Regional Artificial Intelligence Initiative (RAII) for Northern Ontario
FedNor reimburses up to 50% of capital costs or 75% of non-capital costs for Northern Ontario businesses that build or adopt AI. This is a repayable contribution, not a grant, so you must pay it back. Applications are open.
Before you spend any money
Intake is ongoing and there is no fixed deadline, but approval must come before you spend or start. Costs you commit to or pay before your eligibility date are not covered, except for a narrow 12-month retroactive window before your application is received (and no earlier than April 16, 2024). Apply and get approval before you start the work.
At a glance
Subject to program rules, available funding, and approval. Confirm current details with the official program administrator.
Is this for you?
- You are an incorporated business operating in or benefiting Northern Ontario for about two years or more.
- You have a defined project to commercialize Canadian AI tech or integrate AI into your operations.
- You can prove you have the financial capacity to complete the project and repay the contribution in full.
- You are ready to move beyond basic research, with commercialization projects at Technology Readiness Level 7 or higher.
Probably not the right fit if
- You run a retail shop or a service-based business, as these sectors are explicitly excluded.
- You are looking for free grant money you keep, since this is normally repayable for for-profits.
- You are in the early research phase, because basic research is excluded and commercialization projects must be at Technology Readiness Level 7 or higher.
How much you'd realistically get
For a for-profit business, normally a repayable contribution of up to 50% of eligible capital costs and up to 75% of eligible non-capital costs. All government funding combined cannot exceed those same caps. Not-for-profits can receive up to 75% of eligible costs as non-repayable. The official page does not list an application fee. The actual amount you get depends on your project and FedNor's assessment.
What may be supported
- Commercializing Canadian-made AI technology (technology demonstration and commercialization, at TRL 7 or higher)
- Business and capacity development to scale up an AI product
- Strategic AI adoption and integration into your operations
- Process re-engineering and capacity development around AI
- AI cluster or ecosystem capacity building
- Eligible costs such as machinery and equipment, facility improvements, incremental operating costs, project labour and subcontractors, advisory and technical services, prototyping and demos, IP and commercialization costs, and training
What's excluded or restricted
- Retail and service-based businesses
- Regular maintenance and/or ongoing operation costs
- Regularly scheduled capital expenditures and/or asset replacement
- Refinancing of an existing debt
- Costs of amortization and goodwill
- Acquisition of land and buildings
- Basic research
- The purchase of any assets for more than the fair market value of the said asset
- Costs for which the applicant has entered into a legal commitment/incurred prior to the eligibility date
How applying works
Effort: involvedThis is a two-stage federal application through the FedNor self-service portal: an initial application first, then a detailed application if you pass. You need to show a sustainable business model, financial capacity to repay, and managerial and technical capacity. The application takes time, and FedNor recommends talking to one of its officers before you submit.
- 01Confirm you qualify: incorporated business, project benefits Northern Ontario, about two years of operations, not retail or service-based, and TRL 7 or higher if you are commercializing.
- 02Talk to a FedNor officer first (recommended) to discuss your proposal and confirm fit before you submit.
- 03Create an account or sign in to the FedNor self-service portal using GCKey or Canadian online banking.
- 04Submit your initial application through the portal.
- 05If you meet the requirements, you will get an email saying the detailed application is available.
- 06Complete and submit the detailed application through the portal, then wait for FedNor's assessment.
Who to ask: Phone: 1-877-333-6673; Email (for portal questions): fednorcrmsupport-soutiencrmdefednor@fednor.gc.ca; Contact FedNor Officers via: https://fednor.canada.ca/en/contact-us/fednor-officers
Documents commonly required
- Proof you are an incorporated legal entity able to enter binding agreements.
- Financial statements or records showing a sustainable business model (normally about two years of operations) and financial capacity to complete and repay the project.
- A project plan and budget breaking out eligible capital and non-capital costs.
- Evidence of market or industry demand and growth potential for your project.
- Evidence of managerial, technical, and operational capacity to deliver the project (and, for commercialization, evidence of Technology Readiness Level 7 or higher).
What to know before you count on it
- For a for-profit business this is normally repayable. You pay it back, and you have to prove upfront you can repay it in full.
- Retail and service-based businesses are not eligible at all.
- Approval must come before you spend. Money already committed or spent outside the narrow retroactive window will not be covered.
- FedNor covers only part of the cost (for a for-profit business, up to 50% of eligible capital costs and up to 75% of eligible non-capital costs), so you fund the rest yourself.
What are your odds?
FedNor assesses applications as they come in, using its published criteria, so there is no fixed competition window. You must be incorporated, have operated for about two years, benefit Northern Ontario, and not be a retail or service business. A commercialization project must be at Technology Readiness Level 7 or higher. FedNor also looks at market demand, your capacity, and your ability to repay. Talking to a FedNor officer first helps you find out early whether your project fits.
Frequently asked questions
Do I have to pay this money back?
For a for-profit business, normally yes. It is a repayable contribution, which works like a loan you repay. You must show upfront that you can repay it in full. Not-for-profits can receive non-repayable funding instead.
Is this funding taxable income?
Because the for-profit funding is a repayable contribution (money you pay back), it is not taxable income the way a grant would be. Confirm the treatment for your specific situation with your accountant.
When do I actually get the money?
FedNor reimburses eligible costs, so you pay first and claim the money back. The official page does not give the exact payment schedule. Ask a FedNor officer before you plan your cash flow.
My business is in retail. Can I still apply?
No. Retail and service-based businesses are explicitly not eligible for this initiative, even for AI projects.
More funding by what it pays for
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Funding for Training
Grants to help you train staff and adopt new digital tools.
What you can combine it with
You can combine this with other government funding, but the total government share cannot exceed 50% of eligible capital costs and 75% of other eligible costs for a for-profit business (100% for not-for-profits). Other government funding for the same project counts toward these limits, so plan all your funding together.
Related programs
Targeted Manufacturing Initiative for Northern Ontario – Productivity Improvements
Up to 33% of costs
This Federal Economic Development Agency for Northern Ontario program helps established manufacturers in Northern Ontario invest in productivity.
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Retail Modernization Project Grant (RMPG)
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Ontario shops can get 50% back, up to $5,000, on modern store technology: POS systems, inventory tracking, self-checkout kiosks, CRM and more.
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Business Scale-up and Productivity (BSP) Stream
Up to $500,000
The Business Scale-up and Productivity Stream helps established Northern Ontario businesses modernize and expand.
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Worth reading before you apply
Get alerted when this changes
Programs open and close, budgets run out, rules change. We send one short email when something changes that matters for this program.
Page last updated ; status and deadline checked . Source: official program page.