Subsidize your technological development with the Industrial Research Assistance Program (IRAP)

The National Research Council of Canada’s (NRC) Industrial Research Assistance Program (IRAP) provides financial support to eligible Canadian small and medium-sized businesses wishing to develop their innovation capacity by offering direct grants of up to $500,000 (the average amount it $94,000).

Once an agreement has been signed with the NRC, the program refunds up to 80% of salaries and 50% of contractor costs associated with the technological development of eligible projects. It does not cover any upstream expenses (those incurred during the planning phase or prior to the signature of the agreement) or those incurred after the start of the commercialization phase.

Eligibility requirements for the IRAP are significantly more stringent than those for other assistance programs. You must be able to provide not only very specific and detailed information on your technological project (technological objectives and uncertainties, expected challenges and difficulties, work plan, implementation plan, budget, etc.) but also information relating to the project business plan (rationale for the project, market, competition, sales forecasts, project funding up to commercialization, return on investment (ROI), etc.) Unlike with the SR&ED program, it cannot simply be shown that the project carries certain technological risks; it must also be proven that the project is highly likely to become commercially successful within a period of at most 18 to 24 months after it is launched.

In the best-case scenario (a solid project accompanied by all supporting documentation meeting IRAP requirements), the processing time for IRAP applications is about three months. It is important to be well prepared at the first meeting in order to avoid unforeseen delays due to requests for additional information and meetings by the NRC. You must plan for several meetings with the three NRC advisers assigned: Technological adviser, Business plan adviser and Coordinator.

It is thus crucial to ensure that both your presentation and supporting documentation are solid and complete. Delays can be very costly, particularly if you are at the development phase or if the project start date is imminent. As mentioned above, no expenses incurred prior to signing the agreement are eligible.

Once the agreement is signed, the grant is paid out in monthly installments based on the project progress. For this, you must implement a reporting system. The NRC may carry out audits to ensure observance of the terms of the agreement.

For businesses that do not have an existing Research & Development structure and that are not used to planning and documenting R&D projects in advance, a consultant may help improve their chances of obtaining an IRAP grant within a reasonable time frame.

Emergex can assist you in your IRAP application process

• Avoid wasting precious efforts and costs for nothing: We assess your project from a technological perspective and let you know how likely we believe your project is to be eligible before you actually invest any time and money preparing for a visit with the NRC.
• Increase your chances: We help you produce solid and compelling documentation and coach you to prepare for your meetings with the NRC advisers.
• Optimize programs: We optimize assistance programs and maximize your ROI for your R&D efforts (e.g., SR&ED, TCEB, MM, NSERC, MITACS, etc.)

Important note: Financial assistance obtained under the IRAP must be subtracted from SR&ED expenditures if the same project is being claimed under the SR&ED tax credit program, which thus reduces your SR&ED tax credits. Still, it may be worth putting in an SR&ED claim for an IRAP project as IRAP requirements are more stringent than those for the SR&ED program, and do not cover all SR&ED expenses. This is why a common IRAP / SR&ED strategy must be established.