AgriInnovate Program: Applicant guide

Applicant guide

Purpose of this guide

This guide will:

1. help you determine if you may be eligible for funding from Agriculture and Agri-Food Canada (AAFC) under the AgriInnovate Program.
2. provide you with directions and explanations to assist you in completing the project application form.

Alternative formats

1.0 Canadian Agricultural Partnership

The Canadian Agricultural Partnership is a five-year, $3 billion investment by federal, provincial and territorial governments to strengthen the agriculture, agri-food and agri-based products sector. In addition, producers will continue to have access to a robust suite of Business Risk Management (BRM) programs.

The partnership will be in place by April 1, 2018.

The Canadian Agricultural Partnership will focus on six priority areas:

• Science, research, and innovation – to help industry use science and innovation to improve resiliency and increase productivity
• Markets and trade – to open new markets and help farmers and food processors improve their competitiveness through skills development, improved export capacity, underpinned by a strong and efficient regulatory system
• Environmental sustainability and climate change – to help the sector reduce its greenhouse gas emissions, protect the environment and adapt to climate change by enhancing sustainable growth while increasing production
• Value-added agriculture and agri-food processing – to support the continued growth of the value-added agriculture and agri-food processing sector
• Public trust – to build a firm foundation for public trust through solid regulations, improving assurance systems and traceability
• Risk Management – to enable proactive and effective risk management, mitigation and adaptation to create a resilient sector

The AgriInnovate Program is a program under the Canadian Agricultural Partnership.

1.1 About the AgriInnovate Program

Program objective

This program provides repayable contributions for projects that aim to accelerate the demonstration, commercialization and/or adoption of innovative products, technologies, processes or services that increase agri-sector competitiveness and sustainability.

Innovation definition

Innovation can be defined as one of the following:

• An invention, new technology, new process or new service that is not currently available in the marketplace.
• Significant modifications to the application of existing technologies, processes or services that are applied in a setting or condition for which current applications are not possible or feasible.
• An improvement to an existing technology, process or service that represents a significant (generally patentable) improvement in functionality, cost or performance of goods and services that are considered state of the art or new to the industry/sector.

Below is a visual chart outlining where the AgriInnovate Program fits within the innovation continuum:

1.2 Program priorities

In order to be eligible for funding, applicants must clearly demonstrate how proposed projects will demonstrate/commercialize an innovation new to the sector or country. Once the innovation requirement has been demonstrated, the program will then prioritize project applications that advance the government’s agenda through the following priorities:

• Adoption of new or world leading clean technology (including precision agriculture);
• Increase productivity through advanced manufacturing, automation or robotics;
• Strengthen Canada’s value-added agri-sectors;
• Secure or expand new export markets.

Projects that incorporate more than one program priority area will be given greater consideration.

1.3 Eligible applicants

An eligible applicant is a for-profit organization that is incorporated in Canada. They can include:

• Businesses and/or corporations
• Co-operatives
• Corporations and cooperatives in Indigenous communities

Note: Eligible Applicants must be legal entities capable of entering into legally binding agreements.

1.4 Eligible activities

Eligible activities include:

• Commercialization of innovative agricultural, agri-food or agri-based products, technologies, processes or services where the innovations will be introduced to the market when the project is completed.
• Adoption of innovative agricultural, agri-food or agri-based products, technologies, processes or services where recent innovations are adopted and adapted to existing operations.
• Demonstration of innovative agricultural, agri-food or agri-based products, technologies, processes or services, where necessary testing and piloting has been completed and the innovation is within 24 months of market, and which involve one or more of the following:
  • Demonstration to a targeted user in order to secure a key customer necessary to penetrate the market;
  • Production of samples for market validation; or
  • Creation of a reference or showcase site for pre-commercial demonstration.

Examples of the above activities may include, but are not limited to, the following:

• Expansion or modernization of a facility or site to demonstrate, commercialize or adopt an innovative agricultural, agri-food or agri-based product, technology, process or service;
• Purchase and installation of equipment;
• Training and development of staff necessary for the successful completion of the project; and,
• Marketing activities provided they form a minor component of a project. Projects solely involving the development or implementation of marketing plans are not eligible.

1.5 Funding and eligible costs

Applicants must clearly indicate all sources of funding for the project and that total funds are sufficient to support all eligible and ineligible project costs. Applicants must provide confirmation that all sources of funding (for example, bank statements, term sheets, confirmation of equity) for the project have been secured.

Maximum and minimum AAFC funding amounts

Applicants may apply for AgriInnovate Program funding up to 50% of total eligible costs, to a maximum of $10 million.

The maximum level of government funding (federal, provincial/territorial, and municipal) that an Applicant can receive towards the total eligible costs of a project cannot exceed 75% of eligible project funding.

In-kind* contributions and cash from future operations are not recognized as eligible under the program.

* In-kind means the fair market value attributed for goods and the fair value attributed for services, that are contributed to this project and require no outlay of cash during the term of the Contribution Agreement by you or a contributor.

Eligible costs

All costs claimed or contributed under the program must fall within the program cost categories and respect all limitations.

Costs incurred prior to the effective date and after the project completion date established by the program will not be eligible for funding. Any costs incurred prior to the signing of a Contribution Agreement will be incurred solely at the applicant’s risk without any obligation of payment by the program.

Eligible costs under the program are the incremental, relevant, reasonable and essential expenses required to carry out the eligible activities to which they relate as specifically set out in the Contribution Agreement.

Eligible costs will not necessarily include all or be limited to the following:

• Capital Expenditures
  • Renovations, site improvements, leasehold improvements, building purchase*, construction* and related costs;
  • Machinery, equipment, and software purchase and installation costs;
• Contracted Services
  • Professional or specialized services needed to undertake eligible project activities and for which contracts are entered into;
  • Costs of contracted work related to compliance with the Canadian Environmental Assessment Act 2012;
• Salaries/Benefits
  • Labour, including wages/salaries and benefits, and specific per diem fees;
• Other Direct Project Costs
  • Rental, lease of facilities, equipment or machinery;
  • Goods and services and all related shipping and transportation costs;
  • Construction or operating licenses and permits required to carry out the project;
  • Start-up costs, including interest capitalized during construction, insurance during construction, fees and charges for operation of equipment for adjustment and calibration, and training;
  • Production of materials required to fulfill obligations under the agreement, including translation and production of materials in the second official language;
  • Limited marketing costs, such as hiring of marketing expertise and other related activities as may be deemed necessary to the success of the project (a maximum of 20% of total eligible costs are available for marketing activities);
  • Materials/consumables needed to undertake the project; and
  • Other reasonable costs directly related to the project, at the discretion of AAFC.

*Building purchases and construction costs may be considered on a case-by-case basis by AAFC.

Ineligible costs

Ineligible costs include, but are not necessarily limited to:

• Capital items not specifically required for the execution of the project;
• Refundable portion of the Goods and Services Tax/Harmonized Sales Tax, value-added taxes, or other items for which a refund or rebate is received;
• Any cost, such as amortization that would not result in a direct, out-of-pocket expense for the recipient;
• Land (lease or purchase);
• Goodwill;
• Existing equipment or buildings owned by a related party;
• Hospitality (for example, alcohol, meals, entertainment, gifts, etc.);
• Travel;
• Research and development costs;
• Costs related to regulatory compliance (all regulatory permits must be satisfied prior to applying)
• Any portion of any cost that, in AAFC’s opinion, exceeds the fair market value for that cost item; and,
• Any other expenditure not specifically listed as eligible or otherwise approved as eligible.

1.6 Application deadlines

Applications will be accepted on a continuous basis from February 13, 2018 until March 31, 2023, or until funding has been fully committed or until otherwise announced by the program. The program ends March 31, 2023.

For information on how to complete a project application, refer to Annex A: How to Apply.

2.0 Expected results

The expected results of the AgriInnovate Program are:

• Support is provided for innovation-related activities, specifically those that are at the final stages of the innovation continuum, involving the commercialization and/or adoption of products or processes across the agriculture and agri-food sector.
• Innovations in the agriculture and agri-food sector are generated and commercialized.
• The Canadian agriculture and agri-food sector is effective in transforming ideas into new products, processes and practices.

3.0 Assessment criteria

Program principles

Applications under the program will be assessed based on the program principles. The core principle is proposals must drive innovation; once this has been established projects should demonstrate:

• Level of innovation
  • Projects proposing cutting edge innovative products, technologies, or processes will be given higher priority than those projects adopting existing proven technology.
• The technical feasibility of the proposal
  • Provide evidence to demonstrate that the innovation has been tested and is ready for the next stage of commercial development.
• Proposal is market oriented
  • Demonstrate the potential increased demand for primary agriculture and agri-based inputs, increased revenues, and job creation.
  • Demonstrate a market need and demand for the product, technology, process or service, both domestically and internationally.
• The Applicant’s capability
  • Demonstrate the ability to successfully implement, manage, and complete a project on time.
  • Demonstrate a solid history of sound financial management through analysis of financial statements.
  • Ability of the applicant to secure financing.

Other Considerations

Alignment with program objectives and departmental priorities:

• Applications that do not respond to the range of priority areas may be assessed for lower AAFC contributions, require higher industry contributions, or both
• Applications that align, to a lesser degree with the priorities will be viewed as lower importance to the department, and may not be considered for funding
• Applications that provide benefits to Canada such as: increased revenues or decreased operating costs in the agricultural sector, increased demand for primary agriculture and/or agri-based inputs.

These program principles must be substantiated, to AAFC’s satisfaction. Priority may be given to highly innovative projects over the other principles of the program.

Additional Information

AAFC may consult applicants to obtain clarification on details of their application or additional information, where deemed necessary for assessment. Once the assessment process is complete, the applicant will be sent an approval or a rejection notification letter. If the project is approved for funding, the letter will specify the level of funding awarded and outline any other conditions that may apply. A program representative will then work with the applicant to complete a Contribution Agreement.

Applications under the AgriInnovate Program will not be processed on a first come, first served basis. The program reserves the discretion to give precedence to projects that fall within the cited priority areas of the program. The program will render funding decisions in accordance with published departmental service standards.

Please note that even if a project meets all eligibility criteria, the submission of an application creates no obligation on the part of the Minister or of Agriculture and Agri-Food Canada officials to provide funding for the proposed project. The Minister retains discretion to determine, based on other public policy and public interest considerations, whether an application that meets the criteria identified in this Guide will ultimately receive funding.

4.0 Reporting on your project and repayment requirements

Should you be approved for funding, you will be required to report on finances, performance and results. These reports include:

Progress reports

You will be required to provide progress reports describing the activities completed and progress made towards deliverables, as described in the Project Work Plan.

Performance reports

You will also be required to provide performance reports annually and at the end of the project. The reports will track progress against mutually agreed to performance measures outlined in the Contribution Agreement.

Financial reports

Financial reporting is required with each request for reimbursement of expenditures, in addition to year-end accounting and other financial reports.

Other reports may be required at AAFC’s discretion.

Repayment requirements

Contributions will be repaid over a period of up to 10 years following project completion. The amount to be repaid and the schedule of payments will be set out in the negotiated Contribution Agreement. Repayments will normally begin 1 year following the completion of the project.

Interest is not charged on the contribution funding, with the exception of late payments and debts owed to the Crown, should such situations arise.

5.0 Considerations

5.1 M-30 Act (Quebec organizations only)

The M-30 legislation applies for Quebec based applicants only. It is the Act Respecting the Ministère du Conseil exécutif (R.S.Q., c. M-30).

Organizations located in Quebec and receiving more than half of their financing from the Government of Quebec may be subject to the Act.

More information on the Act is available online or by contacting the Ministère de l’Agriculture, des Pêcheries et de l’Alimentation (MAPAQ) at dpci@mapaq.gouv.qc.ca.

All Quebec based organizations will have to address this matter and demonstrate their compliance with the Act during the project assessment process, and prior to entering into a Contribution Agreement.

5.2 Intellectual property

The Contribution Agreement will contain an intellectual property clause which will confirm that all title to the intellectual property in any materials created or developed by or for the recipient of contribution funding will vest in the recipient or in a third party, as may be negotiated by the recipient. However, AAFC may, at its sole discretion, include a provision in the Contribution Agreement requiring the recipient to grant, or ensure that third parties grant a non-exclusive, worldwide, perpetual, royalty-free license to the Crown to such material, in whole or in part, in any form or medium, for internal government Fund administration purposes.

6.0 After you apply

Once an application has been submitted, an acknowledgment notice will be forwarded to the applicant.

Note: You should not consider an application as submitted to the program until you receive the acknowledgement notice.

Our goal is to:

• respond to general inquiries made to our phone number or email address before the end of the next business day
• acknowledge receipt of your application within one business day
• assess your application and send you an approval or a rejection notification letter within 100 business days of receiving a complete application package

Please note that the submission of an application creates no obligation on the part of AAFC to provide funding for the proposed project.

7.0 Contact us

For more information on the AgriInnovate Program, please contact us by:

E-mail: aafc.cap-aip.pca-pai.aac@canada.ca
Telephone: 1-877-246-4682
TDD/TTY: 613-773-2600

Mail:
Agriculture and Agri-Food Canada
AgriInnovate Program
Tower 7, Floor 8, Room 243
1341 Baseline Road
Ottawa, ON K1A 0C5

Alternative formats

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AgriInnovate Program – Applicant guide (PDF version, 1,065 Kb)