Investing in Business Growth and Productivity Guidelines

Background

The competitiveness of southern Ontario firms is increasingly dependent on achieving greater scale, improving productivity, market diversification, and integrating into global value chains.

The Investing in Business Growth and Productivity (IBGP) initiative will focus on established businesses that have potential to be global players with innovative and unique opportunities to accelerate growth and support job creation.

IBGP will also leverage the expertise of not-for-profit organizations to strengthen the productivity and global competitiveness of southern Ontario businesses.

Objectives

  • Assist established businesses to scale-up by expanding markets and facilities;
  • Increase adoption of new technologies and processes to improve productivity; and
  • Increase business capacity to participate in global markets through market diversification or expanding markets and integration in global value chains.

FedDev Ontario will provide funding to eligible projects under two streams:

  1. Small- and medium-sized enterprises
  2. Not-for-profit organizations

A. Small- and Medium-Sized Enterprises (SMEs)

Eligibility

I. Eligible Applicants

  • Canadian incorporated businesses;
  • Located in southern Ontario;
  • Normally employ more than fifteen (15) and less than one thousand (1,000) full-time equivalent (FTE) positions.

To be eligible for funding, Applicants must provide/demonstrate:

  • Evidence of a minimum of 75 percent cash funding available for the project;
  • A sustainable business model and a track record of profitability;
  • Potential to become strong global player;
  • Appropriate organization and project management and technical skills;
  • Evidence of the project's cost estimates; and
  • Capacity to account for and execute the project successfully in a timely manner.

Note: Incomplete applications cannot be assessed and considered for funding. All projects must be completed by December 31, 2018.

II. Eligible Activities

This initiative will support eligible SMEs to undertake activities related to:

  • Adapting or adopting new technologies, processes, and related skills development;
  • Business opportunity development, growth and integration in global value chains;
  • Facilities improvement or expansion;
  • Market development and expansion; and
  • Business expansion to support greater economic diversification.

III. Eligible Costs

Direct eligible costs for project activities may include:

  • Labour
  • Expertise
  • Non-capital
  • Capital

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

IV. Ineligible and/or Unsupported Costs

  • Any costs determined not reasonable and/or not directly related to the eligible project activities;
  • Costs incurred prior to the eligibility date as defined in the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) Contribution Agreement;
  • Any cost incurred after December 31, 2018;
  • Any cost that is ineligible under the Agency's terms and conditions and program policies; and
  • Acquisition of land and buildings.

Priorities

The Agency may give preference to certain priority sectors or projects that diversify a regional economy. Projects that are targeted primarily at retail consumer markets will not be considered under this initiative.

Funding

SMEs will be eligible for a repayable contribution towards eligible costs to a maximum of $20 million per project. Applicants are eligible to receive up to 25 percent of eligible project costs.

The applicant must have secured funding of at least three-quarters (75 percent) cash towards the balance of eligible costs. In-kind contributions cannot be considered as part of the applicant's cash contribution.

Support by FedDev Ontario is not intended to replace available commercial financing. Costs that could be, in whole, financed by equity, commercial financing, and/or capital markets will not normally be supported.

Total government funding (Federal, Provincial, and Municipal) for a project cannot exceed 75 percent of eligible non-capital costs and 50 percent of eligible capital costs.

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

Disbursement of Funding

If a project receives approval, a contribution agreement (contract) will be negotiated and executed. Funding will be disbursed based on the percentage approved funding 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.

Repayment

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.

Application Process

This is a continuous intake, two phased application process. In Phase I of the process, Applicants complete and submit a “Statement of Intent” that provides a high-level overview of their organization, the proposed project, and its impacts and benefits. Upon written confirmation from FedDev Ontario that the application can proceed to Phase II, Applicants will be asked to submit a full application.

Prior to submitting a Statement of Intent, potential Applicants are strongly encouraged to contact the Agency at 1-866-593-5505 for help with your application and to discuss other Government programs that may be applicable to your opportunity.

Phase 1 (Statement of Intent)

To be considered for funding the Statement of Intent must:

  • Confirm that the Applicant is a Canadian incorporated business, located in southern Ontario, and employing more than 15 full time employee equivalent positions;
  • Provide a brief overview of the organization, its business model, key customer segments, value proposition, and major competitors;
  • Describe related/affiliated parties;
  • Demonstrate a track record of profitability;
  • Demonstrate the potential to become a strong global player;
  • Provide a summary of the proposed project, its anticipated impacts on your business model, and its impacts in relation to program objectives and job creation;
  • Provide a summary of the proposed costs and financing (including status of financing);
  • Demonstrate the capacity to undertake the proposed project; and
  • Demonstrate the need for FedDev Ontario funding and its incremental impact on the project in terms of scope, location, and timing.

Phase 2 (Full Application)

If selected to proceed to Phase II (full application), the Applicant will be asked to provide additional detail and substantiation of the Phase I information, including:

  • Substantiation of the proposed market opportunity and projected revenues;
  • Financial projections and underlying assumptions;
  • The project description and implementation plan and schedule;
  • Substantiation of project cost estimates;
  • Substantiation of ownership/control of any assets required for the project (intellectual property, land/building for example);
  • Analysis of project risks and mitigation strategies;
  • Compliance with all relevant statutes, regulations and other funding agreements; and
  • Other information as required.

Application Review

FedDev Ontario will review applications as they are received. Funding will be made available as of April 1, 2014. All project activities must be completed by December 31, 2018. All applications will be screened initially for completeness. Incomplete applications cannot be assessed and considered for funding.

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. Incomplete applications cannot be assessed and considered for funding.

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

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

B. Not-For-Profit Organizations

Eligibility

I. Eligible Applicants

  • Industry associations and regional economic development organizations located in southern Ontario

To be considered for funding, Applicants must provide/demonstrate:

  • Evidence of any other project funding;
  • A sustainable project governance/business model and a track record of successful delivery of services to SMEs;
  • Extent that the project will accelerate the adaptation or adoption of new innovative technologies and/or processes to impact productivity of southern Ontario SMEs;
  • Appropriate organization and project management and technical skills;
  • Evidence of the project's cost estimates;
  • Compliance with all previous agreements with Government funding agencies; and
  • Capacity to account for and execute the project successfully in a timely manner.

Notes:

  • Incomplete applications cannot be assessed and considered for funding.
  • All projects must be completed by December 31, 2018.

II. Eligible Activities

The initiative will support activities of eligible incorporated not-for-profit organizations (such as industry associations or regional economic development organizations) to fund or collaborate with SMEs regarding the adoption or adaptation of technologies, processes and practices to improve productivity and to support SMEs integration into global value chains and market diversification.

III. Eligible Costs

For projects involving funding SMEs though eligible not-for-profit associations, the initiative will support costs incurred by eligible SMEs.

Direct eligible costs for project activities may include:

  • Labour
  • Expertise
  • Non-capital
  • Capital

All costs must be reasonable and directly related to eligible activities. Capital costs may be supported only for projects where the eligible activities involve funding SMEs to acquire new technology.

IV. Ineligible and/or Unsupported Costs

  • Any costs determined not reasonable and/or not directly related to the eligible project activities;
  • Costs incurred prior to the eligibility date as defined in the FedDev Ontario Contribution Agreement;
  • Any cost incurred after December 31, 2018;
  • Any cost that is ineligible under the Agency's terms and conditions and program policies; and
  • Acquisition of land and buildings.

Priorities

Projects that are targeted primarily at retail consumer markets will not be considered under this initiative.

The Agency may give preference to certain priority sectors.

Funding

Not-for-profit corporations will be eligible for a non-repayable contribution towards eligible project costs to a maximum of $20 million per project up to 100 percent of eligible costs.

For projects involving collaborations between not-for-profit organizations and SMEs, the ultimate beneficiaries must contribute a minimum 50 percent cash contribution to cover 50 percent of project costs. There is a limit of $100,000 per SME under an Agency project with a not-for-profit organization.

Fifty percent or more matching funding may be required for projects not involving third-party delivery of funding to SMEs.

Up to 10 percent of the contribution to not-for-profit organizations can be allocated to support outreach and project administration costs.

In-kind contributions will not be considered as eligible costs.

FedDev Ontario support is not intended to replace or duplicate funding available from other funding sources, including private-sector and/or government programs.

Disbursement of Funding

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

This is a continuous intake application process. Eligible organizations must complete and submit a full application to be considered for funding.

Prior to submitting an application, potential Applicants are strongly encouraged to contact the Agency at 1-866-593-5505 for help with your application and to discuss other Government programs that may be applicable to your opportunity.

To be considered for funding, the application must include:

  • Evidence that confirms the Applicant is a Canadian incorporated not-for-profit organization located in southern Ontario;
  • A summary of the organization's track record of supporting the development of SMEs in southern Ontario;
  • A brief overview of the organization, its current business model and services, and value proposition to SMEs;
  • A summary of the proposed project, an implementation plan and schedule and its projected impacts on the organization's business model;
  • How the project will improve the productivity of the businesses being supported;
  • A summary of existing key partnerships with other organizations and government programs;
  • Substantiation of project cost estimates and detailed cash flow requirements (including status of other funding);
  • Detailed information regarding project governance, the proposed delivery model, eligibility and funding criteria, and related processes for application intake, assessment, decision making, contracting, and payments to end recipients;
  • Demonstration of the organization's capacity to implement the project and account for project costs and results in a timely manner;
  • A summary of the reporting processes and formats with respect to projects funded and results achieved;
  • Substantiation of the need for FedDev Ontario funding and its incremental impact on the project in terms of scope, location, and timing; and
  • Compliance with all relevant statutes, regulation and other funding agreements.

Application Review

FedDev Ontario will review applications as they are received. Funding will be made available as of April 1, 2014. All project activities must be completed by December 31, 2018. All applications will be screened initially for completeness. Incomplete applications cannot be assessed and considered for funding.

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. Incomplete applications cannot be assessed and considered for funding.

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

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 Investing in Business Growth and Productivity initiative, please email us or call 1-866-593-5505.

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