Frequently Asked Questions — Incentive for the Creation of Public-Private Consortia
- What is a Consortium? / What are Consortia?
- Who can be involved?
- How do you calculate the multiplier associated with Consortia?
- Can future sales of products developed through the Consortium be credited for IRB purposes within the same consortium transaction?
- Why has Industry Canada decided to create a new Consortia activity within the IRB Policy?
- Can in-kind donations be used in a Consortium?
- Why is a Consortium limited to 50 percent foreign participation?
- What is a Consortium? / What are Consortia?
http://www.ic.gc.ca/eic/site/042.nsf/eng/00030.html#q1
For the purposes of the IRB policy, a Consortium is a public-private partnership established with the intent of researching and developing new technologies that will be exploitable by Canadian industry. Partnerships will generally be an association of the Contractor with an IRB obligation, Canadian industry, and a Canadian post-secondary or research institution. Consortia may be established to develop technologies in high technology sectors, such as the aerospace and defence sectors.
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- Who can be involved?
To be considered eligible, a Consortium must consist of each of the following:
- the Contractor or its Eligible Party with an IRB obligation;
- a minimum of one publicly or privately owned Canadian company; and,
- a minimum of one post-secondary or research and development institution.
Beyond the definition of Consortia, the IRB Policy does not prescribe any maximum thresholds for consortia investments. Additionally, foreign companies may be involved in a Consortium; however, foreign participation in the Consortium may not exceed 50 percent of the value of the Consortium. Even though there is not a formal requirement to do so, Industry Canada encourages Contractors investing in a Consortium to maximise the number of Canadian Small and Medium-Sized Enterprises involved in the Consortium.
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- How do you calculate the multiplier associated with Consortia?
http://www.ic.gc.ca/eic/site/042.nsf/eng/00030.html#q3
In order to calculate the multiplier for a consortium the first step is to identify which contributions to the consortium are eligible for the multiplier. The value of these contributions is referred to as the "initial value".
The initial value is the sum of the following:
- the value of cash contributions from the Contractor to the Consortium; and,
- the value of cash contributions leveraged by the Contractor's participation in the Consortium up to a maximum value equal to that of the Contractors contribution.
However, the following will not be eligible for IRB Credit:
- contributions from post-secondary institutions and research and development institutions shall not be counted towards the Contractor's obligations; and,
- direct cash contributions from all levels of government into the Consortium.
Once an initial value is established, the Contractor shall receive a five (5x) times multiplier on the initial value. Examples are provided below to illustrate.
Example Contractor donation Leveraged industry donation In-kind donations by the Contractor In-kind donations by industry Post-secondary or not for profit research Multiplied Credit 1 $200 000 $200 000 $0 $0 $200 000 $2 000 000 2 $200 000 $200 000 $100 000 $0 $200 000 $2 100 000 3 $200 000 $100 000 $100 000 $100 000 $200 000 $1 700 000 4 $200 000 $200 000 $0 $0 $100 000 $2 000 000
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- Can future sales of products developed through the Consortium be credited for IRB purposes within the same consortium transaction?
http://www.ic.gc.ca/eic/site/042.nsf/eng/00030.html#q4
No, the future sales of products developed through a Consortium transaction are not eligible for IRB Credit in the same transaction. The only eligible IRB credit that can be generated from a Consortium is from the contributions to the consortium from the consortium partners.
However, should the Contractor decide later to procure goods and services from the Consortium, the purchase will be considered as a separate IRB transaction. The transaction will be treated in the same manner as procurements the Contractor makes in Canada that are unrelated to the consortium. No multiplier will be applied.
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- Why has Industry Canada decided to create a new Consortia activity within the Industrial and Regional Benefits (IRB) Policy?
http://www.ic.gc.ca/eic/site/042.nsf/eng/00030.html#q5
The increased use of private-public consortia is attractive as a means for Canadian industry to participate in leading-edge research and development, while maintaining a reasonable cost structure. Industry Canada recognizes the importance that these Consortia may play in developing next generation technologies and services that are led by industry and supported by Government and academia. It is hoped that this change will significantly incent business-led innovation activities between global multinationals, Canadian industry, academia and/or the public research institutions.
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- Can in-kind donations be used in a Consortium?
http://www.ic.gc.ca/eic/site/042.nsf/eng/00030.html#q6
Yes. Contributions to the Consortium may take the form of in-kind donations. However, in-kind donations will not be eligible for a multiplier. In-kind contributions will be valued based on an assessment to be undertaken by an independent Third Party, solely at the cost of the Contractor.
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- Why is a Consortium limited to 50 percent foreign participation?
http://www.ic.gc.ca/eic/site/042.nsf/eng/00030.html#q7
The purpose of developing a Consortium is to leverage Canadian industry involvement in cutting edge research and the development of next generation technologies. Foreign participation is limited to 50 percent to maximize Canadian industry and post-secondary institution involvement within the consortia, as well as to ensure the Consortia remains a Canadian business entity. The intent of this is to make a long term capability available to be utilized by Canadian industry and research institutions.
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