If there's one message manufacturers can take away from the
most recent federal budget, it's this: the future is now.
If you've been waiting for the perfect time to invest in
R&D – or reposition your company towards a cleaner,
greener future – the federal government has introduced
several new funding programs and incentives that make billions of
Three programs directly impact the manufacturing sector: the CME
Smart Green Fund, SD Tech Green Fund and Low Carbon
There is approximately $77 million available to companies that
invest in clean air, water and climate change projects that improve
sustainability, productivity and competitiveness.
But the budget also includes investments in other areas that
could have positive indirect impacts on manufacturing, including
nearly $200 million from Natural Resources Canada for research,
development and the demonstration of clean energy technologies.
It's also committed to investing in infrastructure for
alternative transportation fuels; technologies to reduce greenhouse
gas emissions in the oil and gas sector; and academic research,
which could potentially benefit manufacturers that develop
collaborative applied research partnerships with universities.
If you're among the forward-thinkers eager to use government
funds to help propel your business forward, here are a few ways to
seize the opportunity.
Plan for the future
Most tax incentives and funding programs outlined in the budget
take effect in the 2017-18 fiscal year, with more expected to roll
out in the following years. This means you have time to get your
ducks in a row and you should use it wisely.
Reflect on your existing operations, identify areas where you
can become more sustainable and explore ways to align those
business initiatives with recently announced government incentives
and programs. This shouldn't be done blindly. Ensure every new
initiative or project fits into your overall business strategy, and
takes you one step closer to achieving long-term goals.
Manufacturers typically have to respond to market forces
swiftly, which all too often means they're already on top of a
project before applying for funding. This may be too late to
qualify for some of the budget's proposed funding programs,
which require companies to apply for funds before making any
These programs are designed to encourage manufacturers to invest
more, and accelerate the adoption of clean energy equipment and
practices, but the requirements may make some manufacturers leery.
After all, the application process alone will likely be lengthy,
not to mention approval and funding.
This doesn't have to be a deterrent. The key is to build
realistic timelines into your business plan. Consider how long it
will take to thoroughly
research the funding options at hand and position projects so they
align with funding requirements.
It's also wise to factor in enough time to fill out the
application, ask necessary questions and get approval.
These steps will increase your chances of acquiring available
government funds and allow you to gauge the ideal time to launch a
specific project or invest in new equipment.
No changes were made to the federal government's existing
Scientific Research & Experimental Development (SR&ED)
program. Canadian-controlled private corporations (CCPCs) are still
eligible through investment tax credits (ITCs) to receive a refund
of up to 35% of the first $3 million of qualified SR&ED
expenditures. Keep this in mind if you are denied approval or did
not have time to complete the application process in advance.
With so much federal money earmarked for R&D across the 2016
budget, there are plenty of other funding opportunities available,
you just have to be creative. One way to do this is by
partnering with granting councils and universities, which are to
receive $95 million per year in additional funding for academic
research by finding new ways to commercialize new technologies or
use these institutions as outsourced R&D houses.
Regardless of whether you opt to partner with a university or
handle your R&D in-house, document every step of the process.
Any piece of technical or financial evidence supporting your
efforts, such as project planning documents, testing plans,
laboratory notebooks or records of trial runs, greatly increase
your chances of reclaiming R&D investment dollars.
Many of the optional clean and green technologies today will be
the legislative requirements of tomorrow – requirements
you'll be forced to meet, whether you're financially
prepared or not.
Get ahead of the tech curve and define your competitive position
on the world stage, while the government is helping to foot the
*As appearing in the July/August issue of PLANT
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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