Canadian defence spending is rising, and so is demand from NATO allies. The federal government has committed $357.7 million nationally through the Regional Defence Investment Initiative (RDII) to help Canadian businesses enter or expand in defence supply chains. If your business is in Atlantic Canada—or planning to be—this guide explains how to qualify for defence supply chain and NATO-related funding, with a focus on ACOA’s Regional Defence Investment Initiative.

You do not need a signed military contract to qualify. Under RDII, the defence supply chain includes companies that:

Supply goods or services to defence primes or subcontractors
Develop dual‑use technologies (civilian and military uses)
Support NATO, the Canadian Armed Forces, or allied countries
Offer enabling services like cybersecurity, advanced manufacturing, logistics, sensors, or AI

Projects must connect clearly to current or future defence needs. General innovation is not enough.

Eligibility is specific to Canadian programs like ACOA’s RDII. The main groups that can apply are:

Small and medium-sized enterprises (SMEs) active in or entering defence supply chains
Indigenous-owned businesses and organizations
Not-for-profit organizations such as accelerators, industry associations, or research centres
Provincial and municipal governments supporting defence ecosystems

Your business does not need to be established in defence. Even pre‑revenue companies can apply if your project shows a real path into the supply chain.

How much funding can you get, and what costs are eligible?

Funding amounts and eligible costs are set by Canadian rules:

Commercial SME projects:
- Up to 75% of eligible costs
Non-commercial or not-for-profit projects:
- Up to 90% of eligible costs
Indigenous-led projects:
- Up to 100% of eligible costs
Stacking is allowed up to 100% of total eligible costs with other government programs. You cannot receive more than 100% of eligible costs from all public sources.

ACOA is providing $38.2 million over three years starting in 2025–26 for Atlantic Canada.

Eligible project costs

Canadian programs like ACOA RDII cover expenses such as:

Product or process R&D
Equipment and machinery for defence manufacturing
Facility upgrades tied to defence production
Certifications and compliance (including defence standards)
Costs to integrate into defence supply chains

This is helpful if your business needs to meet procurement or NATO-aligned standards before bidding. For example, getting certified for defence contracts can be funded.

GrantHub’s eligibility matcher helps you filter defence and aerospace programs in Canada by province, industry, and project type.

Application steps for ACOA RDII and similar Canadian programs

Check your eligibility:
Confirm that your business or organization is based in Atlantic Canada or directly benefits the region. Review the specific requirements on the ACOA website.
Define your project:
Make sure your project links to defence supply chain or NATO-related needs. Avoid generic innovation projects.
Prepare a budget:
List all eligible costs. Include items like facility upgrades, certifications, and R&D. Remember, total public funding cannot exceed 100% of eligible costs.
Gather supporting documents:
Prepare your business plan, financial statements, and letters of support if needed.
Submit your application:
Apply through ACOA’s online portal or contact a program officer for guidance.
Follow up:
Stay in touch with your ACOA contact and respond to any requests for more information.

While RDII itself is not a NATO grant, it supports projects that:

Align with NATO capability gaps
Support allied defence procurement
Prepare Canadian suppliers for international defence contracts

Other regions have similar programs, such as Canada Economic Development for Quebec Regions (CED), which requires projects to meet the needs of the Canadian Armed Forces, NATO, or allied countries.

Atlantic Canadian firms funded by ACOA RDII can position themselves for wider Canadian and NATO-aligned defence work.

Common Mistakes to Avoid

Thinking you need an active defence contract:
RDII supports projects that help you enter the defence supply chain. Dual‑use products are eligible.
Submitting projects with no defence link:
Your proposal must show a clear connection to defence or allied needs, not just productivity gains.
Forgetting about compliance costs:
Certifications and facility upgrades are eligible. Not budgeting for them weakens your application.
Misunderstanding stacking rules:
You can combine RDII with other grants, but total public funding cannot exceed 100% of eligible costs.

Frequently Asked Questions

Q: Does my business need to be located in Atlantic Canada?
Yes. For ACOA RDII, your project must be based in Atlantic Canada or directly benefit the region.

Q: Is ACOA RDII funding repayable?
RDII funding is generally non‑repayable, especially for SMEs and not‑for‑profits.

Q: Are cybersecurity and digital defence projects eligible?
Yes, if they support defence supply chains or allied defence capabilities.

Q: Can startups apply, or only established manufacturers?
Startups and early‑stage SMEs can apply if their project shows a credible path into defence supply chains.

Q: Can municipalities or industry groups apply on behalf of businesses?
Yes. Governments and not‑for‑profits can apply for ecosystem‑building projects that support defence SMEs.

How to stack grants and loans without violating funding rules
What expenses are eligible under regional economic development grants?
What Business Expenses Are Eligible Across Canadian Grants and Loans?

Next Steps

Defence supply chain and NATO-related funding in Canada is more accessible than many businesses expect—especially through ACOA’s Regional Defence Investment Initiative. The key is aligning your project with defence needs and choosing the right funding mix.

GrantHub tracks active defence and regional development grants across Canada and helps you see which programs match your business profile before you apply.

How to qualify for defence supply chain and NATO-related funding in Canada