2025 Building Canada Strong Federal Budget Highlights – Grants & Incentives 

The Building Canada Strong 2025 Federal Budget was developed to enact the government’s plan for spending, establishing financial priorities, and funding social and economic policies and programs for the coming years. As an investment map for the whole country, the new Budget informs the kinds of investment goals businesses and municipalities should set for their organizations. By finding points where unique organizational goals intersect with the spending goals set by the federal government, businesses and municipalities can create effective strategies for accessing grants and incentives to fast-track their projects. 

Read on for a summary of key funding program announcements found in the 2025 Canadian Federal Budget, as well as tips for taking part in the new investment agenda.

2025 Federal Budget Goals 

2025 Federal Budget Funding Highlights 

Right now, Canadian businesses and municipalities have the unique opportunity to align their internal organizational goals with these broader aims, and it is crucial to begin planning upcoming investments early to be well-positioned for available funding opportunities as they arise. Keep these grants and incentives announced in the 2025 Federal Budget top of mind while planning upcoming projects and investment priorities:

Housing 

• Build Canada Homes – $13B allocated over five years to expand housing, focusing on non-market affordable housing, transitional and community housing, and market-led rental programs, including $1.5B through the Canada Rental Protection Fund. This program is open to municipalities, provinces, territories, Indigenous communities, and private sector partnerships.

Agriculture

• AgriStability Program – $109.2M invested to increase the compensation rate from 80% to 90%, helping agricultural producers combat adverse market conditions and increased costs that are leading to declines in farming income.

• AgriMarketing Program – $75M allocated over five years to enhance the diversification and promotion of agriculture, agri-food, fish, and seafood products to new markets.

• Advance Payments Program – $97.5M allocated over two years to increase the program’s interest-free limits for canola producers to $500K and to $250K for all producers.

• Biofuels Production Incentive – $372M over two years, starting in 2026-2027, to support domestic producers of biodiesel and renewable energy.

Forestry

• $700M allocated over two years to the Business Development Bank of Canada for loan guarantees to assist the forestry and lumber sector to transform and remain competitive. 

• $500M allocated over three years to renew and expand Natural Resources Canada’s forestry programs focused on market and product diversification.

Business Incentives

• CanExport – $68.5M allocated over four years to assist businesses and associations with export marketing and export business development expenses. 

• SME Export Readiness Initiative – $46.5M allocated over four years to support training for small- and medium-sized enterprises with limited export experience.  

• Accelerated Investment Incentive – Reinstatement of this program to provide enhanced first-year write-offs for most capital assets. 

• Immediate Expensing – Provides a 100% first-year write-off on manufacturing or processing machinery or equipment; clean energy generation and conservation equipment, including zero-emission vehicles; productivity-enhancing assets, including patents, network infrastructure, and computers; and capital expenditures for scientific R&D. 

• Scientific Research and Experimental Development Fund (SR&ED) – Enhancing the enhanced tax credit expenditure limit for this program by increasing the threshold of the fully refundable tax credit to 35% and the annual expenditure limit from $4.5M to $6M, as well as streamlining the approval process for claims.  

• Defence and Security Business Mobilization Program – $1B allocated to the Business Development Bank of Canada in 2025-2026 to provide loans, capital, and advisory services to small- and medium-sized enterprises to create new defence and security capabilities, as well as $656.9M allocated over five years to develop and commercialize civilian-military technologies, including aerospace, automotive, marine, AI, biodefence, and life sciences. 

Infrastructure

• Communities Strong Fund – $51B allocated over 10 years to fund a wide range of infrastructure projects for provinces, territories, and municipalities, including: 

• $17.2B over 10 years to provinces and territories for housing-enabling infrastructure, hospitals, colleges, and universities. 

• $5B over three years for a Health Infrastructure Fund. 

• $6B over 10 years for a Direct Delivery Stream for regional projects, building retrofits, and community infrastructure. 

• $27.8B over 10 years for a Community Stream, previously known as the Canada Community Building Fund, to support local infrastructure projects. 

• Trade Diversification Corridors Fund – $5B allocated over seven years to support transportation infrastructure projects that will enhance export diversification; this program will primarily back ports, airports, and railway infrastructure. 

• Arctic Infrastructure Fund – $1B allocated over four years to support major transportation projects, including airports, seaports, roads, and highways. 

• Canada Infrastructure Bank – Increase capital from $35B to $45B, enabling greater investments in nation-building projects, regardless of sector or asset class. 

• First Nations Water and Wastewater Enhanced Program – $2.3B over three years to renew this program to support infrastructure projects. 

Critical Minerals

• Critical Mineral Sovereign Fund – $2B allocated over five years to fund strategic investments in critical minerals projects and companies. 

• First and Last Mile Fund – $371.8M over four years to support the development of critical mineral projects and supply chains; this fund will absorb the Critical Mineral Infrastructure Fund to leverage resources to $1.5B by 2029-2030. 

• Critical Mineral Exploration Tax Credit – Expanded program eligibility to include an additional 12 critical minerals. 

• $443M over five years to support the development of innovative critical minerals processing technologies and joint investments with allies in critical minerals to support national security. 

Clean Technology and Energy Savings

• Expanded eligibility for clean economy investment tax credits, including the Clean Electricity Investment Tax Credit and the Carbon Capture, Utilization and Storage (CCUS) credits. 

• Clean Technology Demonstration Initiative – $39.9M allocated over four years to assist in bringing clean technology to foreign markets. 

Technology

• $925.6M allocated over five years to support investment in large-scale public AI infrastructure, including the development of a Sovereign Canadian Cloud.  

• IP Assist & Elevate IP Programs –$75M allocated over three years to extend the IP Assist Program and $84.4M over four years to extend the Elevate IP Program. 

• Innovation Partnership Program and Canadian Technology Accelerator – $7.6M over four years to support companies to scale-up exports.  

Training and Skills Development

• 175,000 job placements will be facilitated in 2026-2027 through the Student Work Placement Program ($635.2M over three years), Canada Summer Jobs ($594.7M over two years), and the Youth Employment and Skills Strategy ($307.9M over two years). 

• Labour Market Development Agreements – $570M over three years for agreements with provinces and territories to support training and employment assistance for workers impacted by tariffs and global market shifts. 
  
  
• Union Training and Innovation Program - $75M over three years to expand this program to support union-based apprenticeship training.

Tariff Relief

• Pivot to Grow – $231M on an accrual basis over five years to supplement this existing $500M program through the Business Development Bank of Canada for small- and medium-sized steel businesses facing liquidity challenges. 

• Strategic Response Fund – $5B allocated over six years to assist tariff-impacted firms across sectors and regions to adapt, diversify, and grow, including $1B to support the steel industry’s transition away from dependency on US trade. 

• Regional Tariff Response Initiative – Up to $1B allocated over three years through grants and interest-free loans to support businesses across sectors that have been impacted by tariffs. 

• Large Enterprise Tariff Loan – $10B to support Canadian firms affected by actual or potential tariffs and countermeasures. 

• Trade Impact Program – $5B allocated over two years through the Export Development Canada fund to support exports, including credit insurance, export, and foreign currency guarantees. 

Other Programs

• Venture and Growth Capital Catalyst Initiative - $1B allocated over three years to the Business Development Bank of Canada to leverage capital participation and invest in important sectors such as the life sciences. 

• Foreign Credential Recognition Action Fund – $97M allocated over five years to improve foreign credential recognition with all provinces and territories, focusing on the health and construction sectors. 

• Airports Capital Assistance Program – $55.2M over four years, starting in 2026-2027, to support safety-related infrastructure projects at local and regional airports. 

• New Horizons for Seniors Program – $70M annually to fund senior programs in local communities, helping to improve quality of life and promote full participation in Canadian society. 

• Building Communities through Arts and Heritage Program – $21M allocated over three years to support local festivals and community projects. 

• Canada Arts Presentation Fund – $46.5M allocated over three years to support arts festivals and preforming arts series. 

• Canada Media Fund – $127.5M allocated over three years, starting 2026-2027, to support audio-visual content creators. 

• Canada Music Fund – $48M allocated over three years to enhance and strengthen the Canadian music sector. 

Key Takeaways

The release of a new Federal Budget considerably impacts businesses and organizations of all sizes and industries across Canada. Consider the 2025 Federal Budget the North Star for project planning and investment priorities for 2025 and 2026, and be proactive. Take full advantage of the opportunities made possible by the new budget by following these practical steps:

• Plan ahead. Take note of upcoming industry-specific grant programs announced in the budget. Mark relevant intake periods on the calendar as they become available and assume that application development will require lead time well in advance of the intake deadline.  
  
  
• Align organizational projects with federal priorities. Funding applications are scored on a merit-based system, so it is essential to align organizational projects with the specific grant program’s priorities. Projects aligned with the program priorities (and the federal priorities articulated in the 2025 Budget) will earn higher application scores and result in a competitive advantage to successfully receiving funding. 
  
  
• Collaborate with a trusted partner. GrantMatch has the expertise to develop proactive funding strategies that align with government priorities, giving GrantMatch clients the distinguishing features they need to stand out against the competition. Contact the GrantMatch team today to increase the odds of funding success and experience the difference long-term grant strategies make on an organization’s bottom line.