The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is one of Canada's regional development agencies, responsible for supporting economic growth, innovation, and job creation across southern Ontario. For businesses building AI solutions, FedDev Ontario offers funding programs that complement federal programs like CDAP, IRAP, and SR&ED.
This guide covers FedDev Ontario's key funding streams, eligibility requirements, how to apply, and how to stack FedDev funding with other Canadian AI grants.
What Is FedDev Ontario?
FedDev Ontario is one of six regional development agencies funded by the Government of Canada. Its mandate covers southern Ontario — from the GTA to Windsor, Hamilton to Ottawa — a region home to over 12 million people and the largest concentration of SMBs in Canada. The agency distributes approximately $200 million annually through various programs.
Unlike SR&ED (which is nationwide) or the now-closed CDAP, FedDev Ontario is specifically designed for businesses operating in southern Ontario. If your business is located in northern Ontario, you would look at FedNor instead.
FedDev Ontario Programs Relevant to AI
Regional Innovation Ecosystem (RIE)
RIE supports organizations that help SMBs adopt new technologies and innovate. Funding flows through intermediaries — accelerators, innovation hubs, and industry associations — which then provide support to individual businesses. If you are an SMB, you typically access RIE benefits through a local partner organization rather than applying directly.
Business Scale-up and Productivity (BSP)
BSP provides repayable contributions up to $10 million to high-growth firms looking to scale operations, adopt advanced technologies, or expand into new markets. AI-related projects that improve productivity or enable scale qualify.
- •Eligible: Incorporated businesses in southern Ontario with 10+ employees and $1M+ annual revenue
- •Funding: Repayable contributions, typically covering up to 50% of project costs
- •AI relevance: AI-powered automation, predictive analytics platforms, machine learning infrastructure
Jobs and Growth Fund (JGF)
JGF provides non-repayable contributions (actual grants) for projects that create jobs and support economic recovery. AI-driven projects that demonstrably create employment can qualify. Funding amounts vary by project, typically ranging from $100,000 to $3 million.
General Eligibility Requirements
- •Incorporated business operating in southern Ontario
- •SMB (typically under 500 employees for most programs)
- •Demonstrated need for funding (viable project that would not proceed without government support)
- •Project must demonstrate economic benefit — job creation, revenue growth, or productivity improvement
- •Must be able to provide matching funds (typically 50% of project costs)
Stacking FedDev Ontario with Other Programs
FedDev Ontario funding can be stacked with other programs, but the Canadian government generally caps total government funding at 75% of total project costs. This means you must contribute at least 25% from your own resources.
- •FedDev Ontario + CDAP: CDAP covers the digital strategy; FedDev covers the technology implementation
- •FedDev Ontario + SR&ED: FedDev covers project costs; SR&ED covers experimental R&D wages (reduce SR&ED claim by FedDev amount on overlapping expenses)
- •FedDev Ontario + IRAP: Possible but less common — both cover implementation costs, so careful allocation is needed
Application Tips
- •Quantify job creation: FedDev Ontario heavily weights employment impact. Be specific about how many jobs your AI project will create or preserve.
- •Show the "but for" test: Demonstrate that your project would not happen without government support.
- •Engage early: Contact FedDev Ontario before submitting a formal application. Their regional officers can help you identify the right program.
- •Include a CDAP plan if you have one: A completed CDAP digital adoption plan demonstrates strategic thinking and strengthens your FedDev application.
Check your eligibility for FedDev Ontario and other grants
Our free eligibility assessment screens your business against FedDev Ontario, CDAP, IRAP, SR&ED, and other funding programs.
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