The Industrial Research Assistance Program, run by the National Research Council of Canada, supports small and medium innovative companies with 2 things: funding and advice. The funding takes the form of contributions, generally non-repayable, toward the cost of a defined development project, typically cost-shared (the program covers a portion of eligible salaries and contractor costs, the company covers the rest). The advice comes from an Industrial Technology Advisor assigned to the company, who helps scope projects and connects firms to the wider innovation network.
Unlike SR&ED, IRAP is project-based and forward-looking: it is negotiated and approved before the work, against a specific plan and budget, and paid as the project progresses rather than reimbursed after year-end. That makes it useful for timing, the cash can arrive closer to when it is spent, but it also means the funding is bounded by the approved project and the program’s budget, and is not an entitlement the way a tax credit is. Eligibility centres on being an incorporated, profit-oriented Canadian SME with the capacity to execute.
The interaction with SR&ED is the point most often missed. Because an IRAP contribution is government assistance, it reduces the SR&ED-qualified expenditures on the same costs, lowering the tax credit that would otherwise be earned. The two are complementary but not additive: an operator models them jointly, choosing how to allocate costs so the combined non-dilutive take is maximized, rather than assuming the dollars stack cleanly. Used well, IRAP plus SR&ED plus an equity round is the backbone of the early Canadian deep tech capital stack.