Grant stacking: combining programs without losing them

A founder finds two programs that both fit a project and assumes the business can claim both. Often it can. But grant stacking has rules, and they are set program by program. Get them wrong and a program will reduce its contribution, or ask for money back after the project is done.

The rules are not hidden. They sit in each program’s applicant guide, usually under a heading about other funding or total government assistance. The trouble is that each program draws the line in a different place, and counts different things against it.

What grant stacking means

Stacking is using more than one source of government assistance for the same project. Programs rarely forbid it. Instead, they set a ceiling on the total share of project costs that all governments together may cover, and they reduce their own contribution if you go over.

That ceiling usually counts every level of government. A federal program will look at provincial and municipal money too, and often at money from Crown corporations.

The limits differ by program

Three programs show how much the rules vary.

CanExport SMEs. The 2026-27 applicant guide for this federal export program says it funds up to 50% of eligible costs, and that total government assistance cannot exceed 75% of total project costs. Funding from federal departments, Crown corporations, and provincial, territorial and municipal governments all counts towards that limit.

Business Scale-up and Productivity. Pacific Economic Development Canada (PacifiCan) offers interest-free repayable contributions to incorporated businesses in BC. Its funding overview states that any government assistance applied to project costs may reduce BSP funding to keep total government support at no more than 50%. That assistance includes Scientific Research and Experimental Development (SR&ED) credits and other federal or provincial tax credits.

B.C. Employer Training Grant. The provincial training grant takes a different approach. Its frequently asked questions explain that you cannot receive ETG funding when training costs are already covered by another funding source, such as a government grant or bursary. You can still apply to the ETG for any costs that another source does not cover.

The same project could sit under a 75% ceiling in one program and a 50% ceiling in another. The lowest applicable ceiling is the one that binds.

A simple worked example

Take an illustrative export project with $100,000 in eligible costs. CanExport could fund up to 50%, or $50,000. Suppose a provincial program also agrees to cover $30,000 of the same costs.

Together that would be $80,000, or 80% of the project. CanExport’s ceiling is 75%, so total government assistance can be no more than $75,000. With $30,000 already coming from the province, CanExport’s share would drop to $45,000. The business still gains from stacking, but by less than it expected.

The lowest applicable ceiling is the one that binds.

Tax credits count too

Owners often forget that tax credits are a form of government assistance, and that the relationship runs both ways.

PacifiCan counts SR&ED and other tax credits towards its 50% limit, and advises applicants to exclude SR&ED-eligible costs from a BSP application when possible.

In the other direction, the Canada Revenue Agency explains that SR&ED is meant to give incentives on the net costs of performing SR&ED. Government assistance, which the policy defines to include a grant, subsidy or forgivable loan, reduces the qualified SR&ED expenditures of the project it relates to. A grant for research work can therefore shrink the tax credit on that same work.

Neither effect is a reason to avoid either program. It is a reason to plan them together, with your accountant, before the first application goes in.

Your own share has to be real

Programs that fund part of a project expect the business to fund the rest, and they check. PacifiCan’s BSP overview lists what it will not accept as confirmation of the applicant’s funding: forecasted revenues, accounts receivable, commitments for future funding, and SR&ED credit receivables. A stacking plan that relies on a tax refund to cover the business’s own share may not pass that test.

Repayable money also counts. BSP contributions are interest-free, but they are repaid in monthly instalments over five years, starting one year after the project ends. They still count as government support on the project, and the repayments belong in your cash-flow forecast.

Grant stacking without losing funding

A few habits prevent most stacking problems.

Build a funding map. List every cost line in the project and assign each one to a single source: a specific program, a tax credit, a loan or your own money. No cost line should be claimed twice.

Find the ceiling for each program. Note each program’s limit on total government assistance and what it counts. Work out the binding ceiling for the project as a whole.

Disclose every source. Name all government funding in every application, including amounts you have applied for but not yet received. A program that learns about other funding late is more likely to reduce or recover its contribution.

Respect each program’s start date. CanExport’s guide says it does not cover costs incurred, invoiced or paid before the date the project is submitted in the application. Other programs set their own eligibility dates. Spending early can make costs ineligible everywhere.

Plan the cash. Many programs reimburse after you spend. BSP, for example, reimburses eligible costs up to four times a year. The business has to carry the costs in between.

A practical next step

Before you apply to a second program, build the funding map for the project and check it against each program’s ceiling. If the numbers only work when every program pays its maximum, change the plan now rather than after an approval letter.

Our Funding & Grants practice prepares funding maps and applications that hold up when programs compare notes. If you are combining programs on a current project, start a conversation.

Sources

1. “CanExport SMEs 2026-2027: complete applicant’s guide”, Trade Commissioner Service, Government of Canada. https://www.tradecommissioner.gc.ca/en/our-solutions/funding-financing-international-business/canexport-smes/applicants-guide-2026-27.html
2. “BSP: Funding overview”, Pacific Economic Development Canada. https://www.canada.ca/en/pacific-economic-development/services/funding/business-scale-up-productivity/bsp-funding-overview.html
3. “Frequently Asked Questions: B.C. Employer Training Grant”, WorkBC, Province of British Columbia. https://www.workbc.ca/find-loans-and-grants/industry-and-employers/bc-employer-training-grant/frequently-asked-questions
4. “Assistance and Contract Payments Policy”, Scientific Research and Experimental Development Tax Incentive Program, Canada Revenue Agency. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/assistance-contract-payments-policy.html