Canada Accelerator & Incubator Program (CAIP)

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A federal funding initiative supporting selected business accelerators and incubators across Canada to expand and enhance services helping early-stage innovative firms grow and become investment-ready.
What are the main aims and objectives?

CAIP was designed to establish a critical mass of best-in-class Canadian accelerators and incubators that can develop innovative, high-growth small and medium-sized enterprises (SMEs). Its objectives include expanding the capacity of these organizations to provide entrepreneurship support services, accelerate early-stage firms’ investment readiness, foster innovation commercialization, and strengthen the national ecosystem by addressing gaps in service provision. The program targets improving business and market development assistance, mentoring, networking, and training capabilities to enable Canadian startups to compete globally and scale sustainably.

How does the program work?

CAIP was delivered through a competitive funding process selecting 16 accelerators and incubators across Canada that demonstrated excellence and capacity to support startups. The program awarded non-repayable contribution funding, typically up to $5 million CAD per year, over a five-year period (2014–2019), with recipients required to provide matching investments of at least 1:1.

Selected organizations, including university-affiliated incubators, industry associations, and private accelerators, expanded their services through enhanced mentorship, commercialization coaching, market research guidance, networking events, training workshops, and physical space provision. Funded activities were designed to be incremental rather than supplant existing services, ensuring additional impact.

Eligible clients were largely micro and early-stage firms (under 10 employees, less than six years old), primarily in ICT and other innovation sectors, receiving tailored support to refine business models, validate markets, and prepare for investment.

CAIP program delivery involved NRC-IRAP managing contribution agreements, monitoring progress, and collecting annual data on client outreach and impacts. A dedicated advisory panel with venture capital experts guided organization selection to balance regional representation and quality. The program aimed to catalyze private investment, enhance ecosystem connectivity, and provide Canadian startups with globally competitive acceleration environments.

What is the overall cost?

CAIP received $100 million CAD (approximately USD 75–80 million) in federal appropriations over its five-year duration (2014–2019).

How was it implemented?

CAIP was conceived following the 2011 Canadian Expert Panel on R&D recommendations and officially announced in 2013 under the Government’s Venture Capital Action Plan. NRC-IRAP was designated as the delivery agency, developing tailored application and compliance processes distinct from its usual operations.

Following a 2013 RFP, nearly 100 applications were received, evaluated by an external advisory panel, and 16 recipients selected by late 2014, including BC Tech Association, Communitech, MaRS, Ryerson's DMZ, Invest Ottawa, and others.

CAIP operated from fiscal 2014 through 2019. Early implementation faced challenges adapting NRC-IRAP systems to accommodate large, multi-year contribution agreements, resulting in lengthy negotiation periods (average 82 days compared to a typical 20–30 days). Annual client and impact reporting were mandated, although data completeness improved only gradually.

Service delivery focused on expanding client bases, developing new programming for scale-up firms, and fostering private investment readiness. Client firms grew rapidly in revenue, employment, and capital acquisition during the program's tenure.

What impact has been measured?

Between 2014 and 2017, CAIP-funded organizations served 8,520 client firms, expanding average yearly new clients from 703 to nearly 3,000. Client firms were primarily micro and early-stage, with information technology dominating sectors. Program-supported firms saw total revenues increase from $159 million to over $2 billion CAD and equity investments grow from $77 million to over $1.2 billion CAD over three years—representing dramatic business growth and scaling.

Accelerators and incubators reported expanded capabilities, higher deal sizes, and broader sector coverage. Benefit-cost analyses found net economic benefits ranging from $47 million to $264 million CAD, with benefit-cost ratios between 1.2 and 2.2, evidencing the program’s positive economic return.

What lessons can be learned?

Two main implementation challenges were identified. First, the delivery of CAIP was more challenging than expected due to its complexity, which may be the result of insufficient time allocated for planning. NRC-IRAP was selected as the delivery mechanism for CAIP given their experience with contribution agreements. However, the NRC-IRAP infrastructure needed substantial adaptation to meet the new parameters required by CAIP. For example, negotiating the contributions for CAIP was much more time consuming relative to other agreements negotiated by NRC-IRAP. The development of new processes and guidelines took longer than anticipated, suggesting that CAIP was under-funded during the early implementation phase.

A second challenge was the complexity of reimbursing eligible expenses incurred by business incubators and accelerators. Evaluations indicated that the incubators and accelerators found the process complex and burdensome. Programme managers recognised the need for strong oversight but also found that reviewing claims was complex and time consuming, especially when most contribution agreements involved several parties.

Lessons for other ecosystems:

CAIP was a complex program to deliver but evaluations identified several positive outcomes. The program enabled accelerators and incubators to grow and deliver higher quality support, which enabled accelerators and incubators to impact a greater number of clients stimulating increased firm growth (e.g. revenue and investment) with positive spill-over effects for Canada’s economy.

Key lessons learned for the design and implementation of similar program include:

  • Allocate sufficient time for detailed planning and the development of administrative requirements and processes prior to the launch of new program similar to CAIP.
  • Allocate sufficient resources for program delivery after the level of effort required is well understood.
  • Specify clear reporting requirements (in accordance with a well-defined performance framework) prior to executing contribution agreements. In the years following the introduction of CAIP, a performance measurement framework for accelerators and incubators was developed. The government of Canada required that business accelerators and incubators receiving public support report against this framework.
  • Develop a concerted performance data collection approach among supported programs and other innovation and capacity building programs. For programs such as CAIP in which beneficiaries engage through an intermediary, a concerted approach is necessary to ensure that information is available to assess the value of government investments.

CURATED BY

Cristina Fernandez

Director for Knowledge + Programming
Global Entrepreneurship Network
United States