Health Technology Exchange (HTX) offers government funding for business to Ontario corporations that develop, produce and commercialize Medical and Assistive Technologies (MATs).
HTX Canadian Government Funding Qualifications
Ontario firms can qualify for government funding for small business under two different categories:
Qualifying applicant: Ontario-based MNE or new created Ontario-based subsidiary of the MNE.
Qualifying project partners: Ontario-based SMEs, academic institutions, health care organizations.
Government Funding for Small Business Eligibility Factors:
Applicants must be an Ontario-based corporation in the MedTech sector.
Project partner(s) can be MNE/SME companies, healthcare providers, publicly funded commercial organizations, while project partners will be assessed on their role and contribution to the project as well as how they add strategic or complementary assets to the project’s success.
Details of HTX Canadian Government Funding for Business
The total value of eligible projects will be from $1.5 to $15 million over a period of 5 years, while the key funding focus will be on salary costs as opposed to capital equipment. Below are additional details of HTX Canadian government funding:
- HTCP contribution of up to 15% of the total project value.
- Contributions are loans or grants, based on performance.
- Matching contributions are expected to be raised by the applicant from any of the following:
- The MNE qualifying applicant
- Project Partners
- Other commercialization development programs (Federal and Provincial)
- Funding options determined based on the program, applicant, due diligence, & the nature of the funding request.
HTX Business Funding Grants & Loans Options
The following three forms of government funding for small business will be offered through HTX support:
- 1. Performance Based Loans:
- HTCP project funding will be paid out quarterly in advance according to the approved budget, achievement of project milestones, and quarterly reports;
- Repayments will be based on commercial revenues of the HTCP supported technology; and,
- Repayments will be expected to commence as soon as possible, without compromising the success of the project or the organization .
- 2. Convertible debentures (CDs):
- Convertible debentures will be considered when HTCP funding supports a seed financing for new start-ups;
- Total funding includes other financing Partners (e.g. IAF, MI, angels, VCs); and,
- HTX, the funding Partners, and the company agree that CDs are the most appropriate funding mechanism.
- 3. Performance Based Grants (for MNEs only)
- For qualifying MNE projects that guarantee timely and substantial job creation/retention; and,
- Quarterly reimbursement for qualifying project expenses will be based on the achievement of project and job creation/retention milestones.
Important Factors in being Awarded Canadian Government Funding through HTX
Proposals must include support of the following details:
- Resulting job creation/retention;
- Innovation in medical technology and commercial opportunity;
- The project must be technologically feasible, and the applicant possesses, or can reasonably be expected to secure, the requisite technological and managerial capabilities, and financial resources to achieve the stated objectives of the project
- Commercial impact of project outcomes.
HTX Government Funding for Business Application Process
The application process for HTX Canadian government funding for business consists of several steps broken down into two phases:
Phase 1: Expression of Interest (EOI)
- Submitted on formal deadline dates
- EIO includes the following details:
- Project description
- Commercialization potential
- Ability to implement the project
- Potential financial commitments
- Job creation/retention
- Electronic submission of the EOI application and a Budget Summary form
- Submission to this phase is by invitation only
Expenses Eligible for HTX Government Funding Canada
The following lists expenses that qualify for coverage by the HTX program:
- Salaries and Benefits (Applied Research and Commercialization Activities);
- Other Direct R&D Costs (Materials);
- Commercialization and Regulatory Costs (Business Development);
- Capital Expenses (related to Applied Research and Commercialization); and,
- Other eligible costs subject to HTX approval (see below).
NOTE: The following characterize the eligibility of HTCP expenditures:
- Eligible expenses relate directly to the commercialization costs to implement the project;
- Eligible expenses are actual costs directly attributable to and necessary for the completion of the project;
- Eligible reimbursement costs are those incurred and paid after the date that a proposal is approved and funded;
- Eligible expenses are actual cash outlays/ expenses that must be documented through invoices, receipts or other acceptable documentation (particularly related to labour)
- Evidence of all payments must be maintained for audit purposes.
- Note: Major capital equipment costs should ordinarily be a minimal expense of the funding request. The internal review committee will pay special attention to this aspect. The intent of the investment is to primarily support salaries and/or benefits of project personnel.
Expenditures Ineligible for Reimbursement under HTX
The following are examples of costs ineligible for government funding Canada:
- HTCP will not support retroactive reimbursement of eligible project costs incurred prior to the signing of the contribution agreements with recipients.
- Other taxes (i.e. property taxes);
- Business case preparation, success fees, third party government relations, consulting services, or other fees (including legal);
- General working capital requirements (including salaries and overhead) not directly attributable to the approved project including debt service costs and Federal or Provincial income taxes, surtaxes or special expenses; and,
- Remuneration to shareholders.
Eligible In-kind Contributions
In the case of in-kind contributions, these must have a defined book value as documented by the company’s financial records.
Eligible in-kind contributions for applications include:
- Equipment (pro-rated depending on the life span of the project); and,
- Overhead costs for publicly funded research institutions (Colleges, Hospitals and/or Universities).
HTX Canadian Government Funding Ontario First Policy
Support is considered for companies intending to commercialize the product in Ontario, such as:
- An existing organization in Ontario with receptor capacity;
- An expansion of an existing company in Ontario;
- The formation of a new company in Ontario;
- Joint ventures or strategic alliances with a company in Ontario;
- Co-manufacturing involving a company in Ontario;
- Cross-licensing, in-licensing, or co-development with a company in Ontario; establishment of a new subsidiary in Ontario (R&D, manufacturing, sales, marketing, distribution);
- Development and/or production in Ontario by a foreign company.
HTX Funding for Small Business Review & Evaluation Process
The following review process will be used to determine who will receive Canadian government funding through HTX:
- EOI will be reviewed.
- The research and technical plan will be evaluated alongside the commercialization plan.
- Assessed for relevance to HTCP’s goals
- EOI results will be communicated
- If recommended to proceed to Phase 2: Full Proposal stage, HTX will provide a written confirmation and a list of conditions; recommendations or improvements required for consideration at the Full Proposal stage.
- If an EOI is not recommended for the Full Proposal stage then the applicant may be provided with suggestions to improve the EOI for a possible re-submission.
More Information on HTX Canadian Government Funding
Select from one of these options for additional information regarding HTX Canadian government funding:
Support Services for Small Business Grants & Business Loans Ontario
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