Business Scale-up and Productivity

Table of Contents


Scope & Objectives

The Business Scale-up and Productivity (BSP) Stream aims to accelerate the growth of firms and assist with the adoption and adaptation of new, innovative technologies that support scale-up, productivity, development of and entry into new markets to help companies become competitive in both domestic and global markets.

Through this program, FedNor seeks to:

  • Assist Northern Ontario firms 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.
  • Increase businesses' capacity to grow through market diversification and entry into domestic and global markets.

FedNor is targeting investments in innovative and trade-oriented businesses seeking to accelerate their growth.

Expected Results

Projects supported through FedNor's programs work towards achieving one or more of the following departmental results:

  • Businesses in Northern Ontario invest in the development and commercialization of innovative technologies, products, services and processes.
  • Businesses in Northern Ontario are innovative and growing.
  • Communities in Northern Ontario are economically diversified.

Eligibility

I. Eligible Applicants

  • Businesses: including an individual operating a business, 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.
  • Not-for-profit organizations: that provide services to businesses to support different stages of development to accelerate growth, enhance and assist scale-up (productivity enhancement, technology adoption, demonstration, etc.) or market expansion (e.g., sector based business-groups or associations, regional export promotion organizations, etc.).

Priority will be given to businesses.

To be considered eligible, project benefits must accrue to Northern Ontario.

All eligible applicants must be legal entities capable of entering into legally binding agreements.

To be considered eligible for funding, applicants must demonstrate:

  • A sustainable business model normally supported by two (2) years of operations.
  • Financial capacity to complete the project and repay the contribution in full.
  • Managerial, technical, and operational capacity to achieve the project's stated objectives in a timely manner.
  • Market/industry demand (e.g., how the project addresses a significant gap in the market; global opportunity to be seized within Canada; and evidence that Northern Ontario is uniquely positioned to capture market share).
  • Potential for market growth, diversification of export markets and/or participation in global value chains.
  • A viable project plan with achievable outcomes, supported by verifiable cost estimates.

This program is not intended to support smaller startups and entrepreneurs. Those entities may be eligible for FedNor funding as part of projects supported under the Regional innovation ecosystems Stream (RIE) (e.g., business accelerators and incubators).

II. Eligible Activities

FedNor is targeting investments in Projects with a focus in the areas of technology demonstration, adoption and adaptation as well as commercialization and market expansion, productivity and scale-up, and which contribute to the attainment of expected results.

Support is provided for growth, productivity, technology adoption, market development and investment attraction, directly to businesses and indirectly via organizations that support businesses, innovators and entrepreneurs.

Eligible activities include:

Technology demonstration, adoption and adaptation
  • Assessing, acquiring, adapting or adopting new technologies/processes and related skills development
  • Process re-engineering
  • Increasing/improving manufacturing capacity
  • Advanced manufacturing capacity development
  • Productivity improvement
Commercialization, Market Development/Expansion
  • Late-stage product, process or service development geared towards market diversification and growth, such as technology showcasing
  • Market diagnostics, development, and expansion
  • Integration in domestic and global value chains
  • Demonstration of new technologies/processes in an operational setting
Business Management
  • Building high-performance teams
  • Adopting best management practices, processes and systems
  • Improving governance and investment readiness
  • Business opportunity development
  • Increasing manufacturing capacity

III. Eligible Costs

Eligible costs include all costs incurred by the eligible recipient which, in FedNor's estimation, are reasonable and directly related to the eligible project activities, including:

  • Project-specific cost of labour (e.g., wages and benefits) and of material used;
  • Capital costs: purchase of machinery, equipment and infrastructure;
  • Operating costs that are incremental, measurable and directly related to the project;
  • Consultancy fees (e.g. professional, advisory and technical services);
  • Advisory expenses (e.g., planning, business information, counselling advisory services; coaching, mentoring or networking events; workshops or conference fees; fees associated with participation in business training through a business service organization);
  • Costs related to intellectual property;
  • Preproduction (e.g., technological development and commercial demonstrations);
  • Commercialization costs;
  • Costs related to expanding or maintaining markets;
  • Subcontracting costs;
  • Production and distribution of promotional material and management tools;
  • Anticipated cost of maintaining the useful life of an asset for a reasonable period; and,
  • Production of management tools.

IV. Ineligible and/or Unsupported Costs

Any costs deemed not reasonable and/or not directly related to the eligible project activities are ineligible, including:

  • Activities in support of regular maintenance and/or ongoing operation costs;
  • Regularly scheduled capital expenditures and/or asset replacement;
  • Costs incurred prior to the eligibility date as defined in the contribution agreement;
  • Any cost that is ineligible or unsupported under the contribution agreement;
  • Refinancing of an existing debt;
  • Costs of amortization and goodwill;
  • Acquisition of land and buildings;
  • Basic research; and,
  • The purchase of any assets for more than the fair market value of the said asset.

V. Ineligible Projects

  • Projects that are targeted primarily at retail consumer markets by retail or service businesses will not be considered.

Priorities

FedNor will work to ensure project applications align with the Government of Canada's Prosperity and Growth Strategy for Northern Ontario (PGSNO) Preference will be given to projects that respond to issues and opportunities identified in the PGSNO. These may include priority sectors and strategic clusters, or projects that reinforce Northern Ontario's economic and innovation strengths in areas of comparative advantages at the regional, national or global level.

Projects that support the government's commitment to inclusive growth (i.e., women and Indigenous peoples) and Official Language Minority Communities may be given priority.

Funding

Assistance available for SMEs is generally repayable.

Assistance available for not-for-profits includes repayable and non-repayable contributions. Contributions will normally be repayable where proposed projects generate profits for the eligible applicant.

The Business Scale-up and Productivity Stream will normally target investments up to a maximum of $500,000 per project. On an exceptional basis, FedNor may consider funding investments above that amount.

The amount of the awarded contribution will be based on the minimum amount required for the project to proceed, the extent to which other sources of available funding have been leveraged, and the applicant's ability to repay the contribution, if applicable.

Applicants are eligible to receive up to 50 percent of eligible and supported project costs.

Total government funding (including federal, provincial and municipal) for a project cannot exceed 75 percent of supported eligible non-capital costs and 50 percent of supported eligible capital costs.

The applicant must have secured funding of at least 50 percent towards the balance of the project's eligible costs. A combination of committed funding from accredited investors (angels, venture capitalists), growth capital, strategic partners, commercial financing, other government departments, and working capital is acceptable.

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

Project funding is subject to parliamentary approval of funds and to the maintenance of current and forecasted program-related budgetary levels.

Disbursement of Funding

If a project receives approval, a contribution agreement will be executed with FedNor. Funding will be disbursed on a reimbursement basis, calculated based on the percentage of funding approved for eligible costs incurred.

FedNor will allow for advance payments under this program based on the recipient's cash flow requirements.

To receive funding, recipients must submit claims forms, on templates provided by FedNor, that summarize eligible costs incurred and paid within a defined period. Generally, the duration of these periods will be quarterly.

Repayment

The specific terms of repayment, if applicable, 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. Repayment will normally begin no later than one year following the completion of the project.

Application Process

Applications are accepted on an ongoing basis with no submission deadlines. FedNor has a Two-phase application process and a Phase One Application for Funding that is used across all programs.

Refer to the Application Guide for instructions on how to complete FedNor's Phase One Application for Funding. Applicants are encouraged to review the Application Guide in conjunction with these programming guidelines.

Applicants are strongly encouraged to contact a FedNor Program Officer prior to submitting an application.

Multiple and concurrent project submissions from the same applicant are discouraged and may not be considered by FedNor; applicants are encouraged to prioritize project submissions.

FedNor reserves the right to initiate calls for proposals as deemed necessary to encourage applications in priority areas or sectors. FedNor also reserves the right to change the application process at its sole discretion.

Assessment Process

FedNor will review Phase One applications as they are received.

All applications will be screened initially for completeness.

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

Applicants that meet the program eligibility criteria will be notified and asked to submit a Phase Two application.

Phase Two applications will undergo a due diligence process where they are assessed against a number of factors. Assessment criteria include, but are not limited to:

  • Project's contribution to achieving the objectives of the Business Scale-up and Productivity Stream and government priorities.
  • Viability of the applicant. Early-stage companies must provide evidence of market demand and/or market traction, demonstrated by revenue as shown in financial statements, signed sales or distribution agreements, purchase orders, paid pilot or demonstration projects, or regulatory approval if applicable. For greater clarity, companies at earlier stages of development focusing on demonstration and commercialization should be able to demonstrate sustainability within three to five years to be considered under this program. More established companies must have a sustainable business model and a track record of profitability for the past two (2) years, as demonstrated in financial statements.
  • Demonstrated capacity of the applicant to successfully implement the project, achieve the stated objectives and fulfil its repayment obligation, if applicable. Factors to be assessed include managerial capacity, technical capacity, operational capacity and financial capacity.
  • Demonstrated market opportunity and demand.
  • Risks (financial, commercial, technical) and mitigation strategies.
  • Private sector leverage and risk capital.
  • Economic benefits of project.
  • Innovation benefits of project.
  • Demonstrated need for FedNor's investment and its incremental impact on the project in terms of scope, location, and timing.

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. Beyond the parties already mentioned above, confidential commercial information will not be shared without the applicant's consent.

Reporting Requirements

Recipients may be required to submit to FedNor periodic project reports and annual financial statements. Project reports will provide details on results and completion of deliverables, including achievement of performance indicators and project benefits identified in the contribution agreement.

Visibility and Communications Requirements

Recipients must agree to participate in a public announcement and other promotional activities linked to the Contribution, as outlined in the Communications requirements section of FedNor's website.

Service Standards

FedNor is committed to providing quality service to all applicants and funding recipients in the official language of their choice.

Our goal is to:

  • acknowledge receipt of an application within three (3) working days; and,
  • provide a decision on applications within eighty (80) working days of receipt of a fully completed application.

Other

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

Where applicable, FedNor requires that:

  • Applicants address the requirements of the Canadian Environmental Assessment Act, 2012, and reflect the spirit and intent of the Official Languages Act;
  • Capital projects respect Canada's obligation to consult and, where appropriate, accommodate Aboriginal communities;
  • Applicants use a fair, competitive and transparent procurement process to ensure the best value for money when supplies, equipment and services are purchased or personnel hired; and
  • An appropriate authority or regulatory body endorses the project.

Contact Us

Applicants are strongly encouraged to contact FedNor to discuss their project with a Program Officer, who will also explore other government programs that may be applicable, or begin your application process.

For more information on FedNor's programs, visit Our Programs, or call 1-877-333-6673. TTY (for hearing-impaired): 1-866-694-8389.

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