Government Funding for AI Adoption in Canada: What's Actually Available in 2026

If you've been searching for government grants to help your business adopt AI, there's a good chance you've landed on pages about the Canada Digital Adoption Program — and discovered that CDAP is no longer accepting applications. The program's Boost Your Business Technology grant closed to new applicants in February 2024, and the full program wound down in March 2025. As of this writing in June 2026, no federal replacement program has been announced.

That's the honest answer to what many Canadian business owners are looking for. But CDAP was never the only avenue, and it wasn't even the most valuable one for most businesses. Here's the current landscape — what's actually available, what to watch for, and how to find programs you might not know exist.

Is the Canada Digital Adoption Program Still Open?

No. CDAP ended in March 2025 and is no longer accepting new applications. Only a small group of businesses with agreements signed before February 2024 could continue under existing timelines. If you find a website or service claiming to help you apply for CDAP in 2026, that information is outdated. Verify current program status directly at canada.ca.

What Is NRC IRAP AI Assist — and Is It Right for Your Business?

The National Research Council's Industrial Research Assistance Program (NRC IRAP) is the federal government's primary vehicle for funding innovation at Canadian SMEs, and it has a dedicated stream that's directly relevant to AI adoption: IRAP AI Assist.

IRAP AI Assist is designed specifically to help Canadian small and medium-sized businesses integrate artificial intelligence — including generative AI and deep learning — into their products, services, and operations. Critically, AI does not need to be your core business offering to qualify. A plumbing company, a health clinic, a trades contractor — any business investing in AI adoption as part of how it operates or delivers services may be eligible.

IRAP works differently from a grant you apply for online. The program is advisor-led: you connect with an NRC Industrial Technology Advisor, who assesses your situation and determines fit before any funding is structured. This means the intake process looks more like a conversation than a form, and the flexibility of the program is much higher than a prescriptive grant stream. NRC IRAP allocated over $550 million in direct funding to Canadian SMEs in the 2025–26 fiscal year, funding up to 75% of eligible project costs. To learn more or connect with an advisor, contact NRC IRAP directly at nrc.canada.ca or by phone at 1-877-994-4727.

What About SR&ED Tax Credits for AI?

SR&ED — the Scientific Research and Experimental Development program — is administered by the Canada Revenue Agency and is the most broadly applicable federal funding mechanism for businesses developing technology in Canada. It operates as a tax credit rather than a grant, and it was significantly enhanced in Budget 2025: the annual refundable credit cap for Canadian-controlled private corporations doubled from $1.05 million to $2.1 million, and cloud computing costs (AWS, Azure, Google Cloud) were added as eligible expenditures for the first time.

The important distinction for AI specifically: using AI tools does not qualify for SR&ED. Developing AI — writing software, resolving genuine technological uncertainty, systematically testing approaches that haven't been proven — may qualify. If your business is building custom AI solutions or innovating in how AI is applied to your domain, SR&ED is worth investigating. We cover this in more depth in our SR&ED and AI guide. Always verify current rates and thresholds at canada.ca/sred, as they can change with federal budgets.

The AI Compute Access Fund: What Happened and What's Next

The federal government launched the AI Compute Access Fund in 2025, with up to $300 million to help Canadian SMEs building AI products access compute infrastructure. The fund covered two-thirds of eligible costs for Canadian cloud-based compute services for qualifying projects between $100,000 and $5 million. Applications were accepted starting in June 2025 and closed July 31, 2025.

As of June 2026, the AI Compute Access Fund is not currently accepting new applications, though the program exists and future intakes are possible. Businesses building AI products should monitor the ISED website (ised-isde.canada.ca) for updates on new application windows.

Don't Overlook Provincial and Regional Programs

Federal programs are only part of the picture. Every Canadian province and region has its own economic development programs, and many include digital adoption or innovation funding that can apply to AI projects:

• Atlantic Canada Opportunities Agency (ACOA) — programs for Atlantic Canada businesses including innovation and productivity funding
• Federal Economic Development Agency for Southern Ontario (FedDev Ontario) — supports innovation and technology adoption for Ontario SMEs
• Canada Economic Development for Quebec Regions (CED-Q) — Quebec-specific business development support
• PrairiesCan — covers Alberta, Saskatchewan, and Manitoba
• PacifiCan — supports BC businesses on technology and innovation
• CanNor — Northern Canada economic development

Provincial programs also exist separately — Invest Ontario, BC Innovates, Alberta Innovates, and others operate independently of federal agencies and can fund digital transformation projects including AI. Eligibility, funding amounts, and intake periods vary significantly, and many programs are not widely publicized. A business that doesn't qualify for federal programs may still qualify for provincial or regional support.

What Does Canada's New AI Strategy Mean for Small Business Funding?

In the Spring Economic Update tabled on April 28, 2026, the Carney government outlined six pillars for Canada's national AI strategy, including a stated commitment to "powering AI adoption for shared prosperity" and support for SME competitiveness. A new Small and Medium Business Procurement Program was announced with a planned spring 2026 launch, designed to make it easier for Canadian firms to win federal contracts.

The honest assessment: the AI strategy primarily signals direction and funds ecosystem infrastructure. The programs that directly benefit most small businesses today remain IRAP and SR&ED. New SME-specific programs flowing from the AI strategy may emerge in the next one to two years, but the mechanisms are still being designed. We cover this in more detail in our article on Canada's AI strategy and what it means for small business.

The Honest Picture for 2026

If you came here hoping to find a straightforward grant you can apply for online to fund AI adoption in your business, the honest answer is that the landscape right now doesn't offer that at the federal level. CDAP filled that role and it's gone. What remains is more nuanced: an advisor-led program through IRAP (including the AI Assist stream), a significant tax credit through SR&ED for businesses developing technology, regional programs that vary by province, and a national AI strategy that may produce more direct SME programs in coming years.

What this means in practice is that the businesses finding funding are the ones who know which questions to ask, which programs have current intakes, and which eligibility criteria actually fit their situation — including programs that aren't covered in any single federal overview.