Program information

On this page

• Program objective
• Financial assistance
• What can be funded (eligible activities and costs)
• What cannot be funded (ineligible activities and costs)
• Other funding considerations

Program objective

The RDII aims to accelerate the integration of Prairie businesses, focusing on small and medium-sized enterprises (SMEs), and regional ecosystems into defence supply chains and increase their industrial and innovation capacity while bolstering economic development on the Prairies.

This includes investment in businesses whose products and services are dual-use and wish to pivot their activities to supply the defence sector. The RDII funds investments in projects steered to meet military needs and align with defence priority areas to strengthen Canada’s industrial capacities, though there may be other benefits deriving from it.

Financial assistance

PrairiesCan provides contributions under RDII, not grants.

PrairiesCan considers all other funding sources for the project and may give preference to projects that demonstrate greater leverage of funding from non-PrairiesCan sources.

Government funding (federal, provincial, and municipal) can cover up to 100% of eligible project costs.

Eligible incorporated businesses

RDII contribution funding for businesses is normally:

• repayable
• repayable contribution funding is generally repaid with no interest over 5 years in monthly installments beginning 1 year after the project end date
• up to 75% of eligible project costs
• at least 25% of project costs should be covered by non-PrairiesCan funding

Eligible not-for-profit organizations

RDII contribution funding for not-for-profit organizations is normally:

• non-repayable
• up to 90% of eligible project costs
• at least 10% of project costs should be covered by non-PrairiesCan funding

Eligible Indigenous applicants

RDII contribution funding for Indigenous applicants may cover up to 100% of eligible project costs.

What can be funded (eligible activities and costs)

Eligible activities

Project activities can last up to 3 years and must be completed by March 31, 2028.

All projects must be steered to meet military needs and align with defence priorities to strengthen Canada’s industrial capacities, though there may be other benefits deriving from it. Projects must demonstrate how they contribute to Canada’s defense industrial base and support military purposes.

In the case of projects involving dual-use technologies, products or services (i.e., civilian technologies, products or services that could ultimately have defence or military applications), the military component must be demonstrated (e.g., artificial intelligence, cyber security, quantum technologies).

PrairiesCan may give preference to activities that:

• target sectors that reflect Canadian military needs or defence priority areas, notably those outlined in the Defence Industrial Strategy (DIS), (e.g., artificial intelligence, cybersecurity, quantum technologies, space, sensors, aerospace, uncrewed and autonomous technologies, etc.)
• enhance productivity and competitiveness
• demonstrate strong regional economic benefits
• advance Indigenous economic inclusion
• strengthen Canadian supply chains, e.g. where possible buying from Canadian suppliers and using Canadian materials

These activities can include the following:

Technology adoption

• includes digitization, automation, or technology integration investments to enhance productivity and competitiveness.

Capacity building

• eligible activities for businesses include:
  • commercialization strategies including active participation in technology showcases (e.g., demonstrations, booths)
  • certification required to integrate into defence supply chains for specialized applications
• eligible activities for not-for-profits include:
  • business services providing market diagnostics, development and expansion activities
  • business and structural ecosystem support, market development, and guidance to support businesses
  • assisting in the development of commercialization strategies including participation in technology showcases
  • assisting in acquiring the certification required to integrate into defence supply chains for specialized applications

Productivity improvement

• includes acquisition of equipment as well as expansion and modernization of facilities, including manufacturing facilities
• includes acquisition of equipment to enhance the productivity of a strategic infrastructure used for defence purposes

Technology commercialization

• includes adaptation, adoption, development or improvement of dual-use technologies with both civilian and military applications
• includes research and development (R&D)
• includes establishment of research centres and centres of expertise

Eligible costs

Eligible costs under the program are incremental, reasonable and essential to carrying out the eligible project activities. Eligible costs can include the following:

• cost of labour (e.g., wages and benefits) and of material used
• capital costs: purchase of machinery, equipment and infrastructure
• consultancy fees (e.g., professional and technical services)
• costs related to preproduction activities (e.g., technological development and commercial demonstration)
• costs related to commercializing products, expanding or maintaining markets
• costs related to specialized services, such as testing services, research and development services, technical or innovation services
• costs related to meeting military certifications and/or standards (e.g., Cybersecurity Maturity Model Certification, Controlled Goods Program Certification, International Organization for Standardization, technical and engineering standards)
• costs related to development capacity to enable businesses to bid on defence projects

Costs may be eligible on a retroactive basis up to a 12-month period prior to the receipt of a signed funding request, but no earlier than April 1, 2025.

What cannot be funded (ineligible activities and costs)

Costs and activities that are deemed not reasonable, non-incremental, and/or not directly related to the project are ineligible for funding. These can include, but are not limited to:

• costs of amortization, land acquisition and goodwill
• salary bonuses and dividend payments
• entertainment and hospitality expenses
• refinancing of existing debts
• amortization or depreciation of assets
• purchase of any assets for more than their fair market value
• lobbying activities
• donations, dues, and membership fees

Other funding considerations

Talk to your accountant and/or the Canada Revenue Agency to understand how RDII funding could affect your taxes or other current or future funding agreements.