Regional Defence Investment Initiative (RDII) 2026: Who Can Apply and Which Regions Are Open

The Regional Defence Investment Initiative (RDII) is a $379.2 million, three-year federal initiative that helps Canadian businesses, mainly small and medium-sized enterprises, get into domestic and international defence supply chains. It is delivered by the seven regional development agencies, so where your project takes place decides who you apply to and on what terms.

For businesses, RDII money is a repayable contribution, generally up to 75% of eligible costs. Not-for-profit organizations that support businesses can receive non-repayable funding. Every project has to be finished by March 31, 2028.

Intake is not the same everywhere. When we checked the agency pages on October 9, 2026, FedNor, CED and PrairiesCan were taking applications, ACOA was directing applicants to its regional offices, and FedDev Ontario and PacifiCan showed intake as paused or not accepting. This guide covers who qualifies, what RDII pays for, how the repayable terms work, and how to build a project the agencies will take seriously.

RDII at a glance

RDII sits under the federal Defence Industrial Strategy. FedNor describes it as supporting Canada's commitment to spend 2% of GDP on defence under its NATO obligations, which explains the program's main test: the project has to serve a defence need, not just make a manufacturer more productive.

Which agencies are taking applications

Each regional development agency runs its own RDII intake, eligibility details and process. This is what each agency's RDII page said on October 9, 2026:

• FedNor (Northern Ontario): applications are assessed as they are received; approval depends on funding availability. Repayable up to 75% for businesses, non-repayable up to 90% for not-for-profit ecosystem projects. Call 1-877-333-6673 or start in the FedNor client portal.
• CED (Quebec): marked as accepting applications. Projects must meet current or future needs of the Canadian Armed Forces, NATO or an allied country, with priority on SME growth and productivity projects. For SMEs contributions are repayable, up to 75% of eligible costs; for non-profits generally non-repayable, up to 90%.
• PrairiesCan (Alberta, Saskatchewan, Manitoba): apply as early as possible up to December 31, 2027, or until all funding is used. Call 1-888-338-9378.
• ACOA (Atlantic Canada): ACOA's share is $38.2 million over three years. Its page does not state an intake status; it asks you to contact your nearest ACOA office to discuss the project, then apply through its standard financial assistance process.
• FedDev Ontario (southern Ontario): intake for RDII is currently paused.
• PacifiCan (British Columbia): the status on its RDII page reads not currently accepting applications, although the same page describes accepting commercial projects seeking funding between April 1, 2026 and March 31, 2028. Confirm with PacifiCan before you plan around it.
• CanNor (territories): also delivers RDII; confirm the current intake directly with CanNor.

Who can apply

Across the agencies, eligible applicants fall into three groups:

• Incorporated businesses, mainly SMEs, already in defence supply chains or positioning themselves to enter them, including Indigenous-owned businesses
• Not-for-profit organizations that support businesses, such as industry associations, accelerators, incubators, research centres and post-secondary institutions
• Indigenous-led organizations, and at some agencies (ACOA, CED, PrairiesCan) provincial and municipal authorities

Some agencies add their own tests. PrairiesCan requires businesses to be incorporated to do business in the Prairies, in operation for at least 2 years, with staffed operating facilities in the Prairie provinces, and with funding from all other sources confirmed when they apply. FedDev Ontario's page (intake paused) required at least 5 full-time equivalent employees in southern Ontario.

The military-first test

In our experience this is the test that most often trips up applicants. FedNor states that every RDII activity must be military-first and must clearly show how it meets a specific military need. Projects involving dual-use technology must have a defined and measurable military component. Broader civilian benefits are welcome, but the investment decision has to be driven by a defence need.

FedNor also lists the defence priority areas it weighs: artificial intelligence, cybersecurity, quantum technologies, space, sensors, aerospace, shipbuilding and naval, uncrewed and autonomous technologies, training and simulation, munitions, and personnel protection.

What RDII pays for

FedNor organizes RDII into three streams: Business Scale-Up and Productivity for businesses, Regional Innovation Ecosystems for not-for-profits that support SMEs, and Defence-related Strategic Regional Assets for infrastructure that supports Canadian Armed Forces operations or secure access to defence-specific critical minerals. Eligible activities include:

• Digitization, automation and technology integration that improve productivity
• Certifications needed to join domestic and international defence supply chains
• Equipment purchases and facility expansion or modernization
• Adapting, adopting or improving dual-use technologies for defence applications
• Market diagnostics, market development, commercialization strategies and technology showcases
• Research and development at technology readiness levels 7 to 9

Eligible costs

• Incremental labour (wages and benefits) and materials directly related to the project
• Capital costs: machinery, equipment and infrastructure
• Consultancy fees for professional and technical services
• Preproduction costs such as technology development and commercial demonstration
• Commercialization and market costs
• Specialized services such as testing, R&D and technical services
• Military certifications and standards that let you bid on defence work (FedNor lists TAM, JCP, ADSM, CMMC, ISO and technical and engineering standards as examples)

What it does not pay for

FedNor excludes regular maintenance and operating costs, regularly scheduled capital expenditures and asset replacement, refinancing of existing debt, amortization and goodwill, acquisition of land and buildings, entertainment, lobbying, basic research, assets bought above fair market value, and anything committed before April 1, 2025. PrairiesCan excludes amortization, land acquisition and goodwill, salary bonuses and dividends, entertainment and hospitality, refinancing of existing debts, lobbying, and donations, dues and membership fees.

Repayable, not a grant: how the money works

For businesses, RDII is patient capital, not free money. The agencies that publish terms say:

• Businesses: repayable contributions up to 75% of eligible costs (FedNor, CED, PrairiesCan). PrairiesCan says they are generally repaid with no interest over 5 years, starting 1 year after the project ends, and expects at least 25% of project costs from sources other than PrairiesCan
• Not-for-profits: generally non-repayable, up to 90% of eligible costs, with at least 10% from other sources at PrairiesCan
• Eligible Indigenous recipients: up to 100% of eligible costs, repayable or non-repayable

Seventy-five percent is a maximum, not a default. Agencies size the contribution to the project and to what they consider necessary, and most do not publish a per-project cap. The paused FedDev Ontario intake listed $125,000 to $10 million and PacifiCan listed $100,000 to $10 million per project, which gives a sense of the scale they had in mind.

How to scope a strong RDII project

FedNor assesses projects on your capacity to deliver by March 31, 2028, how far the project supports SME integration into the defence sector, whether it targets defence priority areas, productivity and competitiveness gains, Indigenous economic inclusion, regional impact, and the quality and readiness of the plan and budget. Our advice for any agency is to build the file around four things:

1. A named defence customer or supply chain. Say who you will sell to: a prime contractor, a tier-one supplier, a Department of National Defence requirement, or an allied program. "Defence is a growing market" is not a military need.
2. A clear gap the project closes. The certification you lack, the capacity a prime has asked for, the tolerance or volume you cannot hit today. Tie each budget line to closing that gap.
3. Evidence of demand. Letters of interest, requests for quotation, supplier qualification steps or teaming discussions. Agencies weigh how directly the project leads to defence work.
4. A timeline that ends well before March 2028. Equipment lead times, installation, certification audits and first production runs all have to fit inside the program. A project that needs two years should start soon.

Dual-use companies should write the military component first and the civilian benefit second. If the project would make the same sense with no defence customer, it is probably a better fit for a general productivity program.

What to prepare before you call your agency

• A two-page project summary: the military need, the supply chain you are entering, what you will buy or do, total cost, and the outcome
• A budget with quotes for equipment, installation, certifications and outside services, split into capital and non-capital costs
• Your share, confirmed. Bank letters, board approval or other funding commitments. PrairiesCan requires all other funding confirmed at submission
• Financial statements for recent years and projections that show you can carry and repay the contribution
• Corporate documents showing incorporation and where you operate
• Supporting evidence of defence demand: correspondence with primes, RFQs, supplier registration or qualification steps

A realistic timeline

None of the agency pages we checked publishes a decision service standard for RDII, so plan conservatively:

• Weeks 1 to 2: confirm your agency's intake, define the military need, collect quotes
• Weeks 2 to 4: conversation with an agency officer to test fit; adjust scope
• Weeks 4 to 8: prepare and submit the application with financials and confirmed funding
• After submission: due diligence and, if approved, a contribution agreement; the time varies by agency and by demand
• By March 31, 2028: project complete and final claims ready

Common mistakes to avoid

• Presenting a general productivity project with a defence label added at the end
• Treating the contribution as a grant in your cash flow plan
• Applying to an agency outside the region where the project work happens
• Including land, routine maintenance, scheduled replacements or basic research in the budget
• Planning a project that cannot realistically finish by March 31, 2028
• Submitting with your share or partner funding still unconfirmed
• Leaving the file unprepared while your agency's intake is paused, so you start from zero if it reopens

How RDII fits with other defence and growth funding

RDII is one of several federal routes for defence suppliers. If your work is earlier-stage technology development, NRC IRAP DI Assist funds defence and dual-use R&D, and IDEaS and Innovative Solutions Canada fund challenges and testing set by government buyers. If the project is a general scale-up with no defence need, the regional agencies' Business Scale-up and Productivity streams are the closer fit. Eligible R&D inside an RDII project may also be claimable under SR&ED, subject to the usual reduction for government assistance.

When you combine programs, disclose every source. PrairiesCan states that government funding from all levels can cover up to 100% of eligible project costs and that it considers all other funding sources for the project. The same cost cannot be reimbursed twice. For program details in one place, see the RDII program page.

Frequently asked questions

What is the Regional Defence Investment Initiative?

RDII is a $379.2 million, three-year federal initiative delivered by Canada's seven regional development agencies. It helps businesses, mainly SMEs, integrate into domestic and international defence supply chains and build industrial and innovation capacity.

Is RDII funding a grant?

Not for businesses. Contributions to businesses are repayable, generally up to 75% of eligible costs. PrairiesCan says they are generally repaid with no interest over 5 years, starting 1 year after the project ends. Not-for-profits that support businesses can receive non-repayable funding, generally up to 90%.

Which regions are accepting RDII applications?

As of October 9, 2026: FedNor (Northern Ontario) assesses applications as received, subject to funding; CED (Quebec) is accepting applications; PrairiesCan accepts applications until December 31, 2027 or until funding is used; ACOA asks applicants to contact a regional office. FedDev Ontario has paused intake and PacifiCan's page shows a status of not currently accepting applications.

Do dual-use projects qualify for RDII?

Yes, if the project has a defined and measurable military component. FedNor states that all RDII activities must be military-first and must clearly show how they meet a specific military need.

What is the RDII deadline?

All projects must be completed by March 31, 2028. PrairiesCan accepts applications up to December 31, 2027 or until funding runs out. FedNor and CED do not publish an application deadline; funding depends on what is available.

Can RDII cover costs I have already spent?

At FedNor and PrairiesCan, eligible costs can go back up to 12 months before your application is received, but never earlier than April 1, 2025. Costs incurred before approval are at your own risk.

How much can a business get from RDII?

Most agencies publish no per-project maximum; the contribution is sized to the project, up to 75% of eligible costs for businesses at FedNor, CED and PrairiesCan. The paused FedDev Ontario intake listed $125,000 to $10 million and PacifiCan $100,000 to $10 million per project.