Québec AI funding guide for manufacturers and distributors

Which programs should a Québec manufacturer or distributor look at first?

Start with the two programs built for this: DEC's IRIA, a federal program that funds SMEs adopting AI, and ESSOR from Investissement Québec, which funds digital diagnostics, digital plans and their implementation. Then ask your accountant about tax credits, and call your local Réseau accès PME point of service for regional options.

Everything below is a summary of official pages as we read them in October 2026. Programs change, budgets run out and rules are interpreted case by case, so every amount, percentage, deadline and eligibility detail is marked ^*. Confirm with the program officer before you plan around any figure.

Last reviewed October 2026. We update this page quarterly. Not legal, tax or financial advice.

What is DEC's Regional Artificial Intelligence Initiative (IRIA)?

Canada Economic Development for Quebec Regions (DEC, called CED in English) runs the Regional Artificial Intelligence Initiative. Its official page lists SMEs ready to adopt AI technologies among eligible clients, and one of its two pillars is "adoption and integration of AI by SMEs" ^*. It gives priority, depending on available funding, to SME adoption projects in sectors that include manufacturing and robotics ^*.

For SMEs, support is a repayable contribution of up to 50% of authorized costs ^*. Costs are eligible from the date the application is submitted ^*, so do not sign or pay for the project first. In July 2026, DEC announced about $13.85 million for 63 Québec organizations under IRIA and said the initiative runs in Québec until March 31, 2031 ^*.

How to apply: follow DEC's Apply for financial assistance guide or contact your DEC regional office to discuss the project first. Official page: Regional Artificial Intelligence Initiative.

What can Investissement Québec's ESSOR program cover?

ESSOR has five components. Two are relevant to AI adoption. Volet 1 funds studies before an investment: sub-component 1B covers a digital diagnostic, a digital plan, a priority-project analysis, an implementation plan and system selection, "including elements aimed at integrating artificial intelligence, if applicable" ^*. Sub-component 1C funds implementing a digital plan produced under 1B within the last 24 months ^*. Eligible expenses are mainly external consultant fees ^*.

Both 1B and 1C are non-repayable contributions of up to 50% of eligible expenses, capped at $20,000 (1B) and $50,000 (1C) for the life of the program ^*. They are open to businesses with 250 employees or fewer and annual revenue of at least $2.5 million ^*, and the application guide requires a French version of your website ^*. The program ends March 31, 2027 ^*. Some third-party sites still show older rates, so rely on the official page.

Volet 2 supports investment projects of at least $100,000 in eligible expenses through loans or loan guarantees, with a non-repayable contribution only in specific cases ^*. Eligible capital spending includes acquiring and installing software and expenses tied to a major technology transition such as cloud, business intelligence and AI ^*.

1. Fill in the ESSOR Volet 1 prequalification form linked from the official page (5 to 15 minutes, per IQ) ^*.
2. Register with the ministry's services through ClicSÉQUR Entreprises; IQ says to allow 24 to 48 hours for access ^*.
3. Download the application guide for your sub-component and gather the required documents, in French ^*.
4. Submit the online form. IQ states that if aid is confirmed, expenses are eligible from the date of the automated acknowledgment of receipt ^*.
5. For Volet 2, contact your Investissement Québec account manager or IQ's information line at 1 844 474-6367 ^*.

Official pages (in French): ESSOR overview https://www.investquebec.com/fr/financement/programmes-gouvernementaux/essor · Volet 1 https://www.investquebec.com/fr/financement/programmes-gouvernementaux/essor/appui-la-concretisation-de-projets-dinvestissement · Volet 2 https://www.investquebec.com/fr/financement/programmes-gouvernementaux/essor/essor-volet-2

Which tax credits may apply to AI and digital adoption?

Québec C3i (crédit d'impôt pour investissement et innovation). Québec's 2026-2027 budget plan describes a renewed, fully refundable C3i at 15%, 20% or 25% depending on where the investment is made, up to $100 million per four-year period ^*. It targets acquired productive assets such as certain manufacturing equipment, IT hardware and integrated management software ^*. A monthly software subscription is generally treated as an operating cost rather than an acquired asset ^*, so a service like Merlin is unlikely to qualify on its own. Claim it with form CO-1029.8.36.II (Revenu Québec form page).

Federal SR&ED. The Scientific Research and Experimental Development credit pays a 35% enhanced rate for Canadian-controlled private corporations on up to $6 million of qualified expenditures, for tax years beginning after December 15, 2024 ^*. It rewards work that resolves technological uncertainty. Buying and configuring an existing product usually does not qualify; building something new in-house might ^*. See the CRA investment tax credit policy.

Québec CDAEIA. The tax credit for e-business development integrating AI offers 30% of eligible salaries ^*, but it is aimed at IT companies that build AI solutions, not at manufacturers or distributors that use them.

Is the Canada Digital Adoption Program (CDAP) still open?

No. The Boost Your Business Technology grant page says the program is "fully subscribed and is not accepting new applications at this time" ^*. Businesses with an existing grant agreement can still sign in to the portal. If a vendor or consultant tells you CDAP can pay for an AI project today, ask them to show you the official page.

Status page: BDC, Canada Digital Adoption Program.

Are there regional or MRC programs?

Yes, but they vary by territory. Réseau accès PME is a free advisory service run by MRCs or by organizations they delegate. Its advisors can refer you to programs and help with financing, including local investment funds (fonds locaux d'investissement) ^*. Find your point of service on Québec.ca.

We do not list regional amounts here because they change by MRC and by year. Your local advisor is the fastest way to learn what applies in your region.

How does Merlin help you prepare a funding application?

Merlin does not apply for funding on your behalf, does not guarantee approval and does not take a success fee. What we can give you is the paperwork most programs ask for: a written project scope, a cost breakdown and a formal quote with dates.

Our offer is simple to document. The 30-day pilot is $3,500 on one workflow (Quote Desk), with one success metric agreed in writing up front; if the metric is missed, no monthly fee is owed. Setup is $5,000 to $15,000, quoted before you commit, and plans are $2,000 or $3,000 a month after the pilot (all CAD, taxes extra). See pricing and use the ROI calculator to estimate the time saved for your application narrative.

Timing matters. Several programs only accept costs incurred after you apply ^*, so talk to the program officer before you sign a pilot agreement or pay a deposit. For data-handling questions a program may ask, our security page covers Canadian hosting and Law 25. For a longer walkthrough, read our blog post on Québec AI grants.