Need to Know
There are a number of federal, provincial and regional government funded programs and SR&ED tax credits that OKR Financial will fund. When reviewing the various program descriptions below, please note that the percentages and ranges referenced are based on the current terms of the following government funded programs as of April 2019.
Featured Guide: IRAP
- IRAP supports small to medium-sized companies in Canada that are creating new technologies
- Find out if your company is eligible for IRAP
- Understand the process and view steps on how to apply
The National Research Council of Canada’s (“NRC”) IRAP Program works with over 11,000 SMEs each year. Program grants come in the form of a salary contribution normally in the range of 50% to 80% of the successful company’s eligible expenses and is intended to support Canadian companies conducting novel, innovative and risky development.
The SR&ED Program is a federal tax incentive program designed to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (“R&D”) in Canada. The SR&ED Program is administered by the CRA. Companies qualify by demonstrating they are conducting R&D where the outcome is novel, unique and uncertain.
The Superclusters program is led by ISED (Innovation, Science and Economic Development Canada.) But each Supercluster is an independent, not-for-profit entity with its own industry-led board of directors. It’s a unique business model that allows Superclusters to move at the speed of business.
Funding flows into Canada’s Superclusters through co-investment by government and industry, with an expectation of dollar-for-dollar matching.
Launched in July 2017, the SIF Program has a budget of $1.26 billion over five years and is part of the Innovation and Skills Plan. The SIF Program will be expanded to support high-growth sectors such as clean technology, information and communications technology and agri-food.
According to the Fall Economic Statement 2020, stated on November 30, 2020, the Government of Canada announced that the Strategic Innovation Fund would invest $250 million over 5 years to support Canada’s innovative, intellectual property-rich firms.
Alberta Innovates annually invests $286 million dollars in a broad spectrum of funding and grant opportunities. This support builds research capacity, innovation culture, talent supply and research infrastructure. The programs support the development and delivery of innovations that meet industries “pull” for practical solutions to their biggest challenges.
The SDTC Program is designed to support the development and pre-commercial demonstration of clean technology solutions with the aim to increase each solution’s chances of successfully making it to the marketplace. Since 2001, the Government of Canada has committed $1.364 billion to SDTC. The Fund typically supports 33% to 40% of eligible expenses on a milestone basis. 25% of the eligible costs must be funded through private sector contributions.
The CMF announced a program budget of $353 million in 2020-202 to support the Canadian television and digital media industries through two streams of funding:
(a) the “Convergent Stream”, which supports the creation of convergent television and digital media content for consumption by Canadians anytime, anywhere; and
(b) the “Experimental Stream”, which encourages the development of innovative, interactive digital media content and software applications.
Six provinces offer an interactive IDMTC Program or similar such program. The IDMTC Program operates in a similar manner to the SR&ED Program and can be combined with the SR&ED Program to maximize the applicant’s access to government funding. The British Columbia IDMTC Program, which was scheduled to end August 31, 2018 has been extended for another five years to September 1, 2023.
CanExport can provide SMEs funding up to $75,000 to cover up to 75% of international market development activities. Applicants can chose up to five export markets to target, where the company has no or minimal business. Types of activities which can be funded include: business travel, market research, participation at trade events and fairs, adaption and translation of marketing tools, Intellectual property protection, certification and adaption of contracts, and expert advice on business, legal or tax matters
In 2006, the Government of British Columbia enacted legislation to launch the Southern Interior Development Initiative Trust, to support long term strategic investments in economic development projects that will have lasting and measurable benefits within a specific geographical location.
The SIDIT Program targets funding toward investment in self-sustaining projects that support ten themes. The SIDIT Program provides two broad types of funding:
- Loans/equity financing for business ventures that meet SIDIT’s objectives and criteria
- Grant Funding for programs and projects
The Partnership will also provide Loans to Borrowers with respect to rebates under federal Goods and Sales Tax, Harmonized Sales Tax and Provincial Sales Tax programs (“GST/HST/PST Programs”). Businesses throughout Canada frequently find themselves with a federal or provincial government sales tax refund due, either on a quarterly or annual basis. Examples include where a company pursues an asset purchase program for business or development purposes or indeed contract delivery.
The Canadian film and television production industry is supported by federal, provincial and territorial governments where domestic and international producers can claim refundable tax credits to help offset the cost of production in Canadian locations. The Canadian Film or Video Production Tax Credit (CPTC) is jointly administered by the Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency.
The WD is a Canadian federal department that works towards achieving three (3) departmental results: businesses that are innovative and growing in Western Canada; Communities that are economically diversified in Western Canada and businesses that invest in the development and commercialization of innovative technologies in Western Canada.
In August 2017, the Prime Minister announced the dissolution of Indigenous and Northern Affairs Canada (INAC) and a plan to create two new departments: Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada. This transformation will take time and includes engagement with Indigenous peoples and others.
CIIP is a funded program offered by Global Affairs Canada. It promotes collaborative industrial research and development projects with a high potential for commercialization between Canada and partner countries. The CIIP is a “seed fund” meaning that various other public and private partnerships and encouraged to contribute their expertise and funds. Partner countries are: Brazil, China, India, Israel and South Korea.
Alberta Start ups (SMEs) working on innovative geospation technology products may apply for non-dilutive loans (0% interest), repayable after the product generates revenue. The Tecterra BUILD program provides funding for projects with budgets greater than $300,000, with Tecterra providing funding of up to 50% of the development and commercialization costs, to a maximum of $500,000 per project.
IDEaS was announced in Canada’s defense Policy “Strong, Secure, Engaged” and commits to $1.6 billion of investment in innovations for defence and security over the next 20 years. IDEaS program includes several elements, including competitive projects, innovation networks, sandboxes and contests.
The BDC is the only bank exclusively devoted to entrepreneurs. In addition to their expert advisory services, their core business is to provide direct finance and working capital, and to transform business ideas into successful companies. In addition, BDC offers growth and transition capital for established high growth companies, and growth equity in order for mid-market companies to grow exponentially.
EDC is a Crown corporation and export credit agency, dedicated to helping companies of all sizes to develop in world markets by export and attracting foreign investments into Canadian companies. In 2017, the EDC was entrusted by Government of Canada to create the Development Finance Institution – FinDev Canada. The federal budget confirmed a capital injection of $300 million.
WINN is a $100 million federal initiative that offers repayable contributions for small and medium-sized enterprises with operations in Western Canada to move their new and innovative technologies from the later stages of research and development to the marketplace. Subscribers should note that as of the date of this Offering Memorandum, the WINN has been suspended.
The Fund is uncertain if or when this Program will be re-instituted.