Advanced Manufacturing Fund Guidelines

FedDev Ontario is no longer accepting applications through the Advanced Manufacturing Fund (AMF).

These guidelines are for reference only.

Background

Manufacturing is critical to Canada's prosperity, provides high-quality, well-paying jobs, and is an important contributor to strong economic growth in Ontario. While Ontario firms have competitive advantages in some knowledge-intensive sectors, they lag competitors in innovation, Information and Communications Technology (ICT) adoption, productivity and market diversification.

To address these challenges and support the efforts of manufacturing firms in Ontario to become more competitive, the federal government is providing $200 million dollars over five years to create the Advanced Manufacturing Fund (AMF).

Advanced manufacturing includes the development and/or adoption of cutting-edge technologies that demonstrate a commitment to product, process, and technological innovation.

Objectives

AMF will promote the long-term growth, productivity, and competitiveness of Ontario's manufacturing sector by:

  • Supporting large-scale, incremental, and transformative advanced manufacturing activities which will increase productivity;
  • Advancing development and/or adoption of cutting-edge technologies, leading to product, process, and technological innovations;
  • Encouraging projects that create spillover benefits for manufacturing clusters and/or global supply chains; and
  • Fostering collaborations between the private sector, research institutions, and post-secondary institutions.

Eligibility

I. Eligible applicants

AMF will support investments by manufacturing firms. There are two types of eligible applicants:

  • Established for-profit businesses located in Ontario that are incorporated in Canada. Eligible manufacturing firms are:
    • Undertaking manufacturing and research and development (R&D) activities in Ontario;
    • Undertaking manufacturing activities in Ontario; and
    • Conducting R&D in Ontario, but not manufacturing in Ontario.
  • The for-profit businesses must present a sustainable business model and have a track record of profitability.
  • Not-for-profit organizations (e.g., research institutions, centres of excellence, or post-secondary institutions) located in Ontario. Not-for-profit organizations require collaboration with an anchor firm and must demonstrate a significant benefit to the manufacturing sector.

Note: Please read a more detailed definition of anchor firm.

Under both streams, applicants must provide evidence of at least 50 percent support to the total project costs from industry (non-government sources).

All applicants must clearly demonstrate how their project responds to the following criteria:

II. Eligible activities

AMF supports investments that create new and innovative products or production methods, with market entry or commercialization within five years. Technologies developed and/or adopted under AMF must be new, or applied in a unique and innovative manner. Eligible activities in all projects include:

  • Activities related to prototyping, demonstration projects, advanced product testing, and applied research leading to a practical application;
  • Work undertaken to achieve technological advancement through the creation/improvement of existing materials, devices, products or processes; and/or
  • The adoption or adaptation of highly innovative products, technologies (e.g., machinery and equipment), and processes that support product or process innovation.

Eligible activities in projects led by not-for-profit organizations, in addition to the above, include industry-relevant, scientifically-advanced research in cutting-edge technologies with the potential to support commercial applications and a long-term competitive advantage for manufacturing in Ontario.

III. Eligible costs

Eligible costs may include:

  • Labour
  • Expertise
  • Capital
  • Non-capital

All costs must be reasonable, necessary, and directly related to eligible activities.

IV. Ineligible and/or unsupported costs

Any costs determined not reasonable, and/or not necessary, and/or not directly related to the eligible project activities will be ineligible. Any costs that are ineligible under the Agency's terms and conditions and program policies will not be supported.

Costs incurred prior to the eligibility date as defined in the FedDev Ontario contribution agreement will not be supported. Additionally, any costs incurred after December 31, 2018, will not be supported.

Activities in support of regular maintenance, operation costs, the purchase of conventional machinery and equipment, adoption of conventional technologies, and/or the retooling or duplication or expansion of existing equipment, production lines, facilities, or acquisition of land and buildings will be ineligible.

V. Ineligible recipients/projects

Ineligible funding recipients include:

  • Federal and provincial government departments, agencies, boards, corporations, and commissions;
  • Municipal governments; and
  • Not-for-profit entities not meeting the requirements under Section I: "Eligible applicants."
  • AMF will not support projects that are directly eligible under existing sector-based programs such as Canada's Strategic Aerospace and Defence Initiative (SADI) the Automotive Innovation Fund (AIF), and the Investments in Forest Industry Transformation (IFIT).

Priorities

Priority may be given to projects involving sophisticated niche sectors and/or sectors in which Ontario has a competitive advantage.

Funding

For-profit applicants

For-profit corporations will be considered for an unconditionally repayable contribution. The contributions provided will normally be between $10 million — $20 million per project for up to one-half (50 percent) of total eligible project costs. Projects seeking more than $20 million may be considered. Applicants must provide evidence of industry support for at least 50 percent of the remaining project costs.

Contributions will be unconditionally repayable. Repayments of contributions will be expected to commence as soon as reasonably possible, without compromising the success of the project or the organization receiving the funding. The specific terms of repayment including date of commencement and length of repayment term, will be determined on a case-by-case basis during the development of the contribution agreement. Repayments will begin no later then one year following the completion of the project.

Financial assistance from government programs may have tax implications for your business. It is recommended that advice be obtained from a qualified tax professional.

Not-for-profit applicants

Not-for-profit corporations will be considered for a non-repayable contribution. The contributions provided will normally be between $10 million — $20 million per project for up to one-half (50 percent) of total eligible project costs. Applicants must provide evidence of industry support (non-government sources) for at least 50 percent of the remaining project costs.

Up to 10 percent of the contribution can be allocated to project administration costs.

Note: No transfer of funds to a for-profit project participant from a not-for-profit recipient will be permitted.

Disbursement of funding

If a project receives approval, a contribution agreement will be negotiated and executed. Funding will be disbursed based on the percentage of funding approved for eligible costs incurred.

To receive funding, approved recipients must submit claims forms that summarize eligible costs incurred and paid in a period. Generally, these periods will be of a duration of no more than once a month and no less than twice a year.

Application process

There will be two timed intake periods during which applications can be submitted. Intake 2014 will start at 12:00 a.m. on December 9, 2013 and end at 11:59 p.m. on October 1, 2014. Intake 2015 will start at 12:00 a.m. on January 1, 2015 and end at 11:59 p.m. on October 1, 2015. Applications cannot be submitted during the three month hiatus in between the two timed intakes. Applications will be assessed as they are received.

Only one project can be submitted by an applicant per intake period. Eligible applicants who are not successful during Intake 2014 are welcome to submit a revised or new proposal in Intake 2015. Applicants who successfully secure funding as part of Intake 2014 cannot submit another application during Intake 2015.

Prior to submitting an application, potential applicants are encouraged to contact the Agency to discuss their project's fit with AMF's criteria and objectives.

As part of the application process, applicants will be asked to provide the following documentation:

  1. Incorporation documents and a summary of all related and affiliated parties, governance and ownership;
  2. Evidence of unencumbered rights to use the background intellectual property required for the project;
  3. Documentary evidence of the project's cost estimates;
  4. A comprehensive proposal satisfactory to the Agency that demonstrates:
    1. How the company and project meet the eligibility criteria and objectives of the initiative;
    2. How the project is innovative;
    3. The likely market relevance of the project;
    4. The likely spillover/economic benefits of the project;
    5. The likelihood that the project will be executed successfully in a timely manner;
    6. Compliance with all relevant statutes, regulation and other funding agreements;
    7. The track record of the management team and investors;
    8. Proof of adequate funding for the duration of the project;
    9. The extent to which the project is consistent with the capacity of the organization; and
    10. Compliance with all previous agreements with Government of Canada funding agencies.

Application review

FedDev Ontario will review applications as they are received. Funding will be made available as of April 1, 2014.

All applications will be screened initially for completeness. Incomplete applications cannot be assessed and considered for funding.

All project activities must be completed by December 31, 2018.

Complete applications are those that include all prescribed documentation containing all information needed to complete the review. Information should be accurate, verifiable, relevant and consistent.

FedDev Ontario reserves the right to modify these guidelines at any time without notice and may waive certain requirements on an exceptional basis.

Reporting requirements (applicable to all funding streams)

Recipients must submit to FedDev Ontario, reports of project expenditures and completion of deliverables, including achievement of performance indicators identified in contribution agreements.

Contact us

For more information on FedDev Ontario's Advanced Manufacturing Fund, please email us or call 1-866-593-5505.

Assessment criteria definitions

All projects must clearly demonstrate the following criteria:

1. Innovation

For the purposes of this program, innovations will be either:

  • Product innovations that result in new or significantly improved goods. Improvements may involve significant changes to technical specifications, components, materials, features, efficacy or other functional characteristics; or
  • Process innovations that result in a new or significantly improved production or delivery methods. Improvements may involve changes in techniques, time required to produce, yield, equipment and/or software.

Innovations result in new or significantly improved goods or production or delivery methods that are: novel; novel at the proposed scale and specifications in Canada; or, novel for a given industry or sector in Canada.

Activities that would proceed in a normal course of business development such as regular maintenance, operations, retooling or expansion of existing equipment or facilities, or the purchase of conventional machinery and equipment, and adoption of conventional technologies, are not considered innovations for the purposes of the program.

An applicant must demonstrate:

  • That the project meets the definition of product and/or process innovation(s) as defined above; and
  • The degree of innovation of the project (e.g., incremental improvements to existing products, processes, and/or technologies, creation of new products and production methods).

Return to the Eligible applicants section to continue reading the guidelines.

Return to the Application process section to continue reading the guidelines.

2. Market relevance

Innovation(s) are market relevant if they are expected to:

  • Result in increased market share or improved market position and contribute to market leadership and long-term opportunities, for example, by:
    • Advancing products for which market demand is significant as weighed against the required investment; and/or
    • Improve firm and/or supply chain competitiveness, for example, through increased product quality, cost competitiveness, or time-to-market improvements.
  • Be implemented or commercialized within five years.

An applicant must clearly demonstrate:

  • That the innovation(s) advanced by a project are market relevant; and
  • In the case of not-for-profit led projects, that an anchor firm has made a significant financial commitment to the project, weighed against the size of the project.

An applicant must clearly describe:

  • The anticipated impact of innovation(s) on market demand and market position, including market diversification and long-term opportunities;
  • How the innovation(s) will be leveraged for economic gain, including details around elements such as timing, target markets, and impact on customer channels;
  • The potential impact of activities by competitors on market position and long-term opportunities;
  • How the innovation(s) will be implemented or commercialized within five years; and
  • Technical, regulatory and market access risks and any risk mitigation strategies.

Return to the Eligible applicants section to continue reading the guidelines.

Return to the Application process section to continue reading the guidelines.

3. Spillovers/economic benefits

Spillovers are benefits generated by a project, in excess of those accruing to a participating applicant, which strengthen supply chains, sectors, and shared assets.

  • Strengthening the supply chain:
    • Increasingly, competitiveness is enabled not only by a firm's capabilities, but also by the capabilities of its supply chain.
    • To the extent that firms are able to rely upon increasingly productive suppliers, the entire supply chain becomes more competitive, to the benefit of the economy at large.
    • Supply chain collaboration may include: supply chain involvement in research activities, technology diffusion/transfer, skills development, sharing of best-practices, and increased linkages between anchor firms and small- and medium-sized enterprises (SMEs).
  • Strengthening the sector, complementary sectors, and shared assets:
    • For example, this could include strengthening the capacity of co-located companies, research organizations, and industry-relevant academia.
    • Specific benefits may include: generating spin-off companies; knowledge or technology diffusion/transfer; creation of shared assets; skills development/sharing; attracting additional economic activity; potential applicability and uptake of the product or process innovation in other sectors; increased collaboration with academia (e.g., hiring of industrial interns or students).

These can be addressed in terms of short-, medium- and long-term benefits to Canada.

An applicant must demonstrate:

  • How its project will generate benefits for the Canadian economy, including positive impacts on supply chains and broader economic activity.
  • Specifically,
    • How supply chain partners will directly and indirectly benefit from the project and the estimated economic impacts expected to accrue to supply chains; and
    • The project's effects on Canadian industry more broadly. This could include increasing the skilled workforce, attracting new investments, and creating additional partnerships by sharing best practices.
  • That the activities related to the project will take place in Canada/Ontario.

Return to the Eligible applicants section to continue reading the guidelines.

Return to the Application process section to continue reading the guidelines.

4. Anchor firm

An anchor firm is a manufacturing firm committed to maximizing the potential of the project's innovation(s) internally and throughout its supply chain and the regional economy. It should demonstrate:

  • Market leadership;
  • Sufficient scale to facilitate collaboration across its supply chain and the regional economy, including with companies, post-secondary institutions, research organizations, and/or industry-relevant academia; and
  • Capacity to draw upon existing resources in order to: facilitate collaboration, support skills development and training, and ensure that the project contributes to spillovers and lasting economic benefits.

Return to the Eligible applicants section to continue reading the guidelines.

Return to the Application process section to continue reading the guidelines.

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