Regional Artificial Intelligence Initiative (RAII) for Northern Ontario

Artificial intelligence is changing how businesses operate, innovate and compete. Supporting responsible AI adoption and commercialization will improve productivity, grow Canadian companies, strengthen the economy, and help share the benefits and opportunities created by AI across regions and communities.

The Regional Artificial Intelligence Initiative (RAII) provides funding to:

• help businesses and organizations adopt and integrate AI to improve productivity, competitiveness and resilience
• help Canadian AI companies bring their products and services to market and scale in Canada and globally
• strengthen the organizations and networks that help businesses adopt and commercialize AI.

As part of AI for All, Canada’s National Artificial Intelligence Strategy, an additional $500 million over five years is available through the expanded RAII, bringing total federal funding for the initiative to $700 million.

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;
• 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:

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 directly related to, and necessary for, the completion of the project;
• Operating costs that are incremental and measurable (e.g., hardware, software, data, costs to access AI-related infrastructure such as data storage and/or data management platforms, cybersecurity systems, network and server infrastructure);
• 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, including routine software subscriptions and licence renewals;
• General-purpose computing equipment unless directly required for an eligible AI project;
• 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 eligible 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 90% 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, 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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