Québec AI grants for manufacturers: preparing an IRIA or ESSOR application
Québec manufacturers and distributors adopting AI may be eligible for DEC's Regional Artificial Intelligence Initiative (IRIA) and, for digital planning and implementation, Investissement Québec's ESSOR program. Neither is guaranteed: both are discretionary and subject to available funds. The applications that move fastest describe one concrete project, list costs backed by supplier quotes, and are filed before any eligible cost is incurred.
Which Québec programs may fund an AI project?
Two programs come up most often for SMEs that want to adopt AI in sales, operations or production. The summary below reflects the program pages we reviewed in October 2026. Program rules change, so confirm every detail with the program officer before you rely on it. Our Québec AI funding guide keeps a broader overview.
| Program | Run by | What it may fund | Key details |
|---|---|---|---|
| IRIA (Regional Artificial Intelligence Initiative) | Canada Economic Development for Quebec Regions (DEC) | AI adoption or integration by SMEs, and AI commercialization | SMEs: repayable contribution of up to 50% of authorized costs *; ongoing intake while funds last * |
| ESSOR, sub-component 1B | Investissement Québec with the MEIE | Digital diagnostic, digital plan, implementation plan and system selection, including AI where applicable | 250 employees or fewer and revenue of at least $2.5M * |
| ESSOR, sub-component 1C | Investissement Québec with the MEIE | Implementation of a digital plan | Requires a digital plan from sub-component 1B completed in the last 24 months * |
Not an exhaustive list, and not a promise of funding. ESSOR sub-component 1A, which covers feasibility studies for investment projects, excludes digital diagnostics and digital plans *.
What does IRIA look for?
According to DEC's program page, IRIA supports two kinds of projects: the development and commercialization of AI by startups and growing companies, and accelerating AI adoption or integration by SMEs. A distributor or manufacturer adopting an AI tool falls under the second pillar.
SMEs may receive repayable assistance of up to 50% of authorized costs *. Costs are eligible from the date the application is submitted *, and applications are accepted on an ongoing basis subject to available funds *. When funds are limited, DEC says it may give priority to SME adoption projects in sectors including manufacturing and robotics, and to projects that include cybersecurity measures *.
What does ESSOR require?
ESSOR is a Québec government program administered by Investissement Québec. For digital projects, sub-component 1B funds the diagnostic and plan, and sub-component 1C funds implementing it. The 1B and 1C presentation guides state that only companies with 250 employees or fewer and revenue of at least $2.5 million are eligible *.
The guides also set strict rules on costs and documents *. Costs incurred before the filing date, including those under contractual commitment, are not eligible. Internal company expenses and sales taxes are not eligible. Applications must include a project description and financing plan, two years of financial statements, compliant service offers from suppliers, and, for companies with 25 or more employees, proof of compliance with francization requirements. Documents must be in French, and incomplete applications are refused.
How do you prepare a strong application?
- Pick one workflow with a measurable outcome, such as median quote response time, rather than a vague ‘AI transformation’.
- Write down today's baseline: request volume, minutes per request, response time. Reviewers like before-and-after numbers.
- Get written supplier quotes for every external cost: setup, pilot, subscription, training.
- Check eligibility rules for employee count, revenue, francization and the program's sector exclusions.
- File before you sign or pay anything you want covered. Costs incurred before filing may be refused.
- Prepare documents in French, including the project description, and keep a copy of everything you submit.
- Plan your cash flow as if the funding never arrives. It is discretionary and can take time.
Worked example: budgeting an AI quoting project
This is an illustrative budget using Merlin's published prices, not an estimate of what any program will pay. Suppose a manufacturer plans a one-time setup at $10,000 (setup is quoted at $5,000 to $15,000 depending on scope), a $3,500 30-day pilot on the Quote Desk, and six months of the Starter plan at $2,000 a month.
The external costs add up to $10,000 + $3,500 + (6 × $2,000) = $25,500 before taxes. If a program covered up to 50% of authorized costs and every item were authorized, the maximum contribution would be $25,500 × 50% = $12,750 *. Under IRIA, that contribution would be repayable for an SME *.
In practice, not every cost is authorized, internal staff time is often excluded, and the program decides the amount. Treat any assistance as a possible bonus, not as part of the business case. See pricing for current plan details.
| Illustrative cost item | Amount (CAD, before taxes) |
|---|---|
| One-time setup (example within $5,000–$15,000) | $10,000 |
| 30-day pilot (Quote Desk) | $3,500 |
| Starter plan, 6 months × $2,000 | $12,000 |
| Total external costs | $25,500 |
| Up to 50% if fully authorized * | $12,750 |
What are the most common application mistakes?
- Starting the project, or signing the contract, before filing.
- Describing AI in general instead of one workflow with a measurable result.
- Counting internal salaries or sales taxes as eligible costs when the program excludes them.
- Missing documents: financial statements, supplier quotes or proof of francization compliance.
- Submitting in English when the program requires French.
- Building the business case on the grant, so the project stalls if it is refused or delayed.
How can Merlin help with an application?
We cannot apply for you and we never promise funding. What we can do is give you a written quote for setup and the pilot before you commit, and help you describe the project and its success metric in plain language, in English or French. Our pilot is built around one success metric agreed in writing up front, which maps well to the measurable outcome reviewers look for.
If you are weighing AI more broadly, read AI for distributors in Québec. Merlin is hosted in Canada and built with Québec's Law 25 in mind, which is often a question in the cybersecurity section of an application.
Frequently asked questions
Is my company eligible for an AI grant in Québec?
It may be. Eligibility depends on the program, your size, revenue, sector and project. Contact DEC or Investissement Québec to confirm before you plan around it.
Is IRIA a grant or a loan?
For SMEs, DEC's program page describes repayable assistance of up to 50% of authorized costs *. Non-profits may receive non-repayable assistance.
Can I start the project before I apply?
Avoid it. IRIA costs are eligible from the date the application is submitted *, and ESSOR guides state that costs incurred before filing are not eligible *.
Does Merlin guarantee funding?
No. Funding is discretionary and decided by the program. We can provide a written quote and help you describe the project, in English or French, to support your application.
Do I need documents in French?
For ESSOR, the presentation guides require all documents to be in French *. Preparing your file in French is a safe default for Québec programs.
