Strategic Innovation Fund. Stream 5 - National Innovation Ecosystems

This funding helps support industrial research, development and technology demonstration through collaboration between academia, non-profit organizations, and the private sector.

A) What is the Strategic Innovation Fund?

The Strategic Innovation Fund (SIF) provides major investments in innovative projects that will help grow Canada's economy for the well-being of all Canadians.

About the Strategic Innovation Fund

Managed by Innovation, Science and Economic Development Canada (ISED), the Strategic Innovation Fund (SIF) plays a key role in providing support for innovative projects in Canada through:

• simplified application processes
• responsive, results-oriented assistance

The minimum SIF contribution amount is $10 million for projects with total costs of at least $20 million. The amount you request from SIF should be based on your project needs.

Objectives

SIF provides transformative investments in all sectors of the economy to help Canada prosper in a global, knowledge-based economy.

The program helps Canadian businesses and organizations succeed and help Canada grow good jobs for a strong economy.

Key program objectives include:

• encouraging businesses to invest in research & development (R&D) activities that lead to technology transfer and commercialization of new products, processes and services
• accelerating the growth and expansion of innovative businesses in Canada
• attracting and retaining large-scale investments to Canada
• advancing networks of collaboration between the private sector, research institutions and non-profit organizations in key emerging technology sectors and in industrial R&D and commercialization

Background

SIF was created in 2017. It incorporates several legacy programs already administered by ISED. The various programs administered by ISED are subject to specific terms and conditions. SIF continues to administer the legacy programs according to the terms agreed on with each recipient.

Automotive Innovation Fund (AIF)

With new funding agreements being signed between 2008 and 2021, the Automotive Innovation Fund (AIF) supported strategic, large-scale research and development (R&D) projects in the automotive sector. AIF encouraged innovation in the development of greener and more fuel-efficient vehicles, and helped companies maintain a strong, competitive position in the Canadian automotive industry.

Automotive Supplier Innovation Program (ASIP)

With new funding agreements having been signed between 2016 and 2021, the Automotive Supplier Innovation Program (ASIP) complemented the AIF in helping Canadian automotive suppliers gain a competitive edge through the development of new innovative products and processes.

Strategic Aerospace and Defence Initiative (SADI)

With new funding agreements having been signed between 2007 and 2017, the Strategic Aerospace and Defence Initiative (SADI) provided repayable contributions to support R&D projects in the aerospace, space, defence and security sectors.

Technology Demonstration Program (TDP)

With new funding agreements having been signed between 2013 and 2017, the Technology Demonstration Program (TDP) provided non-repayable contributions to support one or more large-scale R&D projects per year.

Technology Partnerships Canada (TPC)

With new funding agreements having been signed between 1998 and 2006, Technology Partnerships Canada (TPC) was a special operating agency of Industry Canada with a mandate to provide funding support for strategic R&D, and demonstration projects that produced economic, social and environmental benefits to Canadians.

B) Who is eligible to apply?

The Strategic Innovation Fund (SIF) covers all sectors of the economy and is available to for-profit and not-for-profit organizations that aim to support Canadian innovation.

SIF provides funding for 2 categories of projects, each with their own set of requirements:

• Business Innovation and Growth projects
• Collaborations and Networks projects

Who can apply for Business Innovation and Growth projects?

To apply under SIF's Business Innovation and Growth category, your company must be one of the following:

• a for-profit business or cooperative incorporated in Canada
• a partnership proposing to carry out business in Canada

If you succeed in receiving SIF funding, you will be responsible for:

• managing the project
• carrying out agreed-on terms and benefits of the Contribution Agreement
• submitting project claims for reimbursement
• receiving and repaying the government contribution and reporting on results
• owning or holding sufficient background intellectual property (IP) rights to allow your project's activities to be carried out
  • This includes holding enough rights to allow you to make full use of the benefits from any IP resulting from your project's activities

Who can apply for Collaborations and Networks projects?

To apply to SIF as a lead applicant in the Collaborations and Networks category, your organization must be one of the following:

• a not-for-profit organization incorporated in Canada
• a for-profit corporation incorporated in Canada

As the lead applicant, if you are successful in receiving SIF funding, you will be responsible for managing the project for the network according to the terms of the Contribution Agreement. This includes:

• submitting an application to SIF on behalf of the network
• receiving and managing the government contribution
• managing the network's projects
• submitting claims
• reporting on results
• furthering the sustainability of the network

Lead applicants will work in collaboration with Canadian universities, colleges, research institutes, for-profit corporations (including SMEs and large corporations) and/or not-for-profit entities.

C) What is an eligible project?

SIF focuses on funding innovative projects that comply with the following requirements.

Requirements for Business Innovation and Growth projects

R&D and commercialization

These projects must involve activities related to the research and development (R&D) and commercialization of innovative products, processes or services.

These activities support products, processes or services that:

• fall under Technology Readiness Levels (TRLs) 1 to 9
• will increase the project's TRL
• have the potential to be implemented or commercialized

Examples of projects of this type include:

• R&D to test the commercial potential of early TRL concepts or findings
• adaptation of research findings for commercial applications that have the potential to disrupt the market
• development and improvement of current products by implementing new technology that will enhance the company's competitive capability
• process improvements reducing the environmental footprint of current production by using new technologies

Firm expansion and growth

These projects must support the expansion or material improvement of existing industrial or technological facilities.

Activities for these projects should fall under Technology Readiness Levels (TRLs) 8 to 9, where the new product or technology has either:

• qualified through tests and demonstrations
• been proven successful

These projects should result in the company's improved viability through company growth or increased efficiency or output capacity.

Examples of projects of this type include:

• increasing manufacturing capacity to meet demonstrated market demand
• improving production efficiency through plant and equipment improvements

Investment attraction and reinvestment

These projects must support new investments in R&D mandates including the hiring of full-time-equivalent employees in Canada.

Activities for these projects should be a minimum of Technology Readiness Level (TRL) 2, where the technology concept or application has been formulated. These projects should support the establishment of new facilities or bring new ventures to Canada.

Examples of projects of this type include:

• a Canadian company establishing a new production facility that did not previously exist in Canada
• getting a production mandate for a product previously produced outside Canada or being produced for the first time
• getting a research and development mandate previously held outside Canada or being established for the first time

Requirements for Collaborations and Networks projects

National innovation networks

Projects related to the development of national networks can support multiple projects.

Resulting network-supported projects may include:

• Industrial research: This includes activities related to the discovery of new knowledge that aim to support the development of new technology-driven products.
• Processes or services at early-stage technology readiness levels: This includes fundamental research activities and the research and development (R&D) phases.
• Technology demonstration: This includes advancing and developing new technologies into product-specific applications at mid- and late-stage technology readiness levels. Projects should have the goal of commercialization in areas where Canada has a proven advantage.

Activities for these projects fall mainly under Technology Readiness Levels (TRLs) 3 to 7 but could cover the whole range of TRLs 1 to 9.

Project activities should:

• develop technologies with clear paths to commercialization in funding priority areas
• involve a high degree of collaboration to enhance:
  • supply chains
  • ties between businesses and academia and/or research bodies

Some examples of eligible network project activities include:

• creating collaboration among key members in the Canadian R&D community. These key members include:
  • industry researchers
  • national and regional research institutes
  • academic institutions
  • Canadian businesses (such as small-and-medium-sized enterprises and large corporations)
• providing financial support for collaborative projects

Networks are responsible for assessing, approving and managing the project activities they will support.

Collaborative technology development and demonstration

These types of projects are chosen through a competitive intake process only.

Chosen projects must support industrial research, including:

• activities related to the discovery of new knowledge (that support the development of new technology-driven products, processes or services at early-stage technology readiness levels)
• large-scale technology demonstration (such as advancing and developing new technologies into product-specific applications at mid- to-late-stage technology readiness levels)

Activities for these projects should fall under Technology Readiness Levels (TRLs) 1 to 7.

These projects should:

• support the development and demonstration of pre-commercial technologies
• involve a high degree of collaboration enhancing the supply chain and ties between academia and/or research bodies

A project of this type could, for example:

• in conjunction with small-and-medium-sized enterprise (SME) suppliers and research councils, develop a leading tier-1 original equipment manufacturing company of a potential new product using academic research findings.

Eligible activities for this type of network project are those that provide financial support for collaborative projects and allow for collaboration among key players in the Canadian R&D community, including:

• industry researchers
• national and regional research institutes
• academic institutions

For network projects, networks are solely responsible for assessing, approving and managing the projects they will support.

D) What are eligible supported costs?

Strategic Innovation Fund (SIF) funding is project-based, with a portion of eligible supported project costs (expenditures) being reimbursed.

Project costs that are supported by SIF include:

• direct labour costs
• direct materials and equipment costs
• other direct costs
• overhead costs (program limits apply)
• subcontracts and consultants costs
• land and building costs, which must:
  • be necessary and reasonable in order to be able to carry out project activities and
  • benefit all network members (for Collaborations and Networks projects)

Additional conditions may apply to applications that include land-related costs.

Other eligible costs for Collaborations and Networks projects

In addition to the above, the following costs are eligible for SIF support in the Collaborations and Networks category:

• expenditures related to network operations and activities, including:
  • the organization of networking events
  • the operation of regional offices across Canada
  • participation in collaborative research and technology
  • conferences and workshops in support of collaborative research and development (R&D) activities
• costs related to network operations, including:
  • travel
  • salaries
  • overhead
  • office equipment
  • professional services
  • other operational costs, as appropriate

E) What are examples of ineligible costs?

SIF will not support certain costs, even if they are reasonably and properly incurred in the context of an approved project.

Examples of unsupported costs include:

• advertising
  • except reasonable advertising of an industrial or institutional character placed in trade, technical or professional journals for the dissemination of information for the industry or institution
• allowance for interest on invested capital, bonds, debentures, bank or other loans together with related bond discounts and finance charges
• amortization of unrealized appreciation of assets
• compensation for officers and employees that is unreasonable
• depreciation of assets
• donations
• dues and other memberships other than regular trade and professional associations
• entertainment expenses
• fines and penalties
• losses on investments, bad debts and expenses for collection charges
• losses on other projects or contracts
• premiums for life insurance on the lives of officers and/or directors
• product development or improvement expenses not associated with the project
• provisions for contingencies
• selling and marketing expenses associated with the products or services or both being developed as a part of this project
• taxes, including:
  • excess profit taxes or surtaxes
  • federal or provincial income taxes
  • goods and services taxes
  • special expenses in connection with those taxes

F) How do organizations apply for SIF?

The application process of the Strategic Innovation Fund (SIF) focuses on project outcomes and benefits for Canadians.

To apply to SIF you must:

• understand which category your project falls under:
  • growing your business or partnership with innovative solutions
  • creating or supporting an economic network across Canada
• ensure your project objectives matches one our current investment priorities
• determine how your project will benefit Canadians
• consult with us to see if you qualify by first checking your eligibility online

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