Canada: ISED Announces $950M Investment In Canadian Superclusters

Last Updated: June 26 2017
Article by Bruce Tattrie

On May 24, 2017, Innovation, Science and Economic Development of Canada (ISED) announced the details of its $950 million Innovation Supercluster Initiative (ISI) to support up to five innovation superclusters in highly innovative industries such as advanced manufacturing, agri-food, clean technology, digital technology, health/biosciences, clean resources, as well as infrastructure and transportation.

Applicants must be industry led consortia, including firms of all sizes and at least one post-secondary institution. Applicant activities must include technology leadership within the supercluster, through collaborative projects that enhance the productivity, performance and competitiveness of supercluster members.

ISI funding contributions will range from $125 million to $250 million over five federal fiscal years, ending in F2022. Contributions are not repayable.

ISI funding contributions must be matched by equivalent 1:1 cash and in-kind contributions from industry (maximum 25% in-kind).

Initial Letter of Intent applications must be submitted by 12 noon Eastern daylight time on July 21, 2017. The intention of ISI is to complete the application process, to negotiate and sign Contribution Agreements, and to make an initial advance of funds under the Contribution Agreements, before March 31, 2018.

This bulletin provides an overview of the ISI program, and will be of interest to organizations that are considering applying for ISI funding, and private sector enterprises that are being approached to make matching industry contributions to support applicant organizations.

Details of the ISI are available in the ISI Program Guide.

Objectives

The ISI invites industry led consortia to lead bold and ambitious programs to supercharge their regional innovation superclusters, and to achieve the following:

  • Build a shared competitive advantage for their cluster that attracts cutting-edge research, investment and talent by addressing gaps, aligning strengths, enhancing attributes, and positioning it as a world-leading innovation hotbed.
  • Increase business expenditures on R&D and advance a range of business-led innovation and technology leadership activities that will address important industrial challenges, and boost productivity, performance and competiveness for Canada's sectors of economic strength.
  • Generate new companies, and commercialize new products, processes and services that position firms to scale, integrate into global value chains, transition to high-value activities, and become global market leaders.
  • Foster a critical mass of growth-oriented firms, and bolster collaborations between private, academic and public sector organizations pursuing private-sector led innovation and commercial opportunities to enhance the cluster's pool of resources, capabilities and knowledge.

ISI Requirements

ISI requirements include:

  • Applicants must be industry led consortia. Participants in the industry-led consortium must be organizations incorporated in Canada and active in Canada.
  • Consortia must include firms of all sizes.
  • Each applicantion will require the participation of at least one post-secondary institution. Post-secondary institutions and other not-for-profit and innovation partners are encouraged to participate, but cannot lead.
  • Funding recipients (called Entities in the ISI Program Guide) must be incorporated under the Canada Not for Profit Corporations Act, must be membership based, must engage with member organizations to establish priorities and choose activities, must undertake projects and redistribute allocated ISI funds, and must monitor and report to ISED on activities and achieved results.
  • Entities are expected to redistribute portions of the funding they receive to fulfill program activities. Entity activities must benefit the broader ecosystem to which they belong, including members, non-members, and other Canadian organizations which have aligned interest or expertise.

Eligible Activities

Supercluster Strategies can be structured around five themes of activity eligible for co-investment under the ISI:

  • Technology Leadership. Collaborative projects that enhance the productivity, performance and competitiveness of member firms, such as: collaborative R&D projects; demonstration or prototype development projects with benefits for multiple firms; development of production methods and processes involving industry and academic partners; or private-sector led commercialization projects.
  • Partnerships for Scale. Activities serving a target group of cluster firms to enable their growth, including by increasing domestic demand for cluster products and services or by facilitating expansion, such as: linking start-ups with strategic partners; offering business mentoring, consulting and coaching; supply chain development or integration efforts for cluster SMEs with local anchor firms; or partnering with a public stakeholder/organization that provides access to capital and financing.
  • Diverse and Skilled Talent Pools. Activities enhancing regional labour force skills and capabilities or initiatives addressing industry needs for talent, such as: a recruitment campaign to repatriate Canadian talent to the cluster; development of curricula linked to industry's needs and workforce integration programs for students; development and promotion of specialized certifications in areas of technology leadership; re-training programs (e.g., digital skills) for the existing workforce; assessment of industry's current or anticipated workforce needs; or building awareness of industry demand for skilled talent across stakeholder groups (e.g., students, workers, firms, universities and vocational colleges, policymakers).
  • Access to Innovation. Investing in and providing access to assets, services or resources that benefit a range of cluster firms over a period of time, such as: support for access to specialized technical services; installation of and access to dedicated laboratory or cutting-edge equipment; or acquisition and assertion of jointly held intellectual property.
  • Global Advantage. Activities and initiatives that position the cluster and its strengths as world-leading, enable firms to seize market opportunities, and attract international investments and partnerships, such as: cluster promotion; investment attraction to cluster region; studies to identify new global markets for cluster products and services; participation in or leadership of trade missions to key geographic markets; development of regulatory or policy proposals to enhance domestic technology advantage; or development and promotion of new international standards that embed Canadian approaches.

Strategies are not required to address all five themes, but - to be eligible - a strategy must include technology leadership activities.

Entities will use ISI funding to design, select and carry out projects and initiatives to advance the activities proposed in their respective supercluster strategies. Allocated ISI funds may cover the Entity's costs or be redistributed to ultimate recipients undertaking projects, including Entity members and non-members, through "calls for projects".

Projects are expected to encourage Canadian-based firms, post-secondary institutions, and not-for-profit organizations to partner with each other, and/or with the Entity, and are expected to encourage collaboration and partnership between large firms and SMEs or start-ups to create opportunities to grow Canadian companies.

Activities should also generally be undertaken in Canada. With pre-approval from ISED in exceptional circumstances, funding could be extended outside Canada when necessary to advance specific priorities or projects and when the benefits will accrue to the cluster and/or build similar capacity among cluster members.

Eligible Costs

Costs for which ISI funding can be used are referred to as Funded Eligible Costs. Costs for which industry's matched funding can be applied, but which will not receive ISI funding, are referred to as Unfunded Eligible Costs. Generally, both types of Eligible Costs must be incurred in Canada. Entities will only be reimbursed for Eligible Costs that are reasonable and relate directly to the Eligible Activities.

Funded Eligible Costs include administration and operating costs, and project costs.

Administration and operating costs include costs that support the day-to-day operation of the Entity. Details of eligible administration and operating costs are provided in the Program Guide. ISI will contribute up to 75% of the eligible administration and operating costs. The remaining eligible administration and operating costs can be met by industry, other levels of government, and/or not-for-profit contributions. Eligible administration and operating costs are not permitted to exceed 15% of the total ISI contribution.

Eligible project costs relate to the activities undertaken to execute a supercluster strategy. Details of eligible program costs are provided in the Program Guide.

Unfunded Eligible Costs are costs incurred that are not reimbursable through ISI contributions. If these costs are covered by industry, are reasonable, and are directly related to the achievement of the Entity's supercluster objectives, they can be counted toward the mandatory industry matching funds requirement.

Certain costs are ineligible for ISI funding. Details of ineligible costs are provided in the Program Guide.

Matching Fund Requirements

Funding requested from the ISI must be matched 1:1 overall by industry contributions.

To be considered matching, industry contributions must be used to support Eligible Costs.

Up to 25% of the industry match can be in-kind contributions. The remainder must be cash.

Selection Factors

An applicant's value proposition must demonstrate the ultimate benefit of the proposed activities to the cluster and to Canada, including how it will generate real economic impact, commercial results, and global leadership for Canada by:

  • Building on a strong industry-led regional cluster (i.e., geographically proximate) with the capacity for world-leading performance, using a plan that will align and leverage regional assets, foster collaboration in sectors of economic strength, and grow an existing critical mass of SMEs.
  • Strengthening competitiveness of key sectors of a regional economy by involving leading firms representing those sectors and supporting activities that deepen integration within supply chains.
  • Building an innovation advantage and commercializing a strategic area of technology.
  • Extending the cluster-based strengths to a broader network with innovation partners across Canada.

The Program Guide provides additional information on the assessment criteria.

Application Process

ISI contemplates a two phase process, with an open call for Letters of Intent and a subsequent invitation-only Full Application.

Applications at the Letter of Intent stage are due no later than 12 noon Eastern daylight time on July 21, 2017.

ISED has not announced when it will complete its review of the Letters of Intent and invite Full Applications from those selected to proceed to the second stage. Industry participants expect that this announcement will likely be made mid-fall 2017.

Letters of Intent must include, at a minimum, five organizations: four private-sector enterprises, including: at least two large firms (500 employees or more); one medium firm (100-499 employees); one small firm (1-99 employees); and one post-secondary institution.

Full Applications must include, at a minimum, eleven organizations: ten private-sector enterprises, including: at least two large firms (500+ employees); at least one medium firm (100-499 employees); at least four small firms (1-99 employees); and at least one other small and medium-sized enterprise (1-499 employees); and one post-secondary institution.

Private sector organizations are required to provide Letters of Commitment and post-secondary institutions are required to provide Letters of Support.

Details of the application, selection and decision process and requirements for the Letter of Intent are specified in the ISI Program Guide and in the ISI Applicant Guide.

Successful applicants will be asked to sign a Contribution Agreement.

The intention of ISI is to complete the application process, to negotiate and sign Contribution Agreements, and to make an initial advance of funds under the Contribution Agreements, before March 31, 2018.

Program Administration

ISI funding contributions will be made over five federal fiscal years, from F2017 to F2022.

Generally, contributions will be made in the form of advance payments that must be reconciled through the submission of claims.

Applicants are encourage to seek other sources of government assistance, but the total Canadian government assistance for all projects is not permitted to exceed 100% of the funded Eligible Costs.

Entities will be subject to negotiated KPIs, will be required to collect, manage, and share data to report on achieved results and support program performance measurement, and will be required to provide extensive ongoing reporting to ISED.

Entities may be required to communicate, and to offer services, in both English and French.

Entities will be required to demonstrate on an ongoing basis how their project selection criteria encourage gender diversity among the ultimate recipients of funding.

Intellectual Property Strategy

Each Entity is required to have an intellectual property (IP) strategy setting out the Entity's role in achieving program objectives through IP-related activities. The IP Strategy must describe how protection for Entity-supported IP will be obtained, how rights will be owned and managed, and by whom, including: how background intellectual property will be treated; if and how non-Entity supported intellectual property will be acquired; and how royalties on Entity-supported IP will be managed.

The Entity is not required to own or directly manage Entity-supported intellectual property, but the Entity is expected to set policies to ensure that IP is managed in such a way that the ISI requirements are fulfilled.

The IP strategy must provide members of the supercluster with "frictionless access" to Entity-supported IP. The Entity is required to establish processes or procedures to ensure that all Entity-supported IP in whole or in part, is either owned or licensed in a manner that maximizes accessibility of all members of the cluster. Members that work directly on a project may earn preferential access to or ownership of the IP, compared to a member that does not participate. Other reasonable restrictions may include a tiered membership model under which greater contribution to the Entity entitles the member to greater IP access including the right to commercialize the IP or an aspect of it.

The requirement for frictionless access may be challenging for some projects.

IP generated by the Entity may be owned, in whole or in part, by one of the members, but must be accessible to all other members on appropriate and agreed-upon contract terms.

In addition, Entities are expected to create policies and procedures to ensure that Entity-supported IP is either being commercialized by members or that the entity is otherwise driving benefit from the IP.

Members who are entitled to make use of IP must be able to exercise that right without unreasonable delay.

Further information is available in the Program Guide.

Section 34 of the 1 provides that applicants will be evaluated on how their proposed IP strategy will benefit the economic development of Canada. If a proposed IP strategy is lenient in regards to Entity-supported IP leaving Canada, the applicant is strongly encouraged to explain how this and any other activities render the IP strategy to Canada's net benefit. Applicants will need to consider this FAQ very carefully, as many participants in Canadian superclusters will be global industrial players.

ITB Policy

The Industrial and Technological Benefit (ITB) Policy applies to all eligible defence procurements with a value over $100 million, and generally requires companies that are awarded defence procurement contracts to undertake business activity in Canada equal to the value of the contract.

Question 20 of the FAQs provides that industry private-sector investments towards an innovation supercluster, which are cost-shared by the federal government, are not eligible under the ITB. Any subsequent company investment into an established supercluster could be considered, and will be reviewed to determine if it meets ITB eligibility criteria.

Footnotes

1 ISED has advised that the FAQs will be updated regularly during the application process, and has recommended that interested parties revisit the site frequently for updates.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.