New Approach — Incentive for the Creation of Public-Private Consortia

Previous Practice

Investments made by a Contractor directly to post secondary education institutions or public research institutions (for example, National Research Council, Defence Research and Development Canada, etc.), may receive a 5X multiplier. There were no extra incentives for the formation of a consortium.

Why Change?

To encourage industry-academia-public research consortia to develop the next-generation technologies in aerospace, defence and related sectors. Multi-party consortia have not been attractive to Contractors due to complexities in developing an effective business arrangement, as well as insufficient IRB incentives in the form of multipliers.

New Practice

To motivate Contractors to provide cash investments and other value-added contributions (for example, equipment donations, advanced technical training, certifications, etc.) related to participation in public-private consortia. To be eligible, a consortium will require participation of a Contractor with an IRB obligation, one or more Canadian private-sector participants, and one or more post-secondary or public sector research institutions. The combined total investment from foreign sources shall not exceed fifty (50) percent of the consortia value.

An initial value of the contribuion(s) will be established, equalling: the total of the cash investment by the Contractor, plus cash investment from consortia partners (up to an amount matching that of the contractor). Once the initial value is established, a 5X multiplier will then be applied to it.

While it is encouraged that the Consortia grow and include additional participants, IRB credit will not exceed the amount outlined above without additional contributions from the Contractor.

The following consortium contributions will not be eligible for IRB Credit: contributions from post-secondary institutions and public research institutions, and direct contributions from any level of government. Future sales of products developed through the Consortium are not eligible for IRB Credit as part of the Consortium transaction.