Canada’s Strategic Innovation Fund (SIF) provides funding support to companies of any size and industry undertaking research, development, and other large projects. This assistance ensures that Canadian businesses can invest and grow, ultimately creating more jobs in the country. The Government breaks the SIF into five separate streams, each with unique requirements. It is crucial to understand these stipulations to know which funding streams your business may be eligible for. Here, we provide more insight into the SIF and how it’s utilized to finance projects.
What is the Strategic Innovation Fund?
The SIF is part of Canada’s Innovation and Skills Plan and promotes the country’s competitive place in the global economy. This program expedites innovative business initiatives by providing result-oriented assistance.
Another very important aspect of the SIF is the Net Zero Accelerator (NZA) project. This $8 billion initiative helps companies develop and implement clean technologies to lower their carbon footprint. The NZA was initiated as part of the Government’s climate plan announced at the end of 2020, but initially, it was only a $3 billion fund. As part of the much anticipated Federal Budget in the spring of 2021, the NZA funding pool ballooned to $8 billion, making it an important source of funding to pursue for any Canadian business that needs to decarbonize.
Who Qualifies for the SIF in Canada?
The Government decides to fund an initiative if it will potentially promote the long-term competitiveness of Canadian industries on the global stage. Qualifying projects may focus on research and development (R&D) that advances technological knowledge, new products and services, noteworthy collaborations between businesses and other organizations, and when it comes to the NZA, initiatives that aim to reduce the country’s carbon footprint.
Apart from the NZA, the SIF splits into five distinct streams:
- Research, development, and commercialization
- Business growth and expansion
- Investment attraction and retention
- Collaborative technology development and demonstration
- National ecosystems
If you’re unsure if the Strategic Innovation Fund is the right fit for your business, take a look at Canada’s Economic Strategy Tables – if your business’ goals fall into the initiatives of the associated industry table, then SIF may be a great fit for funding.
How Much Financing Support Can the SIF Provide?
The SIF provides financial assistance that matches from 10% to 50% of project costs. It also concentrates on businesses that request at least $10 million for initiatives. In other words, the minimum total cost of the project must be at least $20 million. All project expenses must be non-recurring and relevant to the venture. Eligible costs include:
- Buildings and land (limited to construction and development)
- Consultants and subcontracts
- Direct equipment and materials
- Direct labour
- Overhead (program limits will apply)
- Other direct costs
Financing from Canada’s SIF comes in the form of repayable loans and non-repayable grants that are determined on a case-by-case basis. The government bases repayment plans for loans on performance and risk-sharing issues. It will only extend non-repayable support for projects with apparent strategic or global value and innovative advantages to the public.
Eligibility Requirements for the R&D Stream (Stream 1)
Applicants to each stream of the SIF must meet unique requirements to qualify for financing. Under the first stream, which aims to accelerate R&D, projects at all levels of Technology Readiness can apply. The venture must show long-term commitments to the Canadian economy, such as job creation and advancing our knowledge base. Example projects include:
- Redesigning processes to minimize environmental impact
- Exploring an early idea or discovery to gauge its market potential
- Implementing research methods for novel commercial applications
- Enhancing existing products and processes to amplify the competitive nature of the company
Businesses of any size can apply for this funding, but they must be for-profit and incorporated under Canadian law. The application for this stream has two parts, and you can submit it at any point during the year as there are no deadlines.
Seek Funding for Your Innovative Projects with Easly
Canada’s SIF is an exceptional resource for companies that need to finance their research and development projects. However, innovative businesses may also be eligible to receive Scientific Research and Experimental Development (SR&ED) tax credits. This incentive does not hinge on the success of your project, like the SIF finance option does, relieving company pressure to allow for experimentation.
Easly helps numerous businesses accelerate their SR&ED refunds, and other government receivables, by bringing those funds forward. Through our streamlined Capital-as-a-Service platform, we make it easy for innovative companies in Canada to access capital all throughout the year.
Reach out to us today to learn more about how we can finance your most ambitious projects.