Challenges aim to solve big problems, accelerate progress towards ambitious goals, and have a history of producing major breakthroughs in human knowledge and practice. They do this by shining a powerful light on an issue or opportunity and providing an incentive for innovators to prioritize the challenge goal.

Watch the video

What is a challenge?

Challenges are an open innovation approach. They are designed to crowd-in innovative solutions from a wide variety of actors and sources to expand the Government’s problem-solving abilities. Challenges differ from other traditional government funding programs as they are designed as an "outcomes-based" approach where innovators are awarded based on the results achieved during the Challenge.

Challenges are meant to attract new talent and new ideas from a wide variety of actors, and accelerate progress towards solving problems and achieving stronger social, environmental, and economic outcomes for citizens.

They provide incentives (both financial and non-financial) to encourage a broad range of innovators to tackle problems where solutions are not apparent, or current responses are not achieving the desired results. Innovators are rewarded once they can measurably achieve results and improve on given outcomes.

Why run a Challenge?

Challenges aim to solve big problems, accelerate progress towards ambitious goals, and have a history of producing major breakthroughs in human knowledge and practice. They do this by shining a powerful light on an issue or opportunity, attracting new talent and new ideas, and providing an incentive for innovators to prioritize the challenge goal.

In terms of public policy benefits, challenges can:

  • Provide a targeted mechanism to prioritize important public policy issues and enhance public awareness
  • Open up problem-solving by creating opportunities for government to attract and collaborate with nontraditional stakeholders and innovators in the private, academic, and not-for-profit sectors to advance solutions to complex problems
  • Unlock strategic investments in areas where no natural incentive for innovation yet exists or where the risk of private investment prohibits a solution from being developed
  • Develop a pipeline of new innovations (e.g. programs, services, technologies, products) that can help address complex policy challenges and/or fill important market gaps with tangible impact
  • Introduce an outcomes-based orientation to government programming by linking payments to progress and achievement, as opposed to paying only for expenditures and activities

Types of challenges

Impact Canada runs three types of Challenges: Challenge Prizes, Grand Challenges, and Accelerators.

Challenge prizes

Offer an outcomes-based funding award to whomever can first or most effectively meet a defined challenge or solve a specific problem according to a set of verifiable and pre-determined criteria.

Grand Challenges

Use open and thematic competitions to fund a broad range of potential innovations on a prospective basis and focus on rigorous evaluations of effectiveness.


Provide intensive and time-limited business support for cohorts of early stage enterprises (e.g. start-ups)

Indigenous Innovation Initiatives

Impact Canada has also explored new models for Indigenous innovation as part of a broader Government of Canada effort to seek new approaches to build partnerships with Indigenous communities to improve outcomes.

Indigenous initiatives open a door to exploring ways to operationalize a Nationto-Nation relationship with Indigenous peoples in Canada, partnering directly with Indigenous experts to address barriers and explore ways to effectively accommodate cultural perspectives with sensitivity, humility and compassion to re-shape the colonized approaches that historically defined Canada.

Borrowing elements from challenge-based approaches, Indigenous innovation initiatives under Impact Canada rely less on the competitive aspects in favor of a more holistic, community-oriented frame that values interconnection and communal values over individual triumphs. Impact Canada is currently examining the features of these approaches that are both similar and distinct from traditional challenge-based programs.

They aim to bring forward ideas inspired by Indigenous knowledge, regardless of their stage of development, while finding pathways to develop these into sustainable solutions that can have meaningful, positive impacts on Indigenous communities.

Our approach: The challenge design process

1 Understand

Goal: Identify and define the specific problem that the challenge will seek to address.

  • Select a policy priority
  • Conduct discovery research
  • Undertake stakeholder identification and engagement
  • Establish problem identification and definition

2 Design

Goal: Develop a challenge design, or a set of designs that will support the most effective delivery of a challenge.

  • Selecting a Challenge Type
  • Drafting a Challenge statement
  • Structuring a Challenge
  • Setting a Challenge timeline, including stages
  • Determining eligibility criteria
  • Establishing assessment criteria
  • Setting prize incentives

3 Test

Goal: Validate the design elements previously developed to achieve a challenge design that is likely to deliver on the objectives.

  • Engage with key stakeholders (subject matter experts, innovators, end users, and beneficiaries) to select a final challenge design

4 Implement

Goal: Support stakeholders as applications are submitted and assessed by the jury, and the semi-finalists, finalists and winner(s) are selected.

  • Develop the web site
  • Create a communications and engagement plan
  • Launch Challenge
  • Develop the application form and applicant guide
  • Provide participants with support through the applications process
  • Assessment of applications by a jury
  • Select semi-finalists, finalists and winner(s)
  • Notification and funding agreements with winner(s)

5 Evaluate & scale

Goal: Measure the impact of individual challenges.

  • The solutions produced by Impact Canada challenges are intended to create public value, in the form of measurable improved socioeconomic or environmental outcomes.
  • Federal organizations report and collect information on the impact challenges have had on achieving their broader objectives.
  • The Impact Canada guideline, Measuring Impact by Design provides an accessible introduction to the main set of methods that can be used to understand impact, drawing on current best practices in the social sciences.

Goal: Evaluate challenges as a public sector Instrument.

  • In partnership with Statistics Canada, Impact Canada conducts a horizontal impact assessment of the challenges using quantitative and qualitative data.

Goal: Prepare plans for scaling and support execution.

  • Support winners and finalists through Government of Canada off-ramps in order to ensure that solutions get beyond research and development.

Get in touch

To learn more or explore working with us, please contact us at

Email us