Is the Strategic Innovation Fund Suitable for Your Business?

The Strategic Innovation Fund (SIF) is a Canadian government funding program that provides support for technology development and productivity-boosting projects. It promotes large-scale investments in Canada, while also encouraging technology transfer and development/commercialization of disruptive products and services.

The Strategic Innovation Fund reduces eligible project costs by up to 50%; this helps businesses improve productivity and innovation, while also improving the project’s scope, scale and timelines.

Eligibility criteria determining who can apply for the SIF fund largely depends on the type of applicant (either a business, non-profit, academic institution, etc.) and industry an applicant operates in (such as advanced technology, manufacturing, etc.). Continue reading to learn whether your upcoming project is eligible for Canadian government funding through SIF.

What is the Strategic Innovation Fund?

The Strategic Innovation Fund is a Canadian government funding program uniquely targeted to grow the country’s industrial and technology sectors.

Financial support offered through the SIF fund may provide either repayable or non-repayable funding contributions valued up to 50% of project costs. The amount and type of financial support offered by SIF is allocated on a case-by-case basis, as determined by the funding application review committee.

Streams of SIF Fund Grants and Loans

The program offers four streams of project funding, including Canadian government funding to support:

• Stream 1: Research and development projects that accelerate technology transfer and commercialization of innovative products, processes and services;
• Stream 2: Business growth and expansion projects specifically related to mature, Canadian-based organizations;
• Stream 3: Attraction and retention of large-scale foreign direct investments to Canada; and
• Stream 4: Collaborative research projects that advance industrial research, development and technology demonstration.

Applications are accepted on a continuous basis for steams 1-3 of the SIF fund; this means that companies can develop proposals and submit them for funding throughout the year. Collaborative research projects classified under stream 4 require submission of applications during an annual intake period, for which a formal call for proposals is issued.

Who is Eligible to Receive SIF Grants and Loans?

Although the Strategic Innovation Fund’s eligibility criteria is fairly open to all businesses, potential applicants should keep in mind that this is an extremely competitive program. While your company may be eligible for funding, it must also demonstrate high growth potential and the ability to drive innovation, in addition to the following considerations:

SIF Business Eligibility: Streams 1-3

• Eligible: Small, medium, and large businesses incorporated pursuant to the laws of Canada, who propose to do business in Canada and execute their project within the country.
• Ineligible: Non-incorporated businesses (i.e. startups and early-stage companies).

SIF Organization Eligibility: Stream 4

• Eligible: Consortiums including Canadian post-secondary institutions, research institutes, for-profit businesses, and non-profit organizations.
• Ineligible: Single entities; this stream focuses on collaborative projects with a group of partners.

What Types of Projects Qualify for SIF Funding?

To qualify for the Strategic Innovation Fund, businesses must ensure that their proposed project fits within defined ranges/levels of technology readiness. These Technology Readiness Levels (TRLs) are a standardized way of looking at innovative products and processes, and determining how close they are to commercialization.

Developing a strong application for the SIF fund requires that businesses submit an eligible project that falls within an applicable TRL range. To help conceptualize applicable projects, use the project guidelines below:

Stream 1: R&D and Commercialization (TRL 1-9)

• Adaptation of research findings that have potential for market disruption;
• Product development through the implementation of new technology;
• Research and development activities designed to test the commercial potential of an early TRL concept or finding; and
• Technology-driven process improvements which reduce the environmental footprint of current production.

Stream 2: Firm Expansion and Growth (TRL 8-9)

• Improving manufacturing efficiency through improvements to plant, equipment, or processes; and
• Increasing production to satisfy demonstrable market demand.

Stream 3: Investment Attraction and Reinvestment (TRL 2-9)

• Establishing a new production facility which did not previously exist in Canada;
• Obtaining a production mandate for products being produced for the first time, or previously produced outside Canada; or
• Receiving a research and development mandate which is being established for the first time, or was previously held outside Canada.

Stream 4: Collaborative Technology Development and Demonstration (TRL 1-7)

• Advancing new technologies into product-specific applications; and
• Developing and demonstrating pre-commercial technologies.

Technology Readiness Levels: Trying to understand where your product/process fits on the technology readiness scale? Learn more about what each level represents.

What Costs are Eligible to Submit for the Strategic Innovation Fund?

For each stream of the Strategic Innovation Fund, eligible costs include the following non-recurring expenses:

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• Direct labour costs;
• Direct materials and equipment;
• Land and buildings;

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• Project overhead (limits apply);
• Subcontractors and consultants; and
• Other direct costs.

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Expenses Ineligible for SIF Funding Submission

Likewise, all streams for the SIF fund share similar ineligible expenses. These include (but are not limited to):

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• Amortization of unrealized appreciation of assets;
• Depreciation of assets;
• Donations;
• Dues and other memberships other than regular trade and professional associations;
• Entertainment expenses;
• Federal and provincial income taxes, goods and services taxes, excess profit taxes or surtaxes and/or special expenses;
• Fines and penalties;

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• Losses on investments, bad debts and expenses for the collection charges;
• Losses on other projects or contracts;
• Premiums for life insurance on the lives of officers and/or directors;
• Product development or improvement expenses not associated with the project;
• Sales and marketing expenses associated with the products/services being developed under the Contribution Agreement; and
• Unreasonable compensation for officers and employees.

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Applying for the Strategic Innovation Fund

To apply for streams 1, 2, or 3 of the Strategic Innovation Fund, businesses must complete a two-stage application process that includes (1) a Statement of Interest (SOI) and (2) a full application. SOI documents can be downloaded and submitted online via the Government of Canada’s website.

Only those applicants who submit a successful SOI will be invited to the second application phase, which includes a critical due diligence review and a benefits/contribution assessment. Also, being accepted to the full application stage does not guarantee innovation funding; each application is critical to ensuring funding success.

To discuss if your project is eligible prior to getting started with the funding program, please contact Mentor Works. Our team of Government Funding Planners can determine if your project is a good fit, and can simplify the application process.