In recent years there has been a shift in the global automotive market, and, as noted in our Automotive Industry Overview, Canada has slipped to the 11th largest producer of vehicles globally due to increased pressures from lower wage countries, such as Mexico. The Canadian government has taken note and, in their Economic Action Plan 2015, has introduced a new federal funding program to promote innovation in the Canadian automotive supplier industry.
Promoting Automotive R&D via Small Business Funding Grants
The new federal grant program is called the Automotive Supplier Innovation Program (ASIP) and covers up to 50% of eligible expenses towards the development of innovative products or processes in the automotive sector up to $10 million.
ASIP was created in order to foster innovation amongst automotive suppliers to help strengthen the Canadian supply chain. Automotive vehicle manufacturers are under increasing pressures to improve their fuel efficiencies, technological advancements, as well as adhere to new emission and safety standards. In order to stay competitive with global competition, ASIP will cover a portion of the prototyping, testing, validation, and pre-commercialization costs to ensure Canadian innovations make it to marke
- For-profit companies incorporated and carrying on business in Canada;
- Operating in the automotive sector;
- 1-500 payroll employees;
- Up to $1B in global annual revenues (if above $1B, must partner with a smaller automotive supplier SME who participates in at least 20% of project); and
- Cannot receive over $10 million over the lifetime of the ASIP program.
The Types of Research Projects Covered by ASIP
The ASIP provides Canadian government grants only to projects that adhere to the program’s specific requirements. Most importantly, projects must focus on innovative product/process development targeted at the automotive sector in Canada. For businesses that focus on Technology Readiness Levels (TRL), your project must be at levels 4 through 7. In other words, the project must be at the demonstration and/or prototyping stage, and the result of the project must have substantial commercial potential.
ASIP will operate on a competitive review process. Canadian government funding will be awarded to projects based on their innovation, market relevance, economic benefits, environmental benefits, science and technology benefits, and the feasibility of project success.
Eligible Project Expenses for Canadian Government Funding
Eligible project activities include prototype development, product and process engineering, and pre-commercial product and process testing and validation. Applicants will have the opportunity to have the following expenses covered:
- Engineering/design contractors;
- Specialized equipment;
- Materials used in prototyping/testing; and
- Other costs directly attributable to the project.
Get Started with Government Grants for Small Business R&D
If you are interested in learning more about this program and determining your eligibility, please send us a message. Our business is helping to grow yours; please take a look at the superior service we provide to our clients, which we call The Mentor Works Advantage.
We also host free Canadian government funding webinars and workshops on a regular basis covering topics such as funding for manufacturers, training, hiring, and more. Are you already receiving SR&ED and interested in comparing tax credits to research and development funding grants such as ASIP? Download our free Info Sheet: Comparing Funding Types to see what funding is best for your organization.