Amended and Restated—Technology Demonstration Program (TDP)—Terms and Conditions
(Effective June 1, 2016)
The purpose of this document is to set forth the terms and conditions for the administration of contributions under the Technology Demonstration Program (TDP) administered by Innovation, Science and Economic Development Canada. The TDP may also be used to fund a national aerospace research and technology network (the Network).
- Sections 4(1)(a), 5(c), 5(d), 6(c) and 14(1)(c) of the Department of Industry Act, S.C. 1995, c. 1.
- Review of Aerospace and Space Program and Policies Cabinet approval on May 28, 2013;
- Budget 2013.
3. Program Objectives
- Statement of the objectives of TDP:
- The large scale technology demonstration projects supported by the program would be expected to ensure a concentration of technology development in priority areas with significant potential for broad based and long-term economic benefits.
- Projects funded through this program would be expected to be the basis for the next-generation of manufacturing, technical capabilities and services in Canada, and generate material economic benefits for Canada in the longer term.
- Linkages to departmental and government objectives:
- TDP will foster the growth of a competitive, knowledge-based Canadian economy. TDP supports Innovation, Science and Economic Development Canada's strategic outcomes: Advancements in science and technology, knowledge, and innovation to strengthen the Canadian economy. Contributions made under these Terms and Conditions will support the Canadian aerospace, defence, space and security ("A&D") industries through support to research and development ("R&D").
- TDP will advance and support government initiatives by contributing strategically to research and development in the A&D industries in order to encourage and further leverage private sector investment, and so maintain and grow the technology base and technological capabilities of Canadian A&D industries.
- As required by Treasury Board Policy, the TDP will provide performance measures such as R&D investment leveraged and the contribution to the achievement of broader technological, economic, environmental and social benefits to Canada.
4.1 Eligible Recipients
Funding under the TDP is generally given to collaborative groups of Eligible Recipients. Eligible Recipients for funding under TDP are corporations incorporated pursuant to the laws of Canada that carry on business in Canada and propose to conduct industrial research and technology demonstration activities with A&D applications as well as Canadian universities or colleges and Canadian research institutes.
Eligible Recipients are categorized as Lead Recipients and Partner Recipients.
A Lead Recipient is normally an Original Equipment Manufacturer (OEM) or a Tier 1 supplier and will be responsible to submit a project application and manage the project. The Partner Recipients will work with the Lead Recipient to complete the project. At a minimum, the Partner Recipients must include one small or medium-sized Canadian corporation and one Academic Institution (accredited Canadian universities, colleges or affiliated research institutes).
For the Network only: The only Eligible Recipient for the Network contribution will be a not-for-profit organization incorporated in Canada which would further distribute funds to the research partnerships consisting of industry, academic and research institutions for the purpose of co-funding collaborative research and technology development projects.
The Network will issue periodic calls for project proposals, receive and evaluate the proposals, and approve the further distribution of funds to eligible ultimate recipients. The eligible ultimate recipients will be Canadian industry, academic and research institutions participating in collaborative research and technology development (R&TD) projects. To be considered collaborative, there must be at least four project partners of which two are companies and two are academic institutions and/or research institutions.
4.2 Eligible Activities
Eligible Activities are industrial research and technology demonstration in A&D carried out by the Eligible Recipients. The combination of these Eligible Activities constitutes an Eligible Project.
Industrial research means the efforts and activities aimed at the discovery of new knowledge, typically related to Technology Readiness Level one through three, with the objective that such knowledge may be useful in developing new products, processes or services or in bringing about an improvement to existing products, processes or services; and,
Large-scale technology demonstration means the efforts and activities aimed at advancing new technology from the laboratory to test and validate it in increasingly realistic settings, typically related to Technology Readiness Levels four through six with the objective that a successfully demonstrated technology may be further developed into product specific applications, and then tested and certified in an operational environment. In the context of TDP, the large-scale technology demonstration is conducted through collaborative efforts with several partners involving firms, universities, colleges and/or research institutions.
For the Network only: Eligible Activities will be activities that promote collaboration among R&D players in the Canadian aerospace community including researchers from industry, national and regional research institutes, and universities, and will include:
- Organization of networking events, conferences, workshops, etc. in support of collaborative research and technology development activities.
- Providing financial support to collaborative R&TD projects at the low-mid TRLs (TRL 1-6).
- Facilitating participation of Canadian aerospace researchers in international collaborative research projects.
- Facilitating participation in collaborative research and technology development projects.
The Network will be solely responsible for assessing, approving and managing the projects it will support.
4.3 Eligible Costs
Eligible Costs will be those costs that are incurred by the Eligible Recipients in respect of Eligible Activities and which, in the opinion of the Minister, are reasonable and necessary to carry out the Eligible Activities to which they relate. Eligible Costs will be limited to the Eligible Recipients' non-recurring costs and may include labour, material, overhead, specialized equipment and other costs, which are attributable to the Eligible Activities.
Generally, Eligible Costs must be incurred in Canada. However, limited funding from the program may support R&D outside of Canada when necessary for the project's success and/or when the R&D cannot otherwise be undertaken in Canada.
The Minister will only reimburse the Eligible Recipients for Eligible Costs that, in the Minister's opinion, are reasonable and relate directly to the Eligible Activities. Capital costs associated with land and buildings are not Eligible Costs. However, the Eligible Recipients may request support for R&D infrastructure, such as shared facilities (e.g. specialized laboratory with advanced research equipment or testing facility).
TDP may support retroactive reimbursement of Eligible Costs incurred prior to the signing of the Contribution Agreement. In such cases, the Minister will not pay for any Eligible Costs incurred by the Eligible Recipients prior to a date established by the Minister and communicated to the Eligible Recipients. Costs supported on a retroactive basis will not exceed 20 percent of the total Eligible Costs of the project. The Minister shall not reimburse an Eligible Recipient for Eligible Costs incurred unless TDP support for the Eligible Recipients' proposal is approved.
For the Network only: Eligible Costs will include expenditures directly related to the operation and activities of the Network such as the costs related to the organization of networking events, the participation in collaborative research and technology development activities, conferences and workshops in support of collaborative R&D activities and running regional offices across Canada. The Eligible Costs for the operation of the Network will include salaries, office equipment, professional services, overhead, travel, and other operational costs as appropriate. The Eligible Costs of the Network for projects that it will support will be the amount of the contribution it makes to those projects.
5. Type and Amounts of Contributions
Contributions will be non-repayable. The contribution amount is the amount of assistance that, in the opinion of the Minister, is required by the Eligible Recipients to ensure that Eligible Activities of the project are completed successfully and are deemed to be justified in light of the anticipated benefits to Canada.
The Minister may enter into contributions up to a maximum amount of up to $50 million. The Minister will seek Treasury Board and Cabinet approvals prior to authorizing contributions per project or initiative in excess of $50 million. This authority expires June 30, 2018.
Under TDP, the contribution to any Eligible Project will not exceed 50 percent of total Eligible Costs. The TDP contribution provided to each of the Eligible Recipients shall not exceed 50 percent of their respective Eligible Costs except for Eligible Recipients that are Academic Institutions where the contribution provided may cover 100 percent of their Eligible Costs.
For the Network only: The contribution to the Network will be used to fund collaborative R&TD projects and for the Network's operational expenses. The contribution to the Network will not exceed the Eligible Costs of the Network. The participation of the Network in projects will be limited to 50 percent of the total Eligible Costs of the projects. The Minister will seek Treasury Board approval prior to authorizing the contribution to the Network.
6. Stacking Provisions and Other Government Assistance
The Eligible Recipients will be required to inform the Minister of any other government (federal, provincial, territorial, municipal) financial assistance it has received or requested toward the Eligible Activities prior to a recommendation being made to the Minister to approve a contribution under TDP. Furthermore, Contribution Agreements will impose upon the Eligible Recipients a continuing disclosure obligation to advise the Minister if they receive further government assistance in respect of the Eligible Costs supported by the contribution.
The level of assistance from all government sources (federal, provincial, territorial and municipal) to an Eligible Project shall not normally exceed 75 percent of Eligible Costs.
The level of assistance from all government sources (federal, provincial, territorial and municipal) to any one Eligible Recipient shall not normally exceed 75 percent of Eligible Costs except for Eligible Recipients that are Academic Institutions, for whom the maximum assistance would be 100 percent.
Contribution Agreements will provide for the right of the Minister to either reduce the amount of the contribution in an amount equivalent to any amount over the stacking limit, or require an Eligible Recipient to repay the excess amount, which amount would constitute a debt due to the Crown and would be recovered as such.
For the Network only: The level of assistance from all government sources will not exceed the total Eligible Costs of the Network.
In accordance with Treasury Board Policy on Transfer Payments, contributions will be non-repayable. The Directive on Transfer Payments permits non-repayable contributions if: 'the benefits from the contribution accrue broadly rather than to the Recipient' or 'the contribution is made with the primary aim of furthering basic research and development, including a payment made through a granting council or other government entity whose mandate is to promote research and development'.
8. Supporting Documentation Required from Applicants
An Applicant refers herein to the collaborative group that would become the Eligible Recipients should the proposal be approved.
The Applicant will be required to submit sufficient information for the Minister to assess the Applicant and the project proposal against the eligibility and assessment criteria. This would include at a minimum:
8.1 Organizational Information
- A detailed description of the Applicant as the Minister deems necessary (e.g. ownership, management, business experience, past and forecasted financial statements for the years covered by the project, technical team’s experience and expertise, etc.);
- A detailed demonstration of how the project meets eligibility criteria listed in Section 4 of these Terms and Conditions;
- Representation that the Applicant is in good standing with regard to all federal, provincial, territorial and municipal laws and regulations;
- Corporate documents as the Minister deems necessary (e.g. articles of incorporation, corporate by-laws and related instruments);
- Representation that any person including any consultant or in-house lobbyist who lobbies on its behalf to obtain funding under TDP and who is required to be registered pursuant to the Lobbying Act is registered pursuant to that Act;
- Representation that the Applicant has not nor has any person on its behalf engaged any person (other than an employee) for the purposes of obtaining TDP funding and paid, or agreed to pay, that person a commission, contingency or success fee or any other consideration (whether monetary or otherwise) that is dependant upon the Applicant receiving TDP funding;
- Representation that any former public servant, that derives benefit from the Contribution Agreement, will be in compliance with the Values and Ethics Code for Public Sector;
- Representation that any former public office holder, that derives a direct benefit from the Contribution Agreement, will be in compliance with the Conflict of Interest Act and Post-Employment Code for Public Office Holders; and,
- Representation that no Member of the House of Commons or Senate will benefit from the contribution.
8.2 Project Information
- Project proposal, workplan, and budget addressing the overall context/objectives and goals of the project, as well as major activity areas and key project performance milestones;
- The forecasted total cost (Eligible and Ineligible Costs) of the project, and details of financing;
- The forecasted public policy benefits, including the increase in technological capacity, the planned cooperative agreements with public and private sector organizations;
- The amount of any federal, provincial, territorial or municipal assistance or tax credit, received or likely to be received for the project;
- The names of those officers responsible for the project, with details on the qualifications of the key individuals carrying out the proposed work;
- Details on how the project and the Applicant will meet the assessment criteria detailed in Section 9 of these Terms and Conditions; and
- Information on all other funding applications made by the Applicant, including the organizations from which assistance was requested and the amount requested, as well as the outcome of the applications.
For the Network only: The Corporate Plan presented by the Network will address the above documentation requirements, as appropriate.
9. The Assessment Criteria
Applications for contributions under TDP will be assessed for their suitability for TDP funding in the context of their relevance to the objectives of TDP. TDP will establish reasonable but high standards for assessing project proposals. Project proposals will be assessed against the criteria below. The criteria are expected to generate proposals with significant leveraging, collaboration and potential for socio-economic benefits. TDP is a contribution program. The Minister may exercise discretion on whether to fund projects.
For the Network only: In assessing the project proposals requesting its support, the Network will consider similar assessment criteria, as appropriate.
9.1 Assessment Criteria
Economic Benefits to Canada
The degree to which the Applicant demonstrates that the project is expected to benefit all parties involved in the project, be the basis for the next generation of manufacturing and/or services in Canada, and generate material economic benefits for Canada in the longer term.
Broader Benefits to Canada
The degree to which the Applicant demonstrates that the project is expected to generate social, environmental, health, security or other benefits to Canada.
The degree to which the Applicant consists of a significant group of corporate and academic partners working collaboratively to achieve mutually beneficial outcomes.
The degree to which the Applicant demonstrates that the project is technologically feasible and that it can reasonably be expected to result in new technological capabilities that are essential to achieving the proposed benefits.
Management and Technological Capability
The Applicant demonstrates the required managerial and technological capability and track record to successfully undertake the project.
The Applicant demonstrates the financial capability to complete the project and the degree to which funding by the Technology Demonstration Program will leverage incremental private sector investment in R&D.
The Applicant demonstrates a commitment to further develop the technology for potential commercialization and to sustain any infrastructure after project completion.
10. Contribution Agreement
Following project approval, a Contribution Agreement will be prepared for signature by the Lead Recipient, the Partner Recipients and the Crown which will identify the conditions of the contribution, the obligations of all parties and the conditions under which payments will be made. Contribution agreement provisions will address the requirements of the Treasury Board Policy on Transfer Payments and the Terms and Conditions of TDP.
TDP will be administered in accordance with Canada's international trade agreements. TDP will only support Industrial Research and Technology Demonstration projects, and the granting of contributions will not be contingent (a), either in law or in fact, upon actual or anticipated export performance or (b) upon the use of domestic over imported goods. However, companies that export will not be precluded from receiving funding for that reason alone.
Each Eligible Recipient shall, as required by the Minister, considering the assessed risk and size of the project and each Eligible Recipient’s role in the project, submit annual financial statements (audited if produced) and annual reports on project goals, milestones, accomplishments and benefits to the Minister for the life of the project.
This information will enable the Minister to assess the progress of the project, including but not limited to the following: achievement of project objectives, performance milestones and expenditures etc.
Upon completion of the project, the Eligible Recipients will be required to submit a final report on the overall project goal and results.
The Eligible Recipients must provide post-project reporting on an annual basis for the subsequent 5 years to demonstrate longer-term benefits realized since the completion of the project.
This information will enable the Minister to evaluate the effectiveness of the contribution.
For the Network only: The required information will be provided in an annual Corporate Plan and an annual Report.
13. Method of payment to the recipient
Payments to the Eligible Recipients will be made on the basis of documented claims for Eligible Costs incurred which, in the opinion of the Minister, are reasonable. Claims are to be submitted by the Eligible Recipients either individually or combined and presented by the Lead Recipient. Each claim is to be accompanied by a brief report of the work completed and details of all costs being claimed, and shall be substantiated by such documents as are satisfactory to the Minister. Claims shall be certified by an officer of each of the Eligible Recipients or by such other person that is satisfactory to the Minister.
At the Minister’s expense, a request could be made that any claim for payment be certified by the Eligible Recipients’ external auditors or by auditors of the Minister’s choice. The Minister may request at any time that the Eligible Recipients provide satisfactory evidence to demonstrate that all Eligible Costs claimed have been paid.
For the Network only: Payments will be made in the form of advance payments according to an assessment of the risk level, and the Network’s forecast annual cash flow requirements to be provided to the Minister by the Network as part of its Corporate Plan. For each fiscal year, the Network will provide evidence satisfactory to the Minister of all eligible expenditures that have been incurred and paid.
14. Official Languages
Communications with the public and delivery of services will be in both official languages, in accordance with the Official Languages Act. All the documents developed by the Program will be published in both official languages. The Program will also contribute to Section 41 of the OLA as it will allow official language minority communities to participate fully to the program when applicable.
15. Intellectual Property
The Crown will not acquire rights to any intellectual property (IP) created through projects funded under these Terms and Conditions, nor will the Crown acquire new rights in Background Intellectual Property, by virtue solely of having provided the Contribution. Neither will the Crown relinquish rights attributed to it in any other way including under the Public Servants Inventions Act.
The Eligible Recipients must own the Background Intellectual Property or hold sufficient Background Intellectual Property Rights to permit the Project to be carried out and the Project Intellectual Property to be exploited.
The Eligible Recipients shall take appropriate steps to protect the Project Intellectual Property and shall provide information to the Minister in that regard, upon request.
Ownership and exploitation of the Project Intellectual Property to which the Minister has contributed, and the Project Intellectual Property Rights therefor, shall remain in Canada for the duration of the Contribution Agreement and the five (5) years immediately following the expiration of the Contribution Agreement unless otherwise agreed to by the Minister.
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