Regional Economic Growth through Innovation Steel and Aluminum Initiative – Applicant Guide

The applicant guide has been updated to include additional information in the Business Description and Activities section. For more information contact us.

Table of Contents

Part I: Initiative guidelines

Overview

Canada's steel and aluminum sectors are key contributors to the Canadian economy, providing well-paying jobs and key inputs for major industries.

As part of a heavily integrated North American Supply Chain, Canadian small- and medium-sized enterprise (SME) users of steel and aluminum play an important role in transforming these inputs into finished or semi-finished products for the manufacturing, defence, aerospace, energy, automotive and construction industries. However, global market dynamics have significantly impacted SMEs operating within Canadian steel and aluminum supply chains. In this environment, SME users of steel and aluminum are challenged to make investments to strengthen their productivity and competitiveness.

In response, on March 11, 2019, the Government of Canada announced the launch of the Regional Economic Growth through Innovation Steel and Aluminum Initiative. Delivered by regional development agencies (RDAs) across the country, this $100-million national initiative, will provide non-repayable contributions to Canadian, downstream, SME steel and aluminum users for investments in innovative projects that will enhance productivity and/or augment firm competitiveness. These investments are expected to maintain and create jobs as well as promote economic growth through adoption of innovative technologies and processes.

In southern Ontario, the Federal Economic Development Agency for Southern Ontario’s (FedDev Ontario) allocation is $39.04 million.

On March 11, 2019, FedDev Ontario launched a call for project applications under the Regional Economic Growth through Innovation Steel and Aluminum Initiative. Priority will be given to applications received from March 11, 2019 to April 8, 2019. Applications will be accepted on a continuous basis, beginning on March 11, 2019, until all funding has been fully allocated. SME intensive users of steel or aluminum (i.e., steel and/or aluminum expenditures equal to or greater than 20 percent of total cost of goods sold), are invited to submit a project Application for Funding for consideration.

The Regional Economic Growth through Innovation Steel and Aluminum Initiative will provide non-repayable funding, ranging from $150,000 to $1 million to firms that are pursuing business growth and expansion by enhancing productivity/competitiveness. Funding decisions will take into account the minimum amount required to carry out the project and the level of innovation undertaken by the project. Applicants are eligible to receive up to 45 percent of total eligible projects costs. All project activities must be completed by March 31, 2020.

All project applications will be evaluated on their ability to achieve the Initiative's objectives and on their relative strengths in the following areas:

  • Financial capacity;
  • Management capability;
  • Market potential/demand;
  • Economic benefits;
  • Innovation benefits; and
  • Public benefits.

Only the strongest applications that demonstrate the highest merit and fit with objectives will be considered for funding.

It is highly recommended that you read this Applicant Guide, before submitting an Application for Funding. Applicants are encouraged to address all Application for Funding requirements and provide sufficient detail to enable thorough review and assessment. Incomplete applications cannot be assessed and may be deemed ineligible.

Objectives

The objective of this Initiative is to help bolster the productivity and competitiveness of SMEs operating within the Canadian steel and aluminum supply chain through investments in innovative projects. These investments are expected to maintain and create jobs as well as promote economic growth through adoption of innovative technologies and processes.

More specifically, the Regional Economic Growth through Innovation Steel and Aluminum Initiative will:

  • Assist firms with high growth potential to scale up and expand;
  • Support technology demonstration and the commercialization of new technologies;
  • Encourage the early adoption or adaptation of leading-edge technologies and processes to improve productivity; and/or
  • Increase businesses' capacity to grow.

Eligibility

I. Eligible Recipients

Applicants must meet the following eligibility criteria:

  • Businesses such as: partnerships, social enterprises, incorporated companies, corporations or co-operatives, or an Indigenous organization such as Indigenous/First Nation/Métis Settlement owned businesses, and all other types of enterprises;
  • Employ between 10 to 499 individuals on a full-time basis in Canada;
  • Intensive users of steel or aluminum (i.e., steel and/or aluminum expenditures are equal to or greater than 20 percent of total cost of goods sold); and
  • Capable of demonstrating plans for projects pursuing productivity enhancements, and/or innovations to augment firm competiveness.

II. Eligible Activities

Eligible activities include activities that support and accelerate business growth and competitiveness. Project activities defined as product and process improvements linked to productivity enhancing investments or operations, will be prioritized. These activities may include:

  • Productivity Improvement: acquiring, adapting, adopting new technologies, and/or processes; process re-engineering; improving manufacturing capacity.
  • Business Scale-Up: market development/expansion; diagnostics; adopting best management practices, processes and systems; business opportunity development.
  • Technology Commercialization: late stage product development geared toward market diversification and growth, such as technology showcasing and technology demonstration.

III. Eligible Costs

All costs must be reasonable and directly related to the eligible project activities. Eligible costs may include, but are not limited to:

  • Cost of labour (e.g., wages and benefits);
  • Capital costs (e.g., purchase of machinery, equipment);
  • Operating costs that are directly related to the project (e.g., management fees), up to 20 percent of the total project cost;
  • Professional, advisory and technical services;
  • Costs related to intellectual property;
  • Technological development and commercial demonstrations;
  • Subcontracting costs;
  • Production and distribution of promotional material and management tools; and/or
  • Maintenance costs.

IV. Ineligible Costs

Costs that are deemed unreasonable, or not directly related to project activities will be ineligible for reimbursement. These include, but are not limited to:

  • Basic and applied research;
  • Land and buildings acquisition;
  • Goodwill;
  • Entertainment expenses;
  • Salary bonuses and dividend payments;
  • Allowance for interest on invested capital, bonds, debentures and other debts;
  • Losses on investments, bad debts and associated expenses, other projects and contracts;
  • Refinancing of existing debts;
  • Amortization or depreciation of assets;
  • Federal and provincial income taxes, GST (recoverable portion), taxes or surtaxes on excess profit;
  • Provisions for contingencies;
  • Lobbying activities or commissions paid to consultants to secure funding; and/or
  • Donations, dues and membership fees.

Costs incurred prior to application submission date or after March 31, 2020, will not be eligible.

Funding

Financial Assistance

  • Minimum funding request of $150,000 up to a maximum of $1 million. Only one application per firm is permitted under the Initiative.
  • Contributions awarded will be based on the minimum amount required to carry out the project, and the level of innovation undertaken by the project.
  • Applicants are eligible to receive up to 45 percent of eligible projects costs (e.g., for strong innovation projects that represent a forward-looking strategy aimed at advancing productivity, competitiveness and the growth potential of the firm over time).
  • All contributions are non-repayable.
  • Total government assistance, from all sources (federal, provincial, municipal), will be limited to 75 percent of eligible costs.

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

Disbursement of funding

Payment of contributions will be based on reimbursement of eligible expenditures.

If you are successful in obtaining funding for your project, FedDev Ontario will provide funding based on submitted claims. FedDev Ontario will reimburse you for the approved portion of eligible project costs that you have incurred and paid. Since successful applicants must submit a claim for reimbursement, there will be a delay between the time costs are incurred, and when claimed costs are partly reimbursed. Successful applicants will therefore need to plan their project cash flow accordingly. FedDev Ontario will provide detailed instructions on this process to those applicants approved for funding.

Other Government Assistance, Science Research & Experimental Development and Other Tax Credits

FedDev Ontario considers tax credits received for activities undertaken between the project's start and end date as a source of government assistance. Such credits are considered for calculating the total amount of government funding that has been provided to a project.

Successful applicants who are in receipt of Scientific Research & Experimental Development (SR&ED) tax credits and other similar federal or provincial tax credits for activities defined in the project are required to inform FedDev Ontario. FedDev Ontario is required to take into account all federal, provincial and municipal government assistance that will be obtained for your project. This calculation includes all of the tax credits to which your company may be entitled. The total of these government contributions must not exceed 75 percent of the eligible costs. Applicants are advised to seek independent professional advice to determine the potential effect of Regional Economic Growth through Innovation Steel and Aluminum Initiative funding on project activities for which SR&ED tax credits, or other federal and provincial tax credits, are likely to be sought.

Application process

  • A continuous intake of applications will be accepted, with priority given to applications received on or before April 8, 2019.
  • Once the funds are fully allocated, applications will no longer be accepted.
  • Multiple and concurrent project submissions from the same applicant are not permitted.

Application for Funding

To be considered for funding, projects will need to complete a sufficiently detailed Application for Funding, which will allow FedDev Ontario to thoroughly review and validate the information against the eligibility criteria.

Submissions to the Regional Economic Growth through Innovation Steel and Aluminum Initiative must include:

  • A completed Application for Funding, with a request of at least $150,000 and no more than $1 million.
  • The company's audited financial statements for the past three years. If audited statements are not available for the current operating year, acceptable financial statement standards could include:
    • Review engagement;
    • Notice to reader; or
    • CFO attested, or by the CEO if a company does not have a CFO.

The Application for Funding will be assessed based on the mandatory Regional Economic Growth through Innovation Steel and Aluminum Initiative criteria, as well as the viability of the firm and innovation, economic and public benefits of the project.

Assessment process

The Regional Economic Growth through Innovation Steel and Aluminum Initiative assessment will be a competitive process. Applications will be evaluated on their ability to achieve the Initiative’s objectives and on their relative strengths in the following areas:

  • Financial capacity;
  • Management capability;
  • Market potential/demand;
  • Economic benefits;
  • Innovation benefits; and
  • Public benefits.

Confidentiality

All proprietary data, commercially sensitive information and potentially valuable results or ideas will be protected from unauthorized, inadvertent or untimely disclosure. This information will be treated in accordance with the Access to Information Act and the Privacy Act.

These laws govern, protect and limit the collection, use and disclosure of personal and confidential information by federal government departments and agencies. Confidential commercial information will not be shared without the applicant’s consent.

Reporting requirements

All contribution agreements will include performance indicators to measure the individual project performance and the project’s effectiveness relative to objectives of the Initiative. Recipients will be required to submit, along with funding claims, regular progress reports and financial statements throughout the duration of the project.

Part II: Regional Economic Growth through Innovation Steel and Aluminum Initiative – Application for Funding

Overview

This Applicant Guide has been developed to provide instructions to applicants on how to complete FedDev Ontario's Application for Funding for the Regional Economic Growth through Innovation Steel and Aluminum Initiative.

The purpose of the Application for Funding is to:

  1. Provide a detailed description of the proposed project, what the business or organization hopes to achieve by undertaking the project, and how the project will benefit the SME operating in globally dynamic steel and aluminum markets; and
  2. Demonstrate that the applicant has the management, technical and financial capacity to complete the project.

This Guide is organized according to the sections of the Application for Funding. When completing the Application for Funding, applicants are expected to complete the fields in each section or indicate if a field is not applicable.

Please limit individual answers to the space provided in the Application for Funding. The use of point form (or bulleted lists) is acceptable, provided that the information is clear. Supplementary materials other than those identified in the Application for Funding will not be reviewed as part of the submission.

By signing and submitting the Application for Funding, the applicant acknowledges that the information contained therein is subject the Access to Information Act and the Privacy Act.

Applicants are encouraged to contact FedDev Ontario if they have any questions regarding the Application for Funding. For more information, call 1-866-593-5505.

Completing the Application for Funding

This section provides information on how to complete the various sections of the Application for Funding.

  1. Legal name of Applicant: The name of the incorporated business or organization.
  2. Is operating name same as legal name: (Y/N)
  3. Operating name (if different from legal name): The name under which business is publicly conducted. e.g., 123456 Ontario Ltd operating as XYZ Technologies.
  4. Type of Organization — Is the Applicant a subsidiary? If yes, identify the parent entity and its location (city, country): A subsidiary is a company which has a controlling interest in its shares owned by another company. Provide the legal name of the parent entity and head office location.
  5. Applicant Location: The complete mailing address where the business is located.
  6. Business Number / Enterprise Number: The business number is a unique 9-digit number assigned by the Canada Revenue Agency.
  7. If applicable, date of Incorporation: (YYYY-MM-DD): The date stated on the company's Articles of Incorporation.
  8. Location of Incorporation: Identify Federal or specific province.
  9. Number of years the business has been in operation.
  10. Number of full-time employees in Canada: A full-time employee usually works between 35-40 hours or more in a regular work week.
  11. Number of part-time employees in Canada: A part-time employee usually works less than 35 hours in a regular work week.
  12. Mailing Address the same as the Applicant Location: (Y/N) (if not, then provide).
  13. Website: URL of the organization’s website.
  14. Authorized Project Contact: Provide contact information for the person who is authorized to represent the business or organization, and who will be the main point of contact regarding the project.
  15. Authorized Secondary Contact: Also provide contact information for a secondary contact that can be reached should the main contact be unavailable.

    *If either the primary or secondary contacts are not a signing officer of the business or organization, confirmation of that person's right to represent the company may be required.

    **Note: authorized contacts cannot be a consultant, as the RDAs will only communicate with the applicant.

  16. Voluntary Information

    Please indicate if your project and/or company is led or majority-led by underrepresented groups, such as Women, Indigenous Peoples, Member of Official Languages Minority Communities, Youth, Persons with Disabilities, Newcomers to Canada and/or Visible Minorities: Constitutes an individual and/or a group from one of the identified underrepresented groups listed either:

    • Owning 50 percent or more of the organization; or
    • Having long-term control and management of the business, contribution of capital and an active role in both strategic and day-to-day decision making.
Business Description and Activities
  1. Provide a brief description of the applicant and its principal business lines: For the purposes of this application, principal business line refers to the main areas of business which generates sales for the company.
  2. What percentage of your firm's cost of goods sold does steel and/or aluminum represent? Check applicable percentage.
  3. Please provide a high level breakdown of your major input costs by percentage: This table will help determine the distribution of the applicant’s cost of goods sold and the relative proportion of the applicant’s steel and/or aluminum input cost.

    Applicants should report total cost of goods sold in accordance to the Cost of sales component of the T2 Schedule 125 (Income Statement) as defined by the Canada Revenue Agency in the General Index of Financial Information (GIFI), (p.21-22), which includes opening and closing inventory, purchases/cost of raw materials, direct wages, benefits on direct wages, trade and sub-contracts, and production costs other than resources. It is important to note that any item covered under Operating expenses, such as advertising and promotion, amortization of tangible assets, repairs and maintenance, and supplies (see GIFI, p.22-25, for a full list) should not be included in the calculation of cost of goods sold.

    For reporting the costs specifically related to the acquisition of steel/aluminum, please provide the total value of steel and aluminum materials purchased during the fiscal year.

  4. Please describe the impacts of current steel and aluminum market conditions on the state of your business, e.g., material costs increases, reduced sales volume or revenue, lost business or contracts, etc.:
    • Is your firm suffering reduced revenues, lost market share, at risk of layoffs, etc.? Provide details on the impacts.
    • How is your firm currently mitigating the impacts of the steel and aluminum tariffs?
    • How will the proposed project mitigate the impacts of the current steel and aluminum tariffs?
    • Is the proposed project part of a strategic, forward-looking plan to advance business growth?
    • Does your project include the adoption of innovative technologies and/or processes that will secure the competitiveness of the business in future years? Explain.
Project Information
  1. Project Title: Provide a project title that accurately reflects the activities and outcomes of the project. Should your project be approved, this description will be disclosed on FedDev Ontario's public website as part of its proactive disclosure guidelines.
  2. Estimated Start Date of Project and Estimated End Date of Project: Start date is the first day you anticipate incurring expenses for your project. Note that project expenses incurred prior to application submission date will be considered ineligible. The end date is the last day you anticipate incurring expenses for your project. Note that all projects activities must be completed by March 31, 2020.
  3. Project Description: This should provide an understanding of why you are seeking financial assistance, how you will use the funds, and how the funds will support the commercial objectives of your organization.
  4. Provide a brief description of the main project objectives: Describe strategic rationale for undertaking your project, how it fits with your mandate and business model (i.e., would be applicable whether funding is obtained or not). How will it achieve the objectives of the Regional Economic Growth through Innovation Steel and Aluminum Initiative?
  5. Provide a brief description of the expected outcomes: Briefly describe the anticipated outcome(s) of the project. The outcomes are the anticipated results from the project. This provides an understanding of how the project will impact the company and what it is trying to achieve:
    • If you have a technology commercialization project, provide an overview of your technology (product/service/process) that describes what it does and why you believe your technology is innovative. Highlight the unique advantages of your technology, including where appropriate references to advantages such as total cost, speed to implement, ease of use and adoption, maintenance and support, and stability of technology and company.
    • If you have a productivity improvement project, describe the technology, equipment, and/or processes that will be adopted and whether the technology is new to your company, the industry, and/or to Canada. Identify if and how the technology/process is leading-edge or innovative. Describe the productivity or efficiency savings that will be realized, and how this will enable your company to grow and expand.
    • If you have a business scale-up project, describe how the primary actions of the proposed project will enable your company to accelerate growth. What scale of operations do you have now, what scale do you want to achieve and why (e.g., market demand)? What actions do you propose to take to achieve this scale? This could include adopting best management practices, processes and systems; market development and expansion activities; and business opportunity development.
  6. List the main activities being undertaken to complete the project: Provide a list of significant project activities or project milestones that can be measured and tracked to ensure the project is proceeding as planned. These should be significant milestones that will be used to measure your project's performance over the course of the project (i.e., achievement of objectives and outcomes).
  7. Provide the physical address where the project will occur.
  8. Check yes or no for each question (i.e., A-D).
Project Benefits
  1. Economic Benefits: Describe the benefits to your business that will result from the project, i.e., impact on sales, employment retained or created etc.

    All values provided under this section must be measurable and verifiable. If the applicant selects "No" for any of the options, then it is not necessary to provide a value in the "Amount/Description" column.

    All amounts reported in this section must be measured from the estimated Start Date of the Project to the End Date of the Project. Any benefits that fall out of this timeframe that the applicant wishes to highlight should be included in the prior question relating to how the project aligns with the Regional Economic Growth through Innovation Steel and Aluminum Initiative.

    Jobs to be created and maintained: In the chart provided, indicate the total number of full-time equivalent (FTE) jobs to be created and maintained in the time frames listed. Calculate any FTE jobs as the employment of one person full-time, or more than one person part-time, such that the total working time as equivalent of one person working full-time. Generally, full-time positions will involve between 35-40 hours in a regular work week. Do not include FTEs employed by suppliers or contracted services. Jobs must be a direct result of project activities.

    New intellectual property (IP) created or licensed: Indicate the number of new intellectual property expected to be created or licensed as a direct result of this project. This can include IP created or licensed by either the applicant or a project partner.

  2. Innovation Benefits: The completion of the project may result in innovation benefits. Choose all that apply and provide supporting explanation for each item separately.

    Good or Service Innovation: Good or service innovation is the market introduction of a new or significantly improved good or service with respect to its capabilities, user friendliness, components or sub-systems. Good or service innovations (new or improved) must be new to your business, but they do not need to be new to your market.

    Process Innovation: A process innovation is the implementation of a new or significantly improved production process, distribution method, or support activity for your goods or services. Process innovations must be new to your business, but they do not need to be new to your market.

    Organizational Innovation: An organizational innovation is a new organizational method in your business practices (including knowledge management), workplace organization or external relations that have not been previously used by your business. Organizational innovations must be the result of strategic decisions taken by management. Exclude mergers or acquisitions, even if for the first time.

    Marketing Innovation: A marketing innovation is the implementation of a new marketing concept or strategy that differs significantly from your enterprise's existing marketing methods and which has not been used before. Marketing innovations require significant changes in product design or packaging, product placement, product promotion or pricing.

  3. Public Benefit: Use the table below to describe the public benefits of your project.

    If applicable, provide details on how the project will result in additional public benefits. The intent here is to rate the extent to which this project is likely to secure or increase spinoff activities within the community or fulfill policy goals such as environmental, training or business collaborations.

    Local Community Benefit: Detail any benefit that flows back to the local community by addressing a local need or deficit.

    Environmental Benefit: Detail any way the project can contribute to clean growth and the transition to a low carbon economy by developing and adopting technologies that reduce GHG and air pollutant emissions through more productive and sustainable processes.

    Training Opportunity for Workers: Training is identified as a program that helps employees learn specific knowledge or skills to improve performance in their current roles.

    New Business Collaborations: Indicate the forecasted number of formal collaborations or partnerships that will be established during the project. A formal collaboration must include a signed agreement outlining each party's role and contribution toward the project. A collaboration or partnership must be specific to the project activities and contribute to the overall objectives of the project.

    New Research Collaboration: Indicate the forecasted number of formal collaborations or partnerships with higher education institutions that will be established during the project. A formal collaboration must include a signed agreement between project partners outlining each party's role and contribution toward the project. A collaboration or partnership must be specific to the project activities and contribute to the overall objectives of the project.

Corporate background
  1. Provide a brief summary of the key management staff that will manage the project, i.e., prior experience, education, professional designation, etc. Please keep your responses brief. For management biographies, please limit 2-3 lines per person and highlight the expertise required to manage and/or complete the project.
  2. Has your company received government funding in the last five years from either federal, provincial and/or municipal sources? List the source of the funds (level of government and program name) and the total money provided by the government.
Financial information

This section will allow FedDev Ontario to assess your organization's capacity to undertake the proposed project. The following two items are required and applications cannot move forward without them.

  • Attach your company's audited financial statements for the past three years (2016, 2017, and 2018)*

    * Audited statements must be provided for 2016 and 2017. If audited statements are not available for 2018, acceptable financial statement standards could include:

    • Review engagement;
    • Notice to reader; or
    • CFO attested, or by the CEO if a company does not have a CFO.
  1. Attach your company’s proposed project plan (i.e., internal project plan that received management approval) and projected budget for the project as well as your company’s audited financial statements for the past three years.
  2. Check the box: "The above documents have been attached."
  3. Provide an estimate of total project costs in Canadian dollars using the table below:
    Direct Labour $
    Project Management $
    Direct Materials $
    Subcontractors $
    Equipment $
    Other Direct Costs $
    Total Project Cost $
    Funding Requested: $

    *Note: Project Management should not exceed 20 percent of the total project costs.

  4. Indicate your other sources of funding for this project using the table below:
    Source Funding Amount Status
     
     
     
    Total Funding:

    Source: Where applicable, select the description that best reflects the funding source: Federal, Provincial or Municipal government body, or non-government.

    Status: For each funding source, indicate the status (confirmed, pending, not confirmed). In the case where your business is a source of funding, indicate yes if you have cash on hand.

Authorization

Carefully read the Authorization section and indicate that you have read and agree with the applicant acknowledgements and certify that all statements and information furnished in this application are true, complete and correct to the best of your knowledge. The individual authorized to sign the application on your behalf has reviewed the application and agrees that the information provided is accurate.

  • Check box acknowledging that the document is an attestation.
  • Check “agree to all above” and have signature from authorized company signatory.
  • Provide Name, Title, Signature, Date.
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