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Budget 2017 Reaffirms Liberal Party’s Commitment to Innovation

by Rob Maciel

The Canadian Federal Budget 2017 was released last week to much interest from business and industry analysts. There was significant speculation surrounding the budget to see what direction Prime Minister Trudeau will be taking. Shortly after Minister Bill Morneau presented the budget to the House, it became clear that the Liberal government will continue investing in innovative businesses and sectors.

There are many Canadian government funding highlights in Budget 2017

It should be noted that many of the funding allocations announced yesterday will merely act as frameworks with specific funding programs announced in the coming months. For more information on how government funding is allocated to specific grants and loans, download the free Canadian Small Business Funding Guide.

Budget 2017 Expands Government Funding for Hiring & Training

Hiring and training continues to be one of the biggest priority areas for the Trudeau government. In the new budget, there are several initiatives to support youth hiring, science/technology/engineering/math (STEM) education, upskill training, and green job creation.

Last week, it was announced that the Youth Employment Strategy (YES) would be renewed and expanded with an additional $395.5M over the next three years. Expanding the program will support additional youth job creation and help employers hire more recent graduates. More specifically, the new framework will help create 15,000 new green jobs, support over 33,000 vulnerable youth develop skills, and create 1,600 new employment opportunities for youth in the heritage sector.

Additionally, there is growing concern with how to address skill shortages in Canada. To this end, the new budget proposes $225M over four years (and $75M per year thereafter) to develop a new organization supporting skills development and measurement in Canada. This new government organization will work in partnership with provincial and municipal governments, as well as industry associations, the private sector, and educational institutions to:

  • Identify the skills sought and required by Canadian employers;
  • Explore new and innovative approaches to skills development; and
  • Share information to help inform future skills investments and programming.

Innovation & Cleantech Funding Prioritized in Budget 2017

As has been a trend since the Liberal government came to power, federal funding priorities continue to shift towards innovation, clean technologies (cleantech), and supporting the green economy. It came as no surprise, then, that the largest funding pools are aimed at supporting innovative research and development.

New Strategic Innovation Fund

Budget 2017 proposes $1.26B to create a new five-year Strategic Innovation Fund. The goal here is to consolidate and improve existing programs while launching new innovation programming.

The government’s aim is to help improve service delivery on popular innovation-focused funding programs, such as the Strategic Aerospace and Defence Initiative, the Technology Demonstration Program, the Automotive Innovation Fund, and the Automotive Supplier Innovation Program. The fund will create additional programming to support a wider range of industries, ultimately improving the availability of economic support.

National Research Council (NRC) Funding Renewed

After last year’s expansion of the National Research Council, Budget 2017 renewed NRC’s mandate and provided a $59M in total funding.

NRC is well-known among Canada’s business community for the Industrial Research Assistance Program (IRAP). IRAP grants are one of the programs and services offered by NRC; this suggests additional funds and business services could be available for IRAP over the coming year, however as of right now the Federal Budget 2017 only specifies funding is allocated to NRC and not any particular initiative such as IRAP.

Some of the IRAP programs Canadian businesses have received through IRAP in the past include:

  • Supports up to 50-80% of research labour and Canadian subcontractor costs to a maximum $50k in research funding grants.
  • IRAP Mid-Size Projects: Supports up to 65-80% of internal labour and Canadian subcontractor costs with an average of $150k-500k in research grants.
  • Supports a portion of costs related to hiring a technical post-secondary graduate.

Sustainable Development Technology Canada Renewed

Sustainable Development Technology Canada (SDTC) offers a range of funding programs to support clean, green, and sustainable technology development.

Their funding programs, such as the SD Tech Fund, recently expanded from a call for proposals style program to a rolling intake – this improved flexibility helped more businesses access critical funding. SDTC funding supports innovative R&D initiatives leading towards new, innovative sustainable technologies.

Nearly $1.4 Billion for Cleantech Financing

In addition to all the innovation and cleantech funding outlined above, the government is committing $1.4B toward cleantech financing. Financing will be available through the to increase the amount of capital available to cleantech firms. This additional funding will help support the growth of Canadian cleantech businesses and create more jobs in the cleantech sector.

Mitacs Funding for Research and Development

Mitacs is a national non-profit organization supporting collaborative research projects performed between post-secondary institutions and Canadian businesses. Budget 2017 allocated additional funding for the organization, which offers funding programs such as Mitacs Accelerate and Mitacs Elevate. The organization will receive $220M through the budget, an increase from last year’s $189M budget allocation.

Budget 2017 Expands Canadian Procurement Opportunities

To date, there have not been any significant measures introduced supporting Canadian procurement. In the past, Canadian businesses haven’t had good access to government contracts.

To help remedy this, the Federal government will be creating Innovative Solutions Canada with $50M in support to help Canadian procurement. This will improve business’ access to government contracts to help businesses grow and commercialize innovations.

While there are other programs that exist to help businesses sell their products to government (such as the Build in Canada Innovation Program (BCIP)), this new solution will help improve overall access to government contracts.

Commitment to the Upcoming Agri-Food Framework

The popular Growing Forward 2 agri-funding framework will end in 2018, many of its funding application windows already being closed. Through this program, the government invested $600M in agri-food businesses to support innovation, business growth, job creation, and skills development.

Budget 2017 reaffirms commitment to the next Agri-food funding framework and hints that the new policy framework is underway. The government is expected to launch the next policy framework in the 2017-2018 fiscal year.

We expect that a new program will be launched next winter.

This is good news for agri-food businesses who have enjoyed the investment support offered through Growing Forward 2.

Increased Canadian Government Funding Support in 2017

Overall, Budget 2017 reaffirmed the Trudeau government’s commitment to invest in innovative business and emerging industries. This new budget provides business with a wide range of government support options to help with growth and investment. While many of these new funding buckets still need to be allocated to specific programs, it’s worth noting the range of options available to support business.

To learn more about how government funding programs are structured on the federal and provincial levels, download the free Canadian Small Business Funding Guide whitepaper.

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