Strategic Innovation Fund (SIF): Steel and Aluminum Overview
Support to Canada's Steel and Aluminum Sectors
As announced on June 29, 2018, and in response to additional tariffs imposed by the United States, the Government of Canada will offer up to $250 million in new support through the Strategic Innovation Fund to help bolster the competitiveness of Canadian manufacturers and better integrate the Canadian supply chain of steel and aluminum. Find out more about this announcement here: Canada stands up for our steel and aluminum workers and industry
What is SIF?
The Strategic Innovation Fund (SIF) seeks to support projects and investments put forward by companies of different sizes and from a range of sectors to encourage and accelerate the development of innovative and/or growth-oriented initiatives.
What are the Steel and Aluminum Program Objectives?
- The additional $250 million in new support over two years through the SIF is to help bolster competitiveness of Canadian producers and better integrate the Canadian supply chain of steel and aluminum.
- This is one of the measures that is part of the funding of up $2 billion made available by the Government of Canada to defend and protect the interests of Canadian workers and businesses in the steel and aluminum industry.
- Using the existing SIF program allows the Government a more streamlined approach to processing applications.
- The objective of the Program is to enable steel and aluminum producers to enhance their production capabilities to better meet the product demand from end-users within Canada.
Who is Eligible?
- Canadian incorporated steel and aluminum producers can submit a proposal for targeted assistance for new equipment, production, and process technologies, as well as training and upskilling related to these new technologies and processes.
- Applicants must be steel and aluminum producers with a minimum of 200 employees requesting a contribution of between $10 million and $50 million. Final contribution level will depend on a number of factors including project scope and level of interest in the program.
What are the Project Eligibility Criteria?
- Eligible projects will be similar to Stream 2 of SIF (with the majority of costs involving CapEx).
- Projects must be complete by March 31st, 2020.
- Proposals would be assessed similar to other SIF projects, such as on project innovation, however economic benefits related to job maintenance/growth and capability improvements may be more heavily weighted.
- SIF funds a share of eligible costs up to 50%.
Eligible costs include expenses such as direct labour, overhead (program limits apply), subcontracts and consultants, direct materials and equipment, other direct costs, and buildings.
Ineligible costs include, but are not limited to, expenses such as donations, entertainment expenses, contingency fees, expenses not related to the project.
What is the Application Process?
- Companies that meet these criteria and have already applied, do not need to reapply. However, any company who received a rejection letter could reapply.
- Companies can apply by submitting a Statement of Interest (SOI) through the SIF website.
The program involves four major steps:
- Statement of Interest (SOI);
- Invitation to Full Proposal for selected projects/companies
- Due Diligence (evaluation of market, technical and financial information) and completion of a Term Sheet; and
- Contribution Agreement (including a detailed Statement of Work, repayment obligations and benefits to Canada).
How do SIF Contributions Work?
- SIF funding is project-based where a portion of eligible costs is reimbursed after the submission of claims.
- Potential applicants are encouraged to base the level of funding sought on the needs of their project.
- Costs would be eligible to be reimbursed after the establishment of an eligibility date, generally set as receipt by SIF of a full and complete application.
- Projects will be repayable. The potential terms will be discussed in detail with companies upon invitation to full application.
- Stacking of funding from all government sources shall not exceed 75% of eligible costs.
What are the Statement of Interest Requirements?
- Applicant information (including project contact; location; date of incorporation; line of business; and number of overall and R&D employees over the last three years);
- Project information (including clear overall project and high level activity description outlining objectives, outcomes, timelines, location, and costs);
- Benefits to Canada (including economic (job maintenance/growth and capability improvements), innovation and public benefits);
- Corporate information, including financial information with the last three years’ financial statements. (Note, proforma financial statements providing a two year forecast and project funding details will be required with the full application); and
- Details on the company’s CapEx spending over the last three years.
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