Dairy Innovation and Investment Fund - Applicant Guide

Applicant Guide

September 29, 2023

Purpose of this guide

This guide will:
1.    help you determine if your company and your project may be eligible for funding under the Dairy Innovation and Investment Fund (DIIF);
2.    provide information on various aspects of the DIIF.

Table of contents

1.0 About the Dairy Innovation and Investment Fund

The Dairy Innovation and Investment Fund (DIIF) aims to assist the sector in making investments in dairy processing plants to increase competitiveness over the long-term and adapt to new market realities. 

The Canadian Dairy Commission, a federal Crown corporation under the Agriculture and Agri-Food portfolio, is responsible for the delivery of the Dairy Innovation and Investment Fund on behalf of Agriculture and Agri-Food Canada.

The overall budget from April 1, 2023, to March 31, 2033, is up to $333 million, which includes $5 million for program administration, and up to $33 million in unclaimed Dairy Direct Payment Program funds.

Funding for projects under this program is distributed among regions as follows (approximation):

Caption text
Regions Approximate funding* (millions)
West (British-Columbia, Alberta, Saskatchewan, Manitoba) $74
Ontario $127
Québec $109
Atlantic (New-Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador) $18

*Unused funds may be reallocated from one region to another.

Program objectives

The objective of DIIF is to provide Canadian dairy processors with non-repayable contributions to make investments to help the supply-managed dairy sector better manage the structural surplus of solids non-fat in Canada.

More specifically, the Fund will help the sector modernize, replace and increase solids non-fat processing capacity and minimize non-marketed skim milk. Support will also target innovative investments that increase the value of solids non-fat.

1.1 Eligible applicants

Eligible applicants are for-profit organizations, including corporations, cooperatives and partnerships, and are Canadian dairy product manufacturers who process milk. Only projects involving milk from cows are eligible. 

Applicants Footnote 1

  • must hold a valid federal or provincial licence to carry out activities with respect to dairy processing.  New legal entities involving partnerships between existing Canadian processors are also eligible.
  • are federally or provincially registered legal entities capable of entering into legally binding agreements.

1.2 Eligible projects

Only investments in building facilities and equipment that result in a NET increase in solids non-fat processing capacity for the purpose of the program objective will be considered.
To be eligible:

  • The project must, in the case of building of new facilities: result in a NET increase in solids non-fat processing capacity of at least 50 million litres of skim milk per year, organization-wide Footnote 2 in Canada. By way of example, if a new facility replaces an existing facility, it must create a NET additional processing capacity of at least 50 million litres of skim milk per year.
  • The project must, in the case of projects involving the replacement of existing equipment coupled with an increase in capacity or in the case of an expansion of an existing facility: result in a NET increase in solids non-fat processing capacity of at least 25% and 30 million litres of skim milk per year compared to the current facility AND organization-wide Footnote 2 in Canada. The project must create additional capacity that does not replace a reduced capacity in another facility owned by the applicant. Applicants can combine different type of projects in the same plant to reach the minimum volume requirement.
  • The applicant must receive assurance from the marketing board of the pool where the project is located that the milk for this project is either available or has the potential to be made available, either within the facility’s current supply or through other means. 
  • Demonstrate there is a market for all milk components.

1.3 Ineligible projects

The following types of projects are not eligible:

  • projects aimed at processing milk components that are not considered part of the structural surplus, such as butterfat, whey, permeate or buttermilk.
  • projects related strictly to the processing of milk from species other than cows such as ewes, goats or water buffalos. 
  • projects related strictly to dairy-free products or dairy-free alternatives such as those made from soybeans, rice or nuts.
  • projects aimed at replacing existing equipment without an increase in capacity. 

1.4 Funding and cost-sharing

Available funding

Contributions under the program are non-repayable. The maximum contribution under the DIIF is $75 million per project or the funds available in the region of the project, whichever is lower. Applicants may use the table below to estimate the maximum DIIF contribution that they may receive if their project is accepted.

Table 1

Caption text
Project types

Example 1
New processing facility

Example 2
Expansion of an existing facility
Example 3
Replacement of equipment and increase capacity
(no construction)
Building construction Footnote 4
(# of litres x $0.10/litre)
Equipment, installation and other eligible costs (# of litres of new capacity x $0.30/litre)      
Equipment, installation and other eligible costs to replace existing equipment (# of litres of current capacity x 50% x $0.30/litre) N/A N/A  
Maximum contribution (the lowest of this amount or $75M or the funds available in the province where the project is located)      

Table 2

Caption text
  Examples of maximum DIIF contributions
Example 1

A new facility with an additional net capacity of 50 million litres of skim milk per year for the entire organization

  • Building construction: 50 million litres x $0.10/litre = $5 million
  • Equipment, installation and other eligible costs: 50 million litres x $0.30/litre = $15 million
  • Maximum contribution: $20 million
Example 2

A new facility with an additional net capacity of 300 million litres of skim milk for the entire organization. Due to its size, this project will reach the $75 million maximum contribution ($17 million in the case of the Atlantic provinces and $74 million in the West).

  • Building construction: 300 million litres x $0.10/litre = $30 million
  • Equipment, installation and other eligible costs: 300 million litres x $0.30/litre = $90 million
  • Maximum contribution: $75 million (or the regional funding, whichever is lower)
Example 3

A facility with 150 million litres capacity that increases its processing capacity by a minimum of 25% and 30 million litres of skim milk for a total of 187.5 million litres (addition of 37.5 million litres) and requires the expansion of an existing building.

  • Building construction: 37.5 million litres x $0.10/litre = $3.75 million
  • Equipment, installation and other eligible costs: 37.5 million litres x $0.30/litre = $11.25 million 
  • Maximum contribution: $15 million
Example 4

A facility with 150 million litres capacity that is replacing its current equipment AND increasing capacity by a minimum of 25% and 30 million litres of skim milk for a total of 187.5 million litres of skim milk without the need for a new building.

  • Building construction: $0
  • Equipment, installation and other eligible costs for increased capacity: 37.5 million litres x $0.30/litre = $11.25 million 
  • Equipment, installation and other eligible costs to replace existing capacity: 50% x 150 million litres x $0.30/litre = $22.5 million
  • Maximum contribution = $11.25 million + $22.5 million = $33.75 million or the regional funding, whichever is lower.

Eligible Activities 

  • Removal and disposal of existing equipment.
  • Purchase, shipment, installation, and commission of new equipment, software and production lines.
  • Installation of new or expansion of existing milk reception and milk storage area as required to meet the objectives of the project.
  • Retrofits or renovations of existing facilities related to the installation and operation of eligible equipment.
  • Construction of a new facility.
  • Training necessary to operate eligible equipment.
  • Translation of materials related to training on the new equipment.

Eligible costs (Refer to Appendix A: Project costs, for definitions)

The following costs are eligible if they are reasonable and directly related to the project, the objectives of the program and eligible activities:

  • Capital assets.
  • Contracted services.

Costs related to the purchase of land and research and development are not eligible. For more information on cost limitations, refer to Appendix A: Project costs.

Cost sharing

The DIIF contribution may not exceed 33% of eligible project costs. The contribution for construction costs will be up to 25% whereas the contribution for other eligible costs will be up to 33%. These levels of contribution are taken into account in tables 1 and 2 above.

  • The applicant’s portion of the cost-share must be cash contributions.
  • In-kind contributions are ineligible.

What is a cash contribution?

A cash contribution is an expense requiring a cash payment, by either your organization or by a participant/contributor (such as a partner or other government program), during the term of the contribution agreement. Specifically, a cash contribution is an expense for an eligible project cost incurred and paid for by your organization, or another project participant.

The DIIF will only reimburse cash contributions for eligible project costs that are incurred and paid for by your organization. A cash contribution made by another project participant should be reported as part of your sources of funding and must be for an eligible project cost.

What is an in-kind contribution?

In-kind means the fair market value for goods and the fair value of services that require no cash payment during the term of the contribution agreement by you or a contributor.

Stacking limit

The stacking limit refers to the maximum level of Canadian government funding that an applicant can receive towards the total eligible costs of a project. The total government funding (federal, provincial/territorial, and municipal governments) will not exceed 85% of eligible project costs.

Basis of payments

Payments to recipients will be made based on the reimbursement of eligible costs that have been incurred and paid by the applicant as set out in the contribution agreement. The recipient will need to show proof of payment of those costs.

Payments to recipients in the form of advances towards eligible costs may be possible and shall be limited to immediate cash requirements and subject to provisions as set out in the contribution agreement. 


The program will consider costs eligible for reimbursement as of November 17, 2022, if the project summary form is received on or before November 3, 2023. For possible future rounds of applications, costs will be considered eligible for reimbursement as of the date the CDC receives a complete application. A confirmation of the date the application has been deemed complete will be provided by the CDC. 

Any costs incurred prior to the signing of a contribution agreement would be incurred at the applicant's risk without obligation of reimbursement by the CDC.

1.5 Application process

A)    How to Apply

The Dairy Innovation and Investment Fund has a 2-stage application process:

Stage 1:    Complete a Project Summary Form
Stage 2:    Complete a Project Application Package

Stage 1: Complete a Project Summary Form

The Project Summary Form helps to determine your project's eligibility and alignment with program criteria and priorities. 

Complete and submit, by November 3, 2023, a Project Summary Form found on the Program website. 

Please contact the program if you need help to complete and submit the Project Summary Form.

Following the submission of your Project Summary Form, a Program Officer may contact you to discuss your project. You may be invited to submit a Project Application Package.

Stage 2: Complete a Project Application Package

If you are invited to submit a Project Application Package, a Program Officer will send you the forms and instructions to submit a complete application. You will have approximately 60 calendar days to complete your Project Application Package.

Once you submit your application, you will be notified if your application is complete or if there is missing information. If your application is incomplete, you will have 30 business days to provide the missing information before your file is closed. The following supporting documents are required as part of a complete application:

  • Application form.
    • The applicant’s Declaration of the following: (i) all amounts owing to the Government of Canada, (ii) that any lobbyists engaged by the applicant for the purposes of obtaining contribution funding under the program are registered under the Lobbying Act, (iii) the absence of any Conflict of Interest relative to the Conflict of Interest Act, Values and Ethics Code for the Public Sector, the Conflict of Interest Code for Members of the House of Commons, and any applicable values and ethics code or applicable federal policy, and (iv) consent for the Canadian Dairy Commission to disclose business and/or personal information to third parties, Agriculture and Agri-Food Canada or other levels of government for the purposes of determining program eligibility under this or different programs or initiatives;
  • Project Work Plan listing all activities with detailed descriptions of the work to be undertaken and performance objectives.
  • Detailed Budget for the project, with forecasted total costs by cost category and by fiscal year (from April 1 to March 31).
    • Include copies of quotes, estimates and/or contracts supporting the costs of the project.
  • Project Details, including;
    • For existing facilities, proof of skim milk processing capacity.
    • Letter of assurance from the marketing board of the pool where the project is located that the milk for this project is either available or has the potential to be made available, either within the facility's current supply or through other means.
    • If available, copies of dairy product(s) market studies. For example, marketing plans identifying the products being sold and targeted market segments.
    • Financing plan and copies of the related financing agreements if available.
  • Two complete financial statements (which will cover 3 years of revenues) including the balance sheet, income statement, and statement of cash flow.
  • Copy of processing licence.
  • Copy of certificate or articles of incorporation.
  • For Quebec-based organizations, proof of compliance with the M-30 Act, if applicable. 
  • Additional supporting documentation deemed required for the program and supplementary to the completed application form.

After you submit your application, the CDC will send you an acknowledgement notice. You should not consider your application as submitted to the program until you receive the acknowledgement of receipt.


Please note that an invitation to submit an application to the program does not constitute an offer of funding. Also, even if a project meets all eligibility criteria, the submission of an application creates no obligation on the part of Government of Canada or CDC officials to provide funding for the proposed project. The Government of Canada retains discretion to determine, based on other public policy and public interest considerations, whether an application that meets the criteria identified in this Guide will ultimately receive funding.

All complete applications received are evaluated based only on the information submitted by the applicant.


Applicants have until November 3, 2023, to submit their Project Summary Form. Additional application dates may be announced in the future should there be funds remaining.

The program ends on March 31, 2033, and all projects must be completed prior to that date. The DIIF will not issue payments for expenses incurred or paid by the recipient beyond March 31, 2033.

B)    Application review

An assessment of your complete application package against the objectives of the program will be carried out using the program’s assessment criteria (see 2.0 – Assessment criteria). 

The assessment will be conducted by CDC internal and external experts and the project will be assessed, scored, and ranked by an independent review committee which will recommend projects for approval and/or rejection to the CDC. 

At any point after you apply, we may contact you for more information.

C)    Application approval

Should your application be approved, you will be invited to enter into a contribution agreement with the CDC.

2.0 Assessment criteria

Once the eligibility of the applicant and project have been established, proposed projects will be assessed, scored and ranked based on their overall relevance with respect to the objectives of the program and against the following criteria:

Criteria related to the expected outcomes of the project

  • Increase in the capacity to process solids non-fat
  • Reduction of the structural surplus of solids non-fat
  • Value-added of the proposed finished product
  • Age of the existing facilities to be upgraded or replaced (if applicable)
  • Expected impact of the project on producer revenues
  • Expected reduction of milk transportation costs as a result of the project
  • Strategic impact of the project relative to the geographic location of the solids non-fat surplus
  • Environmental sustainability

Criteria related to the applicant’s qualifications and feasibility of the project

  • The applicant’s financial, managerial and technical capacity to successfully complete the project and track record as it relates to completing the project
  • The expertise and experience of the general contractor
  • The organization’s financial health and the realistic financing plan in place for the project
  • The targeted market segments and expected return on investment
  • The reasonableness of proposed activities and timelines, including related activities that may not be supported by this program but that are necessary for the project’s success, such as the organization’s plans to maintain its infrastructure/equipment after the project is completed
  •   The reasonableness of the proposed equipment and costs
  • The flexibility of the facilities proposed to adapt to market demands and produce various products
  • Project risks and their mitigation measures
  • Trade compatibility (if applicable)

3.0 Reporting on your project

Should you be approved for funding, you will be required to report on progress, performance, and finances. These reports include:

Progress reports
You will be required to provide progress reports describing the progress made towards deliverables and activities completed, as described in your contribution agreement.

Performance reports
Once your project is completed, you will be required to provide performance reports on an annual basis for a minimum of 2 consecutive years. The reports will track progress against mutually agreed upon performance measures outlined in the contribution agreement.

Financial Reports
Financial reporting will be required with each request for reimbursement of costs, in addition to year-end accounting and other financial reports. Other reports may be required at the CDC's discretion.

4.0 Considerations

4.1 M-30 Act (Quebec organizations only)

An Act Respecting the Ministère du Conseil exécutif (R.S.Q., c. M-30) may apply to Quebec applicants. More information on the Act is available online or by contacting the Ministère de l'Agriculture, des Pêcheries et de l'Alimentation (MAPAQ) at dpci@mapaq.gouv.qc.ca.

M-30 applies to various types of Quebec organizations. For example, organizations located in Quebec and receiving more than half of their financing from the Government of Quebec may be subject to the Act.

All Quebec-based organizations will have to demonstrate their compliance with the Act during the project assessment process, and prior to entering into a Contribution Agreement.

4.2 Impact Assessment Act (if applicable)

Some applications may require assessing and addressing compliance with the Impact Assessment Act

4.3 Intellectual property

Any intellectual property created or developed by or for the recipient resulting from the activities undertaken and described in the Work Plan will be owned by the recipient or by a third party, as may be negotiated by the recipient.

5.0 Contact information

For more information on the Dairy Innovation and Investment Fund, please contact the program by:
•    email: diif-fiisl@cdc-ccl.gc.ca
•    Telephone: 1-866-366-0676

Appendix A: Project costs

Eligible project costs – General principles

Eligible costs must be directly related to, and necessary for, successful completion of the approved project.

Eligible costs must be incurred and paid by the recipient (organization signing the Contribution Agreement with the CDC). Any other expenditure not specifically listed below as eligible or otherwise approved by the program may be considered as ineligible.

Eligible capital assets

Tangible assets that are purchased, constructed, developed or otherwise acquired and:

  • are required for the execution of the project. These include, but are not limited to, the construction of new buildings and the purchase of skimming equipment, evaporators, dryers and silos.
  • have a useful life extending beyond one fiscal year and are intended to be used on a continuous basis.
  • are not intended for resale during the life of the project. 

Eligible capital assets include costs related to the purchase of machinery, equipment, and related systems (such as software).
a.    May also include expenditures relating to the alteration or modernization of an asset that appreciably prolongs the period of usefulness of the item or improves its functionality.
b.    Eligible costs include the purchase price plus other acquisition costs, such as installation, freight, transportation, insurance and duties.

Eligible contracted services

Professional or specialized services for which a contract is entered into, such as:

  • construction costs of a new building.
  • costs for the removal and disposal of old equipment.
  • costs related to the installation and commissioning of machinery, equipment and related systems.
  • costs related to the retrofits or renovations to the processing facility required for the installation of the eligible equipment. A contract should be in place with a qualified contractor, including payment terms and deliverables.
  • cost of translation of materials related to learning how to use new equipment.
  • Recipients must use a fair and competitive or otherwise justifiable and generally accepted sound business process that results in competent and qualified contractors working on the project.

Ineligible project costs – General principles

All costs related to regular ongoing operational and managerial activities of the organization and any costs which cannot be directly tied to the project are considered ineligible. 

Notwithstanding that, the following costs may have been or may be reasonably and properly incurred and paid by the proponent during the execution of project activities, they are considered ineligible costs under the program:

Ineligible administrative costs

Administrative costs means costs related to:

  • project management: management and administrative staff wages, including those who negotiate service contracts, pay the invoices, manage the project budget, monitoring and/or prepare the claims and any financial or progress/performance reports for the project. 
  • administrative office supplies and expenses:
    • basic telephone fees (including fax lines) and cell phones
    • electricity, gas or other forms of energy required for the facilities
    • materials and office supplies (for example, pens, pencils, paper, envelopes, cleaning supplies, subscriptions)
    • monthly internet fees
    • postage and courier fees
    • office equipment (for example, computers, printers, photocopiers)
    • office space (rent) and related utilities
    • maintenance and property taxes
    • audit fees
    • bank fees
    • insurance
    • legal fees
    • other overhead type costs relating to the organization’s office.

Ineligible capital assets

Ineligible capital assets include:

  • equipment, machinery, material and all other costs not specifically required for the execution of the project, including equipment to process butterfat.
  • used or refurbished equipment.
  • rental and/or lease (including Capital and Operating leases) of facilities, equipment or machinery.
  • any portion of cost, or any cost or assistance that, in the Minister’s opinion, exceeds the fair market value for that cost item.
  • land, goodwill, and existing equipment or buildings owned by a related party.
  • costs related to the acquisition of land or buildings.
  • costs for any vehicle purchase, modification or leasing.

Ineligible contracted services

Professional or specialized services for which a contract is entered into for activities such as the preparation of a funding application, business plan or feasibility study.

Ineligible salaries and benefits

Salaries and benefits paid to or on behalf of the organization's staff to execute activities outlined in the project Work Plan or paid for the purpose of administering the project.

Ineligible travel costs

Travel costs directly related to the project, such as:

  • per diems (meals, incidentals and taxis)
  • accommodations
  • transportation, such as airfare
  • hospitality

Other ineligible costs

  • any cost, such as amortization, and working capital including provisions for contingencies and cash reserves, that would not result in a direct, out-of-pocket expense for the applicant
  • research and development costs
  • marketing, promotion and public relations expenses
  • permits and licences
  • taxes such as the Goods and Services Tax, value-added taxes
  • entertainment, gifts, and charitable donations