Canadian government grants don’t just cover small businesses. They’re also available to selected large industrial projects
When it comes to grants provided to businesses for Innovation, Canada has been a very generous country. Not many other industrialized countries have large government funding programs like the Strategic Innovation Fund, Superclusters, Sustainable Development Technology Canada (SDTC) Fund, and IRAP.
These funds offer grants up to millions of dollars. While the process to obtain approval for funding may take a number of months, and sometimes up to a year, the financial rewards are significant.
Given that only a portion of companies that apply will receive funding, it is important to understand the grant application process as well as the criteria upon which applications will be judged.
It is not all about technology
Most of these large grants fund R&D in some form or another. It is very easy to get lost in a grant application process. Some businesses spend an inordinate amount of time to describe their technology and its various benefits. They are proud of the R&D they are conducting and naturally would like program officials to know about it.
The reality is that while the grant program is interested in what you are developing, there are other criteria that must be met. These criteria primarily involve economic impact and the benefit to Canada.
The weighting that the program gives to technology as opposed to the economic impact of the project on your business and Canada, as well as the public benefit, is far less than most applicants think. So you don’t want to spend 90% of the time detailing the technology at the expense of these other important areas.
Who is the ideal applicant? Read between the lines
While it is not always crystal clear, most grant programs have an ideal applicant in mind. To determine if you are an ideal applicant, you need to read between the lines and see where the grant guidelines place their emphasis. For example, if the guidelines reference preferred industries with priority, make sure you fall squarely within that industry. If a collaborative project is required, have real project partners and not just partners that do window dressing. If there is certain range of project sizes and budget they are looking for, make sure your budget realistically falls within these parameters.
Also, be objective. If you don’t measure up to the ideal applicant, you likely have less than a 50-50 chance. Do you still want to apply given these odds?
What’s in it for Canada
The real term for a business grant is called a non-repayable contribution. This means the business applying needs to commit to carrying out its end of the project activities. In addition, the government wants to contribute to your business but there should be something in it for Canada. So, the question is: Will your project benefit the Canadian public and the Canadian economy? Will the project benefit the environment, the community, and result in knowledge transfer to skilled workers? Will there be inclusive hiring practices and gender balance and security for Canadians?
Think of a grant program as a VC
Many grant programs have been burned by companies that did not deliver what they promised in the grant application, such as adequate funding to complete their end of the project. Therefore, there are many grant applications that focus on an applicant’s management capabilities to execute the project, its strength to respond to market demand, and its financial health as well as its past successes. This is an area that should not be overlooked.
In addition, it helps if you quantify and support your assertions such as the ability to present a strong balance sheet and proof of successful execution in past projects.
When applying for large grants, there is little information on how the grant programs are rated or grant applications marked.
For example, in the UK, certain grant applications are “marked” out of a 100-basis point. Businesses that apply for grants receive a breakdown of marks followed by information on the required total mark to “win” a grant. For a technology grant, 10 marks are allocated to assess technology, 40 marks for the business plan, and 40 marks for its benefits to the public. It is interesting to note how little the technology is weighted in the overall assessment.
We believe that Canadian programs are not far off this weighing scale when it comes to application approval.
Many of the large grant programs have a two-step process. The first step involves completion of a statement or expression of interest. This is typically a much shorter form than the larger full application, which is part of the second step.
The benefit of this two-step process is that the grant program can start its selection process without the business having to spend too much time on preparing the full application. However, this stage is critical. You need to be succinct and to the point and touch upon all key areas, not just the technology. In other words, it is more about quality than quantity. If you pass the first step and are asked to submit a full application, your chances of funding increase significantly and that is great news.
There is an art to preparing large grant submissions. It helps if you put yourself in the position of a grant program official and ask yourself if you would fund your company. The program officials have to make a choice, why should they choose your firm over other applicants and how close do you come to their ideal applicant profile? Needless to say, it always helps to have experience with applying to these programs, but if you are new to the process keep the above points in mind.
To explore your eligibility and chances of approval for large grants such as SIF, SDTC, IRAP, or the Superclusters, contact us at
Brian Cookson is president and managing director of RDP Associates.