Strategic Innovation Fund Technology Grants for Canadian Businesses

The Strategic Innovation Fund (SIF) is a Canadian government funding program that provides support for technology development and productivity-boosting projects. It promotes large-scale investments in Canada, while also encouraging technology transfer and development/commercialization of disruptive products and services.

The Strategic Innovation Fund reduces eligible project costs by up to 50%; this helps businesses improve productivity and innovation, while also improving the project’s scope, scale and timelines.

Eligibility criteria determining who can apply for the SIF fund largely depends on the type of applicant (either a business, non-profit, academic institution, etc.) and industry an applicant operates in (such as advanced technology, manufacturing, etc.). Continue reading to learn whether your upcoming project is eligible for Canadian government funding through SIF.

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Program Overview: What is the Strategic Innovation Fund?

The Strategic Innovation Fund is a Canadian government funding program uniquely targeted at Canada’s industrial and technology sectors. It offers financial contributions (both repayable and non-repayable) valued up to 50% of project costs with the purpose of promoting investment into the types of activities which drive sustained productivity and economic benefits. The amount and type of financial support offered by SIF is allocated on a case-by-case basis, as determined by the funding application review committee.

There are four streams of funding provided through SIF; applicants should align projects to address one of the following areas:

  1. Research, Development, and Commercialization
  2. Business Growth and Expansion
  3. Investment Attraction and Retention
  4. Collaborative Technology Development and Demonstration

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Applicant Eligibility Criteria

Although the Strategic Innovation Fund’s eligibility criteria is fairly open to all businesses, potential applicants should keep in mind that this is an extremely competitive program. While your company may be eligible for funding, it must also demonstrate high growth potential and the ability to drive innovation, in addition to the following considerations:

SIF Business Eligibility: Streams 1-3

  • Eligible: Small, medium, and large businesses incorporated pursuant to the laws of Canada, who propose to do business in Canada and execute their project within the country.
  • Ineligible: Non-incorporated businesses (i.e. startups and early-stage companies).

SIF Organization Eligibility: Stream 4

  • Eligible: Consortiums including Canadian post-secondary institutions, research institutes, for-profit businesses, and non-profit organizations.
  • Ineligible: Single entities; this stream focuses on collaborative projects with a group of partners.

Project Eligibility Criteria

The Strategic Innovation Fund offers four streams of project funding, including Canadian government funding for:

1. Research, Development, and Commercialization

This stream offers funding for the research, development, and market commercialization of innovative technologies. All activities performed must focus on progressing the innovation’s development, which may have a current technology readiness level (TRL) of 1-9. Projects may include (but are not limited to):

  • Researching and testing the market potential of an early concept or finding;
  • Adapting research for commercial applications with the potential for market disruption;
  • Improving processes (by using new technology) to reduce the environmental footprint of production; and
  • Improving current products/processes by implementing new technologies that enhance competitive capabilities.

2. Business Growth and Expansion

Stream two of the Strategic Innovation Fund provides innovation funding for the expansion and material improvement of existing industrial or technological facilities. Activities should be aimed at increasing productivity and efficiencies, ultimately leading to higher competitiveness. At this stage, businesses should have well-developed products and processes and be performing activities within a TRL of 8-9. Projects may include (but are not limited to):

  • Increasing production capacity to meet a demonstrated market demand; and
  • Improving manufacturing efficiency through improvements to plant, equipment, or processes.

3. Investment Attraction and Retention

The third stream of SIF offers support for new investments in Canadian industrial or technological facilities. The main objective is to support large-scale investments that may have not otherwise been made in Canada, and will be used to support the continued development of Canada’s most innovative businesses. Companies must achieve a TRL of 2 or higher to apply; projects may include (but are not limited to):

  • Establishing a new production facility which did not previously exist in Canada;
  • Receiving a research and development mandate which is being established for the first time, or was previously held outside Canada; and
  • Obtaining a production mandate for products being produced for the first time, or previously produced outside Canada.

4. Collaborative Technology Development and Demonstration

The fourth and final Strategic Innovation Fund stream supports collaborative research, including activities related to the discovery or demonstration of new knowledge. In partnership with academic institutions and non-profits, the stream will provide funding for new technology-driven products, processes or services at a technology readiness level of 1-7. Projects may include (but are not limited to):

  • Developing and demonstrating pre-commercial technologies; and
  • Advancing new technologies into product-specific applications.

Expense Eligibility Criteria

For each stream of the Strategic Innovation Fund, eligible costs include the following non-recurring expenses:

  • Direct labour costs;
  • Direct materials and equipment;
  • Land and buildings;
  • Project overhead (limits apply);
  • Subcontractors and consultants; and
  • Other direct costs.

Expenses Ineligible for SIF Funding Submission

Likewise, all streams for the SIF fund share similar ineligible expenses. These include (but are not limited to):

  • Amortization of unrealized appreciation of assets;
  • Depreciation of assets;
  • Donations;
  • Dues and other memberships other than regular trade and professional associations;
  • Entertainment expenses;
  • Federal and provincial income taxes, goods and services taxes, excess profit taxes or surtaxes and/or special expenses;
  • Fines and penalties;

  • Losses on investments, bad debts and expenses for the 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;
  • Sales and marketing expenses associated with the products/services being developed under the Contribution Agreement; and
  • Unreasonable compensation for officers and employees.

Success Stories: SIF-Funded Projects

Many Canadian businesses and post-secondary institutions have used the Strategic Innovation Fund to access project funding. This includes:

Additional Strategic Innovation Fund Resources

How to Apply for the Strategic Innovation Fund

To apply for streams 1, 2, or 3 of the Strategic Innovation Fund, businesses must complete a two-stage application process, however, applications may be submitted year-round. To get started, companies must submit a Statement of Interest (SOI) to propose their project concept.

If approved, applicants will be invited to submit a full application which will then be reviewed for due diligence and a benefits/contribution assessment. Being accepted to the full application stage does not guarantee innovation funding; each application is critical to ensuring funding success.

To apply for stream 4 of the Strategic Innovation Fund, consortiums must apply during a single annual intake period. Consortiums must also follow a two-step application process including a Statement of Interest (SOI) and due diligence assessment. A pool of potential projects will be identified after stage two, at which point a final decision will be made by the Minister of Innovation, Science, and Economic Development.

How are SIF Applications Evaluated?

Applications will be evaluated based on four main criteria, including:

  • Innovation Benefits: How well the project contributes towards the enhancement/development of new innovations. This includes potential spill-over benefits, creation of intellectual property, and impact on productivity.
  • Economic Benefits: How well the project impacts growth of Canadian firms, clusters and supply chains, as well as its expected benefits for Canada’s workforce. This includes number of jobs created, number of high-paying jobs, and project-related revenue growth.
  • Public Benefits: How well the project contributes to the broader public, such as inclusive business and hiring practices, investment in skills and training and environmental best-practices.
  • Applicant Capacity: How well the business can accomplish the objectives set out through the project. This includes management and workforce capability, corporate
    technical capability, financial stability and capacity, and market risk.

Application Process and Required Documentation

There is a two-stage application process for the Strategic Innovation Fund that requires:

  1. Statement of Interest: A high-level overview of projects. Here, applicants can describe the project and explain how it meets SIF’s objectives. Applicants are also asked to provide corporate information so that basic corporate capability assessments can be completed.
  2. Full Application: If advancing to step 2 is advisable, applicants will be contacted and invited to submit a detailed project application. This information is used to complete a due diligence and benefits assessment.

Discuss Your Upcoming Technology Projects with a Government Funding Planner

Considering how SIF can support your upcoming project? Contact Mentor Works to evaluate whether your project is a good fit. Our team can help you align your upcoming project for SIF funding and streamline the application process with time-saving info collection documents and a dedicated team of writers.

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Posted: July 7, 2017 by Jeff Shepherd. Updated: December 19, 2018 by Jeff Shepherd.