New Strategic Innovation Fund promises 50% grants for capital cost expenditures

Overview

On July 5, 2017 the federal government launched the Strategic Innovation Fund (SIF) a $1.36 billion fund available over five years. The SIF provides grants to firms of all sizes across all of Canada’s industrial and technology sectors, including printing companies. The goal of this program is to create economic growth and good, well paying jobs for Canadians. What is most exciting about the SIF is that it covers the cost of capital equipment, which is something that could benefit most companies in the printing industry. The SIF is grant program, and it is important to note in order to use to the program you must apply for the funding and get approval before you make your capital equipment purchase.

SIF is divided into 4 streams:

Stream 1: Projects that encourage R&D that will accelerate technology transfer and commercialization of innovative products, processes and services

Stream 2: Projects that increase the growth and expansion of companies in Canada

Stream 3: Projects that attract and retain large scale investments to Canada

Stream 4: Projects that advance industrial research, development and technology demonstration through collaboration between academia, non-profit organizations and the private sector.

In this article we will outline stream 2, as it is the stream that is most applicable to the print industry.

What types of companies can apply for funding?

Any small, medium or large for-profit corporation that is carrying on business in Canada or is proposing to carry on business in Canada is eligible for funding.

What types of projects are eligible for funding?

Under stream 2, project costs required to support company growth, increase efficiency or increase output capacity will be supported.

The types of projects that may be funded include:

  • Buying new manufacturing equipment such as a printing press, slitting machine or packaging equipment to increase manufacturing capacity to meet customer demand
  • Improving production efficiency through retrofitting existing equipment like printing presses or packaging equipment
  • Buying or upgrading new accounting, ERP, or WMS software to increase efficiency
  • Upgrading or buying new graphic or RIP software to improve plate and print quality
  • Buying equipment that will further automate processes

What are eligible costs?

Eligible costs must be specifically related to the project, including:

  • direct labour
  • overhead (program limits apply)
  • subcontractors’ and consultants’ fees
  • direct materials and equipment
  • other direct costs
  • land and buildings

Costs associated with land and buildings must be necessary and reasonable to carry out the related activity. Examples of eligible land and building costs include the construction of new or the expansion of existing facilities, the development of industrial landscapes and testing facilities, and investments in modern buildings. Additional conditions may apply to project applications that include costs related to land.

What is the application and assessment process?

Applications are accepted on a continuing basis. There are no submission deadlines.

Statement of Interest (Step 1): Applicants are required to submit a high-level overview of their project. In this document, applicants need to describe how their project meets the goals of SIF. Applicants will also be asked to provide company information to help determine the company’s ability to complete the project if the application is approved.

After the step 1 review is complete, applicants will be given feedback on whether the project qualifies to for Step 2.

Full Application (Step 2): Applicants are required to submit a detailed project application. The information provided will be used to complete a due diligence and benefits assessment.

What are the contribution amounts?

The amount of the contribution is based on the minimum amount required to carry out the project. At this time there is no upper limit for the amount that a company may apply for. The maximum amount of funding however, is 50% of eligible costs. The maximum amount will only be given out for extraordinary circumstances.

Funding is limited, so remember to apply early, even if your project is not scheduled for one or two years, as it will take time to get funding approval.

Comments

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.