Funding Your AI Transformation: Grants & Initiatives Available to BC Businesses

Federal Programs

BDC LIFT Initiative

The Business Development Bank of Canada launched LIFT (Lead with Innovation and Focus on Technology) in April 2026. It's a $500 million program designed to help Canadian SMEs adopt AI. Eligible businesses can access loans ranging from $25,000 to $5 million, with flexible repayment options including the ability to defer principal payments for up to two years. The program can also pair SMEs with industry AI advisors who help identify high-impact opportunities and build implementation roadmaps. To qualify for the Digital Transformation & AI track, your business needs a minimum of $1 million in annual revenue.

What it Offers

• Loans from $25,000 to $5 million at competitive rates
• Expert advisory support to identify opportunities, validate value, and guide implementation
• Flexible repayment options, including the ability to defer principal payments for up to two years

Eligibility

• Your business is incorporated in Canada
• You have fewer than 500 employees
• You have at least $1M in annual revenue
• You must complete a BDC advisory assessment before financing is approved (BDC assigns you an AI advisor to help build your implementation plan)
• Your project must include at least one Canadian technology or equipment component
• You can demonstrate ability to repay the loan (standard credit check)

NRC IRAP — Industrial Research Assistance Program

NRC IRAP is Canada's federal non-repayable R&D grant for technology-developing SMEs. The program covers 80% of salary costs and 50% of subcontractor costs for eligible work, with first-time applicants typically receiving between $75,000 and $200,000. In the 2025–2026 fiscal year, NRC IRAP allocated over $550 million in direct funding to Canadian SMEs. Every applicant is assigned a dedicated Industrial Technology Advisor who guides the process.

What it Offers

• Non-repayable grant covering 80% of eligible salary costs and 50% of subcontractor costs
• First-time applicants typically receive between $75,000 and $200,000
• Advisory services through a dedicated NRC Industrial Technology Advisor (ITA) assigned to your project
• Can be stacked with SR&ED to maximize total funding recovered

Eligibility

• Your business is incorporated in Canada
• You have fewer than 500 employees
• Your project involves genuine R&D (you are developing or significantly adapting a technology, not simply purchasing and installing an off-the-shelf solution)
• There is no minimum revenue or operating history required
• You must be a for-profit business

SR&ED — Scientific Research & Experimental Development Tax Credit

SR&ED is a federal tax incentive program that allows businesses to recover a portion of their R&D expenditures. Budget 2025 raised the SR&ED enhanced expenditure limit from $3 million to $6 million for Canadian-controlled private corporations, making the maximum enhanced credit $2.1 million per year at the 35% refundable rate. Importantly, SR&ED can be stacked with IRAP to cover costs that IRAP doesn't.

What it Offers

• 35% refundable tax credit rate for Canadian-controlled private corporations (CCPCs), meaning a private company majority-owned by Canadian residents, on eligible R&D expenditures
• Enhanced expenditure limit raised to $6 million (Budget 2025), making the maximum enhanced credit $2.1 million per year
• Can be claimed retroactively (unlike IRAP)
• Stackable with IRAP

Eligibility

• Your business pays Canadian corporate taxes
• Your project involved solving a genuine technical problem where the answer wasn't already known (routine software configuration or standard implementation does not qualify)
• You kept records of your technical work: what you tried, what failed, and what you learned (the CRA requires documented evidence)
• Canadian-controlled private corporations (CCPCs), meaning a private company majority-owned by Canadian residents, receive the highest refund rate of 35%; other corporations receive a lower rate

Provincial Programs (BC)

PacifiCan — Regional Artificial Intelligence Initiative (RAII)

The Regional Artificial Intelligence Initiative funds up to $3 million per project for businesses that are adopting AI solutions in BC, and up to $5 million per project for not-for-profit organizations supporting AI commercialization. PacifiCan is delivering $32.2 million through this initiative in BC, with a focus on projects that bring positive outcomes for human health, the environment, and economic resilience.

What it Offers

• Up to $3 million per project for businesses commercializing or adopting AI in BC
• Up to $5 million per project for not-for-profit organizations supporting AI commercialization
• Interest-free repayable financial support for SMEs (up to 50% of authorized costs); generally non-repayable support up to 90% for NPOs

Eligibility

• Your business is incorporated in Canada
• You have been operating for at least two years
• You have at least one full-time employee
• Your project involves adopting or commercializing AI technology
• You have secured funding from other sources to cover at least 50% of your total project costs (government funding alone is not enough, you need private or internal funds to match)
• Your project is based in BC and delivers benefits to health, the environment, or economic productivity (projects in these areas are prioritized)

BC Employer Training Grant (ETG)

If AI training for your team is part of your implementation plan, the BC ETG can offset a significant portion of the cost. Employers can apply as often as needed and receive 80% of the cost of training, up to $10,000 per employee, with a maximum annual amount of $300,000 per employer. Training must be delivered by an approved provider and result in a measurable skill outcome for the employee.

What it Offers

• Reimburses 80% of eligible training costs, up to $10,000 per employee
• Maximum of $300,000 per employer per year
• Employers can apply as many times as needed
• Covers AI literacy, tool-specific training, and digital upskilling programs

Eligibility

• Your business operates in BC
• The employee being trained is a Canadian citizen, permanent resident, or protected person
• Training is delivered by an approved provider (a BC public college or university, a PTIB-certified private institution, or an industry association)
• The training results in a measurable new skill (a certificate, credential, or documented competency)
• Training is no longer than 52 weeks

Innovate BC — BC Fast Pilot Program

The BC Fast Pilot program supports up to $200,000 for BC-based SMEs to pilot and demonstrate new technologies in real-world conditions, helping companies design, build, and operate pilot projects to prove value and encourage customer adoption. Delivered in partnership with NRC IRAP, applicants must be BC-incorporated with fewer than 500 employees and have a prototype ready for demonstration.

What it Offers

• Up to $200,000 to design, build, and operate pilot-scale technology demonstrations in real-world conditions
• Helps prove the value of an AI solution with an early adopter, reducing risk for future customers
• Delivered in partnership with NRC IRAP

Eligibility

• Your business is incorporated in BC
• You have fewer than 500 employees
• You are a for-profit company
• You have a working prototype ready to be tested (this program is for validation, not early-stage development)
• You have an early adopter customer willing to host the pilot
• You have connected with an NRC IRAP Industrial Technology Advisor (ITA)

Innovate BC — Ignite Program

The Ignite Program supports collaborative R&D projects between BC-based academic and industry partners, focused on solving industry problems and driving technological innovation in natural resources and applied sciences. Projects must involve a BC post-secondary institution as a partner, with IP ownership agreed upon before applying.

What it Offers

• Up to $300,000 for industry-academic R&D collaborations
• Funds research and development of innovative technologies through to commercial readiness
• Co-funding model (industry partner contributes matching funds)

Eligibility

• Your business is based in BC
• You have a BC university or college willing to partner on the project (this program funds industry-academic collaborations, not companies working alone)
• The majority of the work takes place in BC
• You and your academic partner have agreed on who owns the intellectual property before applying
• Your project is focused on R&D in natural resources or applied sciences (AI projects in these sectors are a strong fit)

A Note on Stacking

Many of these programs can be combined in a strategy known as "stacking." For example, a business could use NRC IRAP to fund the development phase of an AI project and claim SR&ED on the remaining eligible costs. The BC ETG can run in parallel to cover staff training. Navigating these combinations requires careful planning, but there is potential to offset a large share of your total project cost.

Disclaimer: The funding programs, eligibility criteria, and amounts described above are accurate to the best of our knowledge at the time of writing, but these policies and initiatives are changing rapidly. Before making any decisions, please confirm the latest details directly with the program providers via the links above.