Artificial intelligence (AI) is a powerful tool that has the potential to transform the economy across all industries in Canada. It holds tremendous economic potential in terms of commercialization, innovation, productivity and competitiveness, and has the potential to generate a range of social and environmental benefits for Canadians. The global race to scale up and adopt AI is on, and Canada is at the forefront of this technology. As part of Budget 2024, the Government of Canada has allocated $200 million to Canada's regional development agencies (RDAs) to help bring new AI technologies to market and help accelerate AI adoption in critical sectors such as agriculture, health sciences, manufacturing, mining supply and service and forestry.
The Regional Artificial Intelligence Initiative (RAII) will help bridge the gap between cutting-edge AI research and broader marketplace consumption with support spanning two pillars:
- AI productization and commercialization – Support AI scale-ups address common challenges on their journey from lab prototypes to real-world applications, including securing growth capital, talent acquisition, data management, and navigating regulatory and business conduct frameworks.
- Adoption of AI applications – Support will address AI adoption lag among small and medium-sized enterprises. Support will focus on addressing challenges, such as skills gaps, AI integration complexities, and compliance with regulatory and industry standards.
Expected results
Projects supported through the RAII program will work towards achieving one or both of the following departmental results:
- Businesses and organizations in Northern Ontario are investing in the adoption and commercialization of innovative technologies; and
- Businesses in Northern Ontario are innovative and growing.
Eligible applicants
Eligible applicants are those commercializing and/or adopting AI solutions, including:
- Incorporated small and medium-sized enterprises;
- Incorporated not-for-profit organizations;
- Indigenous (First Nation/Métis/Inuit) communities and organizations; and
- Municipalities and municipal organizations.
Note: Retail and service-based businesses will not be considered under this program.
Eligible activities
Eligible activities include:
Pillar 1: AI Productization and Commercialization
- Technology demonstration and/or commercialization of Canadian-made AI technologies and solutions.
- Business and capacity development supporting the scale-up of developing AI technologies and AI-driven solutions.
- AI cluster and ecosystem capacity building to strengthen start-ups commercializing AI solutions.
Pillar 2: AI Adoption
- Strategic AI adoption and integration of AI technologies and solutions that drive innovation, growth, and productivity.
- Process re-engineering and capacity development for AI adoption.
- Ecosystem support for small and medium-sized enterprises AI adoption.
Eligible costs
Eligible project costs must be reasonable, verifiable and in direct support of project activities and may include:
- Capital costs: purchase of machinery, equipment, and facility upgrades;
- Operating costs that are incremental and measurable;
- Project-specific direct labour (e.g., wages and benefits) and subcontractor costs;
- Professional advisory and technical services fees;
- Preproduction (e.g., prototyping, technological development and commercial demonstrations);
- Commercialization costs (e.g. costs related to intellectual property);
- Training and talent development costs;and
- Costs related to specialized services and materials (e.g., testing services, technical or innovation services, sector strategies in domestic markets).
Note:
- Costs may be eligible on a retroactive basis for a 12-month period prior to the receipt of a funding application, but no earlier than April 16, 2024.
- Applicants are encouraged to consider Canadian materials and content, where such materials and content are competitive and available.
Ineligible costs
Certain activities and costs will not be considered eligible, including:
- 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; and;
- Costs for which the applicant has entered into a legal commitment/incurred prior to the eligibility date.
Funding conditions
The actual contribution amount will be based on the minimum amount required to carry out the project.
Contributions to for-profit organizations will normally be:
- Repayable - terms of repayment will be determined during the development of the contribution agreement;
- Eligible for reimbursement up to 50% of capital costs and 75% for non-capital costs; and
- All government funding (federal, provincial and municipal) for a project cannot exceed 50% of eligible capital costs and cannot exceed 75% of other eligible costs.
Contributions not-for-profit organizations will normally be:
- Non-repayable;
- Eligible for up to 75% of eligible costs; and
- All government funding (federal, provincial and municipal) for a project cannot exceed 100% of eligible costs.
Other considerations
To be considered eligible, project benefits must accrue to Northern Ontario.
All eligible applicants must be legal entities capable of entering into legally binding agreements.
To be considered eligible for funding, applicants must demonstrate:
- A sustainable business model normally supported by two (2) years of operations.
- Financial capacity to complete the project and repay the contribution in full.
- Managerial, technical, and operational capacity to achieve the project's stated objectives in a timely manner.
- Market/industry demand (e.g., how the project addresses a significant gap in the market; global opportunity to be seized within Canada; and evidence that Northern Ontario is uniquely positioned to capture market share).
- Potential for market growth, diversification of export markets and/or participation in global value chains.
- A viable project plan with achievable outcomes, supported by verifiable cost estimates.
- Commercialization projects are at Technology Readiness Level (TRL) 7 or higher.
- Where appropriate, legislative/regulatory requirements (Artificial Intelligence and Data Act (AIDA)), responsible and ethical use of artificial intelligence, intellectual property management, and data security/privacy considerations have been made, and where necessary, mitigations are in place.
Completing an application does not guarantee funding approval. All applications will be assessed as they are received. This will include a review of the business case and financial projections, the applicant's past results, and the identification of any issues that may impact the project's success. Approval may also depend upon funding availability.
How to apply
The application process is two phases and submitted through the FedNor self-service portal. It is recommended that you review both the initial application guide and the detailed application guide.
Please call 1-877-333-6673 to discuss your proposal with a FedNor Officer in your area or begin your application process.
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