CDAP and Canadian Government Funding for AI Adoption: What's Actually Available in 2026

If you have been searching for "CDAP" hoping to fund your AI project, you have probably noticed the program links on the official Canada.ca site either point to closure notices or to something new called LIFT. This creates a lot of confusion for Canadian business owners who heard about CDAP through an accountant, an advisor, or a blog post written in 2023 and assumed the grant money is still sitting there.

Here is the honest picture as of September 2026: the original CDAP is gone, and it is not coming back. But 2026 turned out to be the year Ottawa finally replaced it, in pieces. BDC launched a $500 million AI adoption program in April, the federal government released a national AI strategy in June with a target of getting 60 percent of Canadian businesses using AI by 2034, and SR&ED got its largest expansion in decades. This guide maps what is actually available, who qualifies, and which door to knock on.

What CDAP Actually Was

The Canada Digital Adoption Program launched in March 2022 under Innovation, Science and Economic Development Canada (ISED). It had two streams designed to help Canadian small and medium-sized businesses adopt digital tools, including AI where applicable.

The Grow Your Business Online stream provided micro-grants of up to $2,400 to help very small businesses establish basic e-commerce and digital presence. Think Shopify storefronts, digital marketing setup, and online booking systems.

The Boost Your Business Technology stream was the bigger one. Eligible businesses could receive a grant covering up to 90 percent of advisory costs, to a maximum of $15,000, to develop a digital adoption plan with a certified consultant, and then access up to $100,000 in 0 percent interest loans from BDC to implement that plan. This is the stream that mattered for serious digital transformation, including AI implementation projects.

Source: BDC: Canada Digital Adoption Program (closure notice and grant terms)

What Happened to CDAP

On February 19, 2024, CDAP stopped accepting new applications for the Boost Your Business Technology stream. Businesses that had signed grant agreements before that date could still receive their grant and access the BDC loan, but no new applications were accepted.

You will still find third-party blog posts, funding directories, and even some provincial pages that reference CDAP as active. It is not. If anyone tells you they can still get you into CDAP in 2026, they are either confused or misleading you. Neither Budget 2025 (November 2025) nor the April 28, 2026 Spring Economic Update announced a like-for-like successor. What arrived instead is a set of narrower programs, described below. The next federal budget is expected this fall, and we will update this guide when it lands.

Source: Finance Canada: 2026 Spring Economic Update (April 28, 2026)

The Closest Thing to a CDAP Successor: BDC LIFT

On April 24, 2026, the Business Development Bank of Canada launched LIFT, a $500 million initiative aimed at getting more than 1,000 Canadian SMEs adopting AI. It pairs expert AI advisory support with financing for technology adoption: AI applications, digital tools, data infrastructure, cybersecurity, and advanced equipment. Loans range from $25,000 to $5 million, and principal payments can be postponed for up to two years.

Source: BDC news release: BDC launches LIFT (April 24, 2026)

The important difference from CDAP: LIFT is financing, not a grant. CDAP handed you $15,000 you did not repay. LIFT lends you money at preferential rates (BDC has not published a fixed rate; expect it to depend on your credit profile) and wraps advisory around it. For a business that was going to fund AI adoption anyway, that is a genuinely useful package. For a business that only wanted the free money, it is not the same thing.

BDC frames LIFT with a statistic worth remembering: only 30 percent of Canadian SMEs used AI in 2025, yet those that did were 24 percent more productive than those that did not. That gap is the whole reason these programs exist.

AI for All: The National Strategy Behind the Money

In early June 2026 the federal government released its national AI strategy, called AI for All. The headline target is to raise business adoption of AI in Canada from 12 percent today to 60 percent by 2034. Three line items matter for small and mid-sized businesses:

• $500 million for BDC LIFT, the program described above.
• $500 million to expand the Regional Artificial Intelligence Initiative, delivered through the regional development agencies (PacifiCan in British Columbia, FedDev Ontario in southern Ontario, PrairiesCan, CED in Quebec, ACOA in Atlantic Canada, and the northern agencies).
• $700 million in affordable sovereign compute through an expansion of the AI Compute Access Fund.

Source: ISED: Canada's National Artificial Intelligence Strategy, AI for All

The strategy also includes venture capital measures from Budget 2025 and larger research and safety investments, but those three programs are the ones a Vancouver accounting firm or a Toronto manufacturer can actually apply to.

Current Federal Programs That Fund AI Adoption

Here are the programs worth checking in 2026 if you are looking for government funding for AI projects, with the honest caveats on each.

Regional Artificial Intelligence Initiative (RAII)

The RAII started as a $200 million program in Budget 2024 and is now being expanded under AI for All. It has two streams: one for AI companies moving from prototype to product, and one for businesses in other sectors adopting AI to improve productivity, with agriculture, healthcare, clean technology, and manufacturing named as priorities. In British Columbia it is delivered by PacifiCan, which received $32.2 million for the initial rollout. Intake dates and terms vary by agency, so the first step is contacting your regional development agency directly.

Source: ISED: Regional Artificial Intelligence Initiative and PacifiCan: RAII in British Columbia

AI Compute Access Fund

Part of the Canadian Sovereign AI Compute Strategy, this fund helps Canadian companies pay for the compute needed to build AI products. Projects can include compute costs from $100,000 to $5 million over up to three years, with the fund covering two-thirds of eligible costs for Canadian cloud providers and half for non-Canadian ones. Eligibility is narrow: for-profit companies with fewer than 500 employees, an R&D team in Canada, and a commercialization plan for an AI product or service.

Status check: as of September 2026 the fund is not accepting applications. The most recent intake closed on July 31, 2025. With $700 million in new money announced under AI for All, a new call for proposals is likely, and ISED offers a sign-up for program updates. If you are building a custom model or running serious GPU workloads, get on that list. If you are deploying ChatGPT or Claude for internal use, this program was never for you.

Source: ISED: AI Compute Access Fund (status and eligibility)

NRC IRAP and AI Assist

The National Research Council's Industrial Research Assistance Program has been the backbone of Canadian SME innovation funding for decades, providing advice, connections, and funding through a network of industrial technology advisors. Its AI Assist initiative supports scientific research, product development, testing, and validation of AI technologies, so that companies can integrate generative AI and deep learning into their own products and services.

Read that sentence carefully: AI Assist is about building AI into what you sell, not adopting existing tools. It is not easy to get. You need an advisor assigned to you, your project needs to show real technical innovation, and the process is substantial. NRC does not publish fixed funding ranges; contributions are non-repayable and scale with the project. The initial conversation with an advisor is free, and even when a project does not fit IRAP, advisors are usually good at pointing you to the program that does.

Source: NRC IRAP: Support for SMEs innovating with artificial intelligence

SR&ED Tax Credits (Expanded in 2026)

Scientific Research and Experimental Development is the largest federal innovation funding program in Canada, and 2026 made it materially bigger. Bill C-15, the Budget 2025 Implementation Act, received royal assent on March 26, 2026. For Canadian-controlled private corporations it raised the enhanced expenditure limit from $3 million to $6 million, which means up to $2.1 million per year in refundable credits at the 35 percent rate. The taxable capital range over which that limit phases out moved from $10 million to $50 million up to $15 million to $75 million. Capital expenditures, removed from the program in 2014 under Budget 2012 changes, are eligible again for property acquired on or after December 16, 2024, with the credit on capital up to 40 percent refundable. The changes apply to tax years starting on or after December 16, 2024.

Source: Welch LLP: 2026 changes in SR&ED and KPMG: Canada's SR&ED program enters a new era

If you are training custom models, building AI-integrated software, or doing experimental development to resolve technical uncertainty, the labour and now the equipment costs likely qualify. The catch has not changed: SR&ED requires careful documentation of the uncertainty, the hypothesis, the experiments, and the results. An experienced SR&ED consultant is almost always worth the fee, and the CRA looks hard at AI-related claims.

BDC Small Business Loan

Separate from LIFT, BDC continues to offer standard small business loans with a simplified online application. Rates are commercial. If your project is too small or too general for LIFT, this remains a practical non-grant option for website rebuilds, automation systems, and tool budgets.

Training Grants: The Door Most People Miss

Here is the part of this article that changed the most since April. Innovation grants fund research and product development. Training grants fund something different: teaching your existing staff to use new tools. That is exactly the "we want our team to actually use AI" project that IRAP and SR&ED will not touch.

In British Columbia, the B.C. Employer Training Grant opened for the 2026/27 fiscal year for training that begins on or after April 1, 2026. Funding is prioritized and has run out mid-year before, so confirm current availability with WorkBC before you book training. It reimburses 80 percent of eligible training costs up to $10,000 per participant per fiscal year, with a cap of $300,000 per employer. Training delivered by private providers is eligible provided the provider meets the Private Training Institutions Branch requirements, and training through a B.C. public post-secondary institution now earns an extra priority point. Employers must have been operating in B.C. for at least a year and be in good standing with the Province.

Source: WorkBC: B.C. Employer Training Grant, what's new (2026/27) and Province of B.C.: Employer Training Grant

Other provinces run their own versions, most of them descended from the Canada Job Grant model. If you are outside B.C., search for your province's employer training grant before assuming AI upskilling has to come out of pocket. Eligibility rules on who can deliver the training differ province to province, so confirm the provider requirements before you book anything.

Provincial Innovation Programs

Beyond training grants, every province has its own innovation and digital programs, and intakes change often. In British Columbia, Innovate BC is the front door for provincial innovation funding. In Ontario, the Ontario Centre of Innovation and MaRS Discovery District are the usual starting points for AI commercialization. Quebec's ESSOR program has historically been the closest provincial analogue to CDAP-style digital diagnostic support. In the Prairies and Atlantic Canada, PrairiesCan and ACOA carry both the RAII and their own regional growth programs. Treat all of these as places to check current intakes rather than guaranteed money; we have deliberately not quoted dollar figures here because they change with each budget cycle.

What Actually Qualifies for Funding

A common mistake is assuming an AI project qualifies for grants when it actually does not. Government funding programs are narrower than their marketing suggests. The 2026 changes widened the map, but each program still funds one specific kind of work.

Innovation-funded: Developing a custom AI model. Training on proprietary data. Building AI-integrated software products. Scaling compute for AI workloads. Experimental development to solve technical uncertainty. Hiring AI research talent.

Financing-funded: Implementing AI tools, automation, and data infrastructure across your operations. Buying advanced equipment. Cybersecurity upgrades that accompany a digital modernization. This is LIFT territory, and it is repayable.

Training-funded: Structured workshops and courses that teach your existing employees to use AI tools in their roles. This is the one category where "teach my team to use ChatGPT properly" is a fundable project, through a training grant, not an innovation grant.

Usually not funded by anyone: The software subscriptions themselves. General business software that happens to include AI features. Marketing and sales tools.

If your project is mostly subscriptions and setup, you are not looking for a grant. You are looking for an AI adoption assessment to make sure the investment is right-sized, a sensible tool budget, and possibly LIFT or a BDC loan to spread the cost. That is not a failure mode. It is just a different financing path.

How to Actually Apply

The application effort varies enormously by program. These are rough expectations, not published service standards:

• BDC LIFT: Apply directly through BDC. No fixed intake window has been announced; it runs like a lending product with advisory attached. Have financial statements and a clear description of what you will buy or build.
• SR&ED tax credits: Substantial documentation effort, typically with a consultant who charges a share of the recovered credit. The refund arrives after your corporate return is assessed, so plan on months, not weeks.
• NRC IRAP (AI Assist): Starts with an advisor meeting and usually takes a few months from first conversation to funding decision. Requires a detailed proposal, technical milestones, financial statements, and ongoing reporting.
• AI Compute Access Fund: Closed until the next call for proposals. Sign up for ISED updates now if you qualify; when a window opens it will not stay open long.
• Regional AI Initiative: Contact your regional development agency. Terms, timelines, and whether contributions are repayable vary by agency and stream.
• B.C. Employer Training Grant: Apply before the training starts, through WorkBC, and confirm funding is still available. Faster and more accessible than any of the above for a training-shaped project.

The Strategic View: Fund the Project, Not the Tool

Many Canadian business owners chase grants the wrong way. They find a program, then try to design a project that fits the program's rules. This almost never works. The applications get rejected, or they get approved for a project the business did not actually want to do.

The right sequence is: first, decide what your business actually needs. Do you need a custom AI product (innovation territory, IRAP and SR&ED)? Do you need to deploy existing tools effectively (financing territory, LIFT; and training territory, ETG)? Do you need AI-powered infrastructure (Compute Access Fund territory)? Once you know the real project, match it to the right program. Our AI strategy work is designed to help you make this distinction before you spend time on applications that will not pay off.

A useful rule of thumb: do not write grant applications for projects you would not actually do with your own money. If you would not self-fund the first phase, do not chase a grant for it either.

What to Do If You Were Counting on CDAP

1. 1Assess your project honestly. Is it building, implementing, or learning? This determines which program family applies. An honest AI readiness assessment will clarify this in a few hours.
2. 2Look at LIFT first if you were going to borrow anyway. It is the only program that combines advisory with financing the way CDAP did, even though the grant portion is gone.
3. 3Check your provincial training grant. If any part of your project is upskilling staff, this is the fastest money on the list.
4. 4Talk to an NRC IRAP advisor. The initial consultation is free, and advisors know the whole landscape, not just their own program.
5. 5File SR&ED for work you have already done. Claims can be filed up to 18 months after the tax year-end, and the 2026 limits are higher. Most businesses leave this money on the table.
6. 6Do not wait for perfect funding to start. The businesses that win start their AI initiatives with self-funding and bring in program dollars to accelerate specific phases.

The Honest Bottom Line

CDAP was a genuinely good program while it lasted. Its absence left a gap for small and mid-sized businesses that wanted subsidized access to digital adoption consulting, and in 2026 that gap is finally being filled, just not with free money. LIFT covers the advisory-plus-financing shape of CDAP. Training grants cover the upskilling piece nobody else funds. SR&ED and IRAP cover the businesses that are building rather than buying. The Regional AI Initiative fills in around the edges by province.

The catch is the same as it always was: each of these doors is narrower than CDAP. If you are building AI capability, the funding is there and it is bigger than it was in 2024. If you are training your team, there is a grant for that. If you are just buying AI tools, plan to pay for them, and use LIFT to spread the cost if the project is large enough to justify it.

If you are uncertain which path fits your situation, the AI consulting engagement usually starts with an assessment that includes a funding landscape review specific to your business, province, and project scope. We can flag the programs that might fit; final eligibility is determined by the program itself, and we do not write the applications.