Canada’s steel and aluminum supply chain faces greater global competition than ever before, and recent international trade disputes have had significant impact on businesses that use these raw materials. Many companies are experiencing cost increases and a more difficult export environment, but this doesn’t mean that Canadian firms using steel and aluminum in their production processes can’t succeed. While waiting for the regulatory burdens to be lifted, manufacturers now have more government support to make investments and improve their competitiveness abroad.
Investing in manufacturers that use steel and aluminum is one of the ways that Canada’s federal government is enabling industry to succeed. This includes the development of the Regional Economic Growth through Innovation (REGI) Steel and Aluminum Initiative, a FedDev Ontario funding program that provides non-repayable contributions to for-profit firms and Indigenous organizations bolstering their productivity and competitiveness through strategic investments. This program is the Southern Ontario variant, with the other REGIs offering their own variant for Western Canada, Québec, Atlantic Canada, Northern Canada, and Northern Ontario. This article focuses on the Southern Ontario variant.
Companies with products that have aluminum or steel accounting for more than 20% of input costs can access up to $150,000 to $1,000,000 in Canadian government funding or up to 45% of eligible costs.
Priority is given to Steel and Aluminum Initiative funding applicants that develop and submit a competitive application on or before April 8, 2019. Given the high demand for funding and the total funding pool available, it’s possible that the program may be fully subscribed after that date and may not consider additional applications.
What is the Steel and Aluminum Initiative?
Canadian small and medium-sized businesses play a key role in North America’s steel and aluminum value chain. Transforming these inputs into finished or semi-finished products has a significant impact in many of the country’s top industries like manufacturing (general and automotive), energy, defence, aerospace, and construction. Despite shifting global market dynamics, companies that use steel and aluminum need to remain competitive and profitable.
The Steel and Aluminum Initiative supports eligible companies by reducing strategic project costs, including capital costs such as machinery and equipment, by up to 25-45%.
Projects should focus on business growth and expansion through productivity-boosting, innovative projects. As with other non-repayable contributions provided through the Canadian federal government, funding supports future projects. Costs incurred in the past will not be considered for funding, and all project activities must be complete by March 31, 2020.
Applicants Eligible for Steel and Aluminum Initiative Funding
The Steel and Aluminum Initiative provides financial contributions to applicants that:
- Are intensive users of steel or aluminum, with those materials contributing a minimum 20% of total input costs;
- Have between 10 to 499 full-time employees in Canada; and
- Are for-profit firms or Indigenous organizations.
Projects Eligible for Steel and Aluminum Initiative Funding
There are several types of projects that are considered for Steel and Aluminum Initiative funding, including:
- Productivity Improvement: Acquiring/adapting/adopting new technologies or processes, process re-engineering, and improving manufacturing capacity;
- Business Scale-Up: Market development/expansion, adopting best management practices/processes/systems, and business opportunity development; and
- Technology Commercialization: Late-stage product development for market diversification and growth, such as technology showcasing and demonstration.
Apply for Steel and Aluminum Initiative Funding
Eligible companies should develop a funding application that clearly speaks to the project’s strengths and importance, including economic and innovation benefits, market potential, and financial/management capacity. All applications submitted online prior to the April 8, 2019 priority cut-off date will be reviewed as a group and the most competitive applications will be offered a contribution agreement. It’s expected that all funding will be awarded to applications in this group, but if additional funding remains, applications received after April 8 may be considered.
Applicants should apply to the Steel and Aluminum Initiative by April 8, 2019 for the best chances of funding success.
To discuss the Steel and Aluminum Initiative and discover funding programs for other strategic projects, please contact Mentor Works. Our team of Government Funding Planners can consult on your project and optimize the process with comprehensive application support.