Exploring Financial Support for Innovation: DCC and CIT Programs for Ontario SR&ED Claimants

July 31, 2025 The InGenuity Group

The Scientific Research and Experimental Development (SR&ED) program is one of Canada’s most generous and widely used tax incentive programs. While SR&ED is federally supported, there are also provincial programs that further encourage research and development activities. In Ontario, two strong examples are the Digitalization Competence Centre (DCC) and Critical Industrial Technologies (CIT) programs. Both are administered by the Ontario Centre of Innovation (OCI) and provide meaningful financial support to help small and medium-sized enterprises (SMEs) advance their technological capabilities. For companies already engaged in SR&ED, these programs offer complementary funding opportunities that can further bolster innovation and competitiveness in Ontario.

Digitalization Competence Centre (DCC) Program

The DCC program is designed to provide financial support to SMEs in their digital transformation journey through two distinct phases: the Digital Modernization Adoption Plan (DMAP) and the Technical Demonstration Program (TDP). This program specifically targets for profit SMEs in Ontario with fewer than 500 employees and annual revenues exceeding $500,000. The OCI states that the purpose of this program is:

[…] driving the digital modernization of Ontario SMEs by:

Supporting digital literacy through education, coaching and training to help SMEs understand the benefits of digital adoption and supporting them in the development of a Digital Modernization and Adoption Plan (DMAP) for their company

Accelerating digital adoption by providing SMEs with support to adopt new equipment and processes through the Technology Demonstration Program

Enhancing technological capacity in both companies and sectors that have the potential for further digitization

Supporting the commercialization of Made-in-Ontario technologies by connecting companies looking to adopt digital technologies with Ontario technology firms¹

1. Digital Modernization Adoption Plan (DMAP) Phase:

This initial phase focuses on digital consulting. It offers 50% grant funding for projects with a maximum value of $30,000, translating to a potential grant of $15,000. The OCI states that the DMAP program is meant to support Ontario businesses to:

[…] better understand their organization’s technology needs, guide their digital transformation decision-making, and optimize their technology investments. Through this program, SMEs work with a Digital Adoption Consultant to generate a Digital Modernization and Adoption Plan tailored specifically to their organization’s digital needs.²

The DMAP phase, with a timeline of three months, helps companies identify and strategize digital improvements that promise a decent return on investment, such as: ERP implementations and optimizations, manufacturing automation, and AI projects. However, the DCC program does not fund activities primarily related to marketing or promotion, including advertising campaigns, SEO, website development, market research, or the creation of marketing materials such as digital ads, landing pages, or online content. Full program details can be found on the official DCC guidelines PDF.

The OCI’s TDP Program Guidelines delve further into the program eligibility and inner workings, and they have detailed the possible expenses which can be claimed in their Eligible Expenses Guidelines.

2. Technical Demonstration Program (TDP) Phase:

Following the consulting phase, the TDP phase supports the implementation of identified digital improvements. The OCI states:

The Technology Demonstration Program supports Ontario SMEs that have completed a DMAP project to adopt and implement the digital technology identified in their DMAP, accelerating growth of the SME, while supporting the commercialization of Made-in-Ontario digital technologies.³

This phase also offers 50% grant funding, with a project value cap of $300,000, allowing for a reimbursement of up to $150,000. The TDP phase has a six-month timeline, focusing on the practical realization of digital strategies. Full program details can be found on the official TDP guidelines PDF.

Don’t miss out on a potential reimbursement of $165,000. Read more about the DCC programs and take advantage if you are able!

Critical Industrial Technologies (CIT) Program

The CIT program initiative “offers a collection of 5 programs to drive critical technology adoption across four Ontario industries.“⁴ The program provides not only financial support but also access to beneficial resources. The four industries include: Mining, Advanced Manufacturing (non-auto), Agri-Food, and Construction. Like the DCC, it targets for profit SMEs in Ontario with similar employee and revenue criteria. The five programs include the “Talent Development Internship”, the “Future Ready Program”, the “Development & Commercialization Program”, the “Technology Access Program” and the “Sector Adoption Program”.

Talent Development Internship

This program encourages eligible SME’s to “invest in the industrial workforce by hiring new talent for Critical Technology internships“.⁵ The Talent Development Internship Program provides up to $20k in OCI support ($10k for each 4-month unit) to support companies hiring new interns for suitable projects.⁶ The eligibility requirements for this program are as follows:

“Open to Ontario-based for-profit Small- and-Medium-Enterprises less than 500 staff.
Recent graduates from an undergraduate or master’s program from an accredited college/university (within three years of graduation).
2 unit maximum per company (each 4-month internship is 1 unit)
Intern must be involved with at least 1 named Critical Technology in 1 key sector
Maximum $20k funding per company
Matching of funds 1:1 by SME“⁷

Future Ready Program

This program encourages eligible SME’s to “equip their employees for the challenges of technology today through upskilling initiatives.“⁸ The program provides up to $10k in matched funding for companies to hire external third-party subject matter experts to train their employees in the adoption and implementation of Critical Technologies. The eligibility requirements are as follows:

“Open to Ontario-based for-profit Small- and-Medium-Enterprises less than 500 staff.
Training must focus on at least 1 of the named Critical Technologies.
SMEs should operate in or supply solutions to at least one of the named key sectors.
Maximum of $10k funding per company (no limit on number of employees to be trained)
Matching of funds 1:1 by SME“⁹

Development & Commercialization Program

This program encourages SME’s to “commercialize faster through exclusive, no cost access to a Technology Development Site (Dev Site).“¹⁰ This program offers up to $100k of OCI support in addition to Dev Site access and the eligibility requirements are as follows:

“Open to Ontario-based for-profit Small-and-Medium-Enterprises (less than 500 staff).
SME solution must incorporate at least one of the named Critical Technologies.
Required usage of at least 1 Dev Site for a minimum of 2 hours.
Six months maximum of Dev Site access.
Funding to be matched 1:1 by applicant company.
Optional strategic partner.“¹¹

Technology Access Program

This program encourages “SMEs with an existing Critical Technology product or service can break into new markets faster through exclusive, no-cost access to a Technology Development Site (Dev Site).“¹² The eligibility requirements for this program are as follows:

“Open to Ontario-based for-profit Small- and-Medium-Enterprises less than 500 staff.
SME solution must incorporate at least one of the named Critical Technologies.
Required usage of at least 1 Dev Site for a minimum of 2 hours. Maximum site access six months.“¹³

Sector Adoption Program

Through this program “Consortiums led by an Ontario SME can collaborate on province-wide innovations to catalyze industrial transformation.“¹⁴ Projects are eligible for up to $1M in funding from OCI, and at the end of the project, companies will demonstrate their solution and potential for wide-scale adoption. The eligibility requirements for this program include:

“A consortium must include 1 Lead Applicant and at least 1 Primary Partner with market pull.
Lead applicant must be an Ontario-based for-profit Small-or-Medium Enterprise – less than 500 employees.
Primary partner does not need to be Ontario-based
Applicant solution must incorporate one of named Critical Technologies
Funding to be matched 2:1 by applicant company“¹⁵

Strategic Stacking of DCC and CIT Programs

One of the most attractive features of the DCC and CIT programs is the ability to stack them. With a potential of financial support up to $165,000 from the DCC program and $1,130,000 from the various CIT programs, allowing for a potential reimbursement of $1,295,000. This strategic stacking provides a substantial financial boost, enabling companies to undertake comprehensive digital and technological projects that might otherwise be financially unfeasible.

Stacking with SR&ED

The stacking of the DCC and CIT financial support with SR&ED tax credits can also provide a powerful financial strategy for companies looking to maximize their innovation funding. Here’s how companies can effectively combine these programs:

Complementary Funding: While SR&ED provides tax credits for eligible R&D activities, the DCC and CIT programs offer direct grants for specific digital transformation and technological innovation projects. By leveraging both, companies can cover a broader range of project costs. For example, SR&ED can offset expenses related to experimental development and research, while DCC or CIT grants can support the implementation or demonstration phases of the technology.
Project Segmentation: Companies can strategically segment their projects to align with the eligibility criteria of each program. The initial R&D phase might be claimed under SR&ED, while the later stages—such as digital modernization or technical demonstrations—can be funded through DCC or CIT. This segmentation allows for more complete coverage across the project lifecycle.
Enhanced Cash Flow: Combining these programs can significantly improve cash flow. SR&ED offers tax credits, often resulting in refunds, while DCC and CIT provide upfront grants. This blended approach reduces the financial burden, enabling companies to reinvest in ongoing innovation and growth.
Broader Scope of Innovation: Access to multiple funding sources allows companies to pursue more ambitious, integrated projects. SR&ED supports R&D efforts, while DCC and CIT emphasize digital and industrial innovation. Together, they enable end-to-end innovation initiatives that may otherwise be financially prohibitive.
Strategic Planning and Compliance: Effectively stacking these programs requires careful planning and compliance. This includes maintaining detailed documentation of activities and expenses, aligning with each program’s eligibility criteria, and potentially working with innovation funding experts to optimize claims and applications.
Risk Mitigation: Diversifying funding sources reduces dependency on any single program. If one program changes its criteria or budget, alternative sources ensure continuity of funding, protecting the company’s innovation pipeline.

Conclusion

In summary, stacking the DCC and CIT programs with SR&ED offers a comprehensive funding strategy that can significantly enhance a company’s capacity for innovation. By strategically aligning project phases with the strengths of each program, companies can maximize financial support, improve cash flow, and drive meaningful growth.

For businesses already benefiting from SR&ED, the DCC and CIT programs provide an excellent opportunity to further accelerate innovation and digital transformation. By leveraging these provincially funded initiatives, SMEs can strengthen their technological capabilities while achieving notable cost savings. As the innovation landscape evolves, these programs offer a strong framework for staying competitive and agile.

Engaging with these programs could be a pivotal move in your company’s innovation strategy. For more insights, read our article “Government Support Doesn’t Mean Less Government Funding” to learn how both government and non-government assistance impact your SR&ED claim—and how to optimize your approach.

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