Challenge Stream for innovators

This stream is open to Canadian small and medium businesses. Through our competitions, we are looking for innovative ideas, early-stage innovations, and late-stage prototypes that can address specific challenges faced by government organizations. By participating in this stream, you may receive funding to develop a proof of feasibility report, and/or you may receive funding to build and test your prototype. As the innovator, you retain ownership of any IP developed during the process, and in the end, the market ready innovation is yours to commercialize.

On this page

• Challenge stream at a glance
• Before you apply
• Eligibility
• Application, screening and evaluation
• The two phases of the challenge stream
• Selling your market-ready solution

Challenge Stream at a glance

Phase 1

You can receive funding to prove the feasibility of your idea.

Phase 2

You can receive funding to build and test a prototype.

Before you apply

• Please take the time to read the official supporting documents for this stream.
• Double check that you meet the eligibility criteria before applying.
• Carefully read through all of the content in each challenge, as some may outline distinct completion timelines and specify varying funding amounts.
• If you don't see a funding opportunity aligned with your area of expertise, consider signing up to our newsfeed and following us on LinkedIn.

Eligibility

To receive funding, you must meet all of the following criteria:

• Operate as a for-profit entity
• Be incorporated in Canada (federally or provincially)
• Have 499 or fewer full-time equivalent (FTE) employees Footnote *
• Conduct research and development activities within Canada
• Currently allocate 50% or more of your annual wages, salaries and fees to employees and contractors who spend the majority of their time working in Canada Footnote *
• 50% or more of your FTE employees have Canada as their ordinary place of work Footnote *
• 50% or more of your senior executives (vice-president and above) have Canada as their principal residence Footnote *

Application, screening and evaluation

Your application process will begin with a self-assessment against our Technology Readiness Scale (TRL) that will determine the next steps:

• Solutions within TRL 1-4, may be considered for Phase 1.
• Solutions within TRL 5-9, may be considered for Phase 2.
• If you entered at Phase 1, and you successfully completed your proof of feasibility, you may considered for Phase 2.
• Occasionally, the competition may limit applications to only Phase 1 or Phase 2.

Specific details regarding maximum funding amounts, allotted timeframes for work completion and relevant phase for application will be outlined in each funding opportunity.

The two phases of the challenge stream

Phase 1 – Proving feasibility

At this phase, you must demonstrate the scientific, technical and commercial merit of your solution by developing a proof of feasibility report.

If your proposal is selected, you will have up to six months and a maximum of $150,000 in funding to develop a proof of feasibility report. In some cases, Phase 1 awards could reach a maximum of $300,000, and the timeline to provide a proof of feasibility may be subject to change.

Phase 2 – Developing and testing your prototype

If you are selected for the prototype development and testing phase, you may receive up to $1M in funding over a maximum period of 2 years to develop your innovation. In some cases, Phase 2 awards could reach a maximum of $2M.

Selling your market-ready solution

If your project was funded through a contract and, at the end of your project, your innovation is market ready, you may have an opportunity to submit an application to our pathway to commercialization (PTC) program feature.

In this phase of the program, you will be required to:

• re-certify that you still meet challenge stream eligibility
• prove that your innovation is market ready
• complete the pathway to commercialization application form

If your innovation is granted entry, we will add your innovation to our list of eligible innovations for a 3 year period. Over that 3 year period, your innovation will be available to federal organizations who may want to buy your commercialized innovation.

For each potential contract under the pathway to commercialization program feature, Public Service and Procurement Canada will determine the most appropriate procurement method. In some cases, a new competitive process may be required.

Footnote

Calculations must take into account and include affiliated businesses, such as parent companies and subsidiaries, that are either in or outside of Canada. Under the Innovative Solutions Canada program, an "affiliate" relationship exists in the following situations:

• If an affiliate is a corporation that is a subsidiary of another corporation.
• If a corporation has two subsidiary corporations, the two subsidiaries are affiliates of each other.
• If two corporations are controlled by the same individual or business, the two corporations are also affiliates of each other.

For greater clarity, the business applying in response to a challenge must include the full-time employees of its parent company (if applicable) when calculation the total full-time employees, taking into account affiliates located both within and outside of Canada.

Useful links

• Current funding opportunities
• Supporting programs
• Suggest a challenge
• Funded projects