NSERC – R&D Partnerships with Colleges and Universities

R&D in Canada

The Canadian government sees increased funding to R&D as a key component in increasing our global competitiveness. Improved global competitiveness will create long term jobs within Canada and increased exports.  In previous articles I have discussed the following funding for R&D that is performed internally in a company. In 2016 funding was as follows:

SR&ED $3 billion supporting 20,000 companies

IRAP $2 billion annual supporting 2,000 projects within companies

In addition to funding internal R&D activities within a company, the federal government also funds R&D activities where businesses require the technical expertise found at colleges and universities. This type of funding is made available through the National Science and Engineering Research Council (NSERC). In 2014-2015, $1.1 billion of funding was used to fund thousands of projects at colleges and universities across Canada.

College and University Funding

NSERC funding has been used in for R&D funding by companies such as Cascades, Domtar, Kruger, Tembec and Weyerhauser. Business partnerships with post-secondary institutions are seen as having a very beneficial impact on the workforce, as professors gear their research toward the needs of businesses, and students learn to apply their science and engineering skills to the needs of businesses, and leave post secondary institutions with knowledge needed by industry.


To be eligible, a business must operate within Canada and must be able to use the results of the R&D activities for its processes or products that will lead to a significant economic benefit either to the company or to Canada.

How does Funding Work

In order to apply for funding through NSERC, a company should have a well-defined R&D project or applied research and development project in mind. Projects that provide routine analysis, routine training, professional practice or consulting services, routine use of college equipment, or collect data without interpreting underlying mechanisms are not eligible. Also, proposals that involve the setup and operational management of an institute, a formal or informal group of researchers, or that are principally associated with the acquisition and maintenance of equipment in support of applied research will not be approved.

Once the company has a project, they need to identify a college or university that specializes in the underlying field of science. The post secondary institute should then be contacted to identify a professor with technical expertise in the area of R&D that would like to work on the project. An application can then be made to NSERC.

When looking at NSERC funding it is important to take into account that the R&D work does not start immediately. There is a time lag between a company meeting with a professor and applying for an NSERC grant and when the college or university school year starts and the R&D activity actually begins.

NSERC grant funded projects are allowed to range from one year to three years in duration.

Company Contribution

Expected company contributions vary depending on the grant amount:

For grants up to $75,000 per year:  the eligible business must actively participate in the project and contribute at least half of the amount requested from NSERC, in cash and/or in-kind, of which at least $10,000 annually must be in cash.

For grants between $75,000 and $150,000 per year: the eligible business must contribute an amount at least equal to the amount requested from NSERC, in cash and/or in kind, of which at least one half must be in cash.

Intellectual Property Rights

The most important part of any NSERC agreement is who owns the intellectual property that arises from the R&D work. NSERC makes no claim to the ownership of any intellectual property generated from the research it funds. As a general principle, post secondary institutes need to develop and sign an agreement with each company regarding the ownership and disposition of intellectual property.

Usually the college or university will want the rights to use the new knowledge or technology gained in future teaching and research; and faculty and students must have the right to describe the project on their curriculum vitae.

For Information on how to Apply:

College and Community Innovation Program:



Bonny Koabel CPA, CGA is President of AKR Consulting Canada a Mississauga, ON firm specializing in Government Grants, Subsidies, Tax Credits, Refunds and Rebates since 2003.