Stream 2: Regional Innovation Ecosystem guidelines

Scope & Objectives

The Regional Innovation Ecosystem stream aims to create, grow and develop strong and inclusive regional ecosystems that support business growth and innovation, as well as the entrepreneurial environment necessary to foster more innovative regional economies and increase the competitiveness of small- and medium-sized enterprises (SMEs).

Through this Stream, FedDev Ontario seeks to:

• Grow and sustain strategic clusters and consortia to leverage regional strengths and support businesses to scale up and commercialize innovative products, technologies and services.
• Enhance the development and reach of business accelerators and incubators, and other organizations, which support entrepreneurs, start-ups and innovative companies with high-growth potential.
• Support projects led by innovation-oriented organizations to increase and promote business productivity and global competiveness, and investment and talent attraction.

FedDev Ontario will make targeted investments in not-for-profit organizations that provide support to businesses at each stage of development in areas where Canada and southern Ontario has the potential to have a leadership position and opportunities for growth. Investments made through FedDev Ontario's Regional Innovation Ecosystem Stream will further enhance the capacity of ecosystems to support underrepresented groups, including women, Indigenous peoples and young entrepreneurs, promoting their entrepreneurial talent.

Expected Results

FedDev Ontario is results oriented. Projects supported through this Stream, and FedDev Ontario's other programming streams, work towards achieving one or more of the following departmental results:

• Businesses in southern Ontario invest in the development and commercialization of innovative technologies.
• Businesses in southern Ontario are innovative and growing.
• Communities are economically diversified in southern Ontario.

Eligibility

I. Eligible Applicants are not-for-profit organizations that may include:

• A group or an alliance such as an industry association or consortium
• Post-secondary institutions
• Innovation centres
• Business accelerators and incubators
• Angel networks
• Indigenous organizations
• Community Futures Development Corporations (CFDCs)
• Co-operatives
• Municipalities and other municipal-type organizations
• Other not-for-profit organizations, as determined on a case-by-case basis

To be considered eligible, all applicants must be located in southern Ontario.

All eligible applicants must be legal entities capable of entering into legally binding agreements.

To be considered eligible for funding, applicants must demonstrate:

• Evidence of project funding.
• Managerial, technical, operational and financial capacity to achieve the project's stated objectives in a timely manner.
• Market/industry demand (e.g., how the project addresses a significant gap in the market; global opportunity to be seized within Canada; and evidence that southern Ontario is uniquely positioned to capture market share).
• A viable project plan with achievable outcomes, supported by verifiable cost estimates.

Projects that address significant gaps at a sub-regional or community-level may be considered under FedDev Ontario's Stream 3: Community Economic Development and Diversification.

Applicants may also be required to demonstrate how their project will be self-sustaining upon the completion of the project. For project proposals that will result in the creation of a new ongoing program/service, applicants may be required to demonstrate the financial sustainability of the new program/service beyond the project completion date (i.e., sustainable business model and/or a plan for generating revenue in order to grow or maintain service levels).

II. Eligible Activities

FedDev Ontario is targeting investments structured around the following activities:

Growing Clusters and Consortia

Cluster and consortia projects bring together multiple stakeholders, such as businesses, industry associations, Indigenous economic development corporations, post-secondary and research institutions, and all levels of government. These projects will normally have strong industry participation, support the translation of leading-edge innovation into high-growth entrepreneurship, and focus on areas where southern Ontario has an innovation advantage and/or there are global opportunities.

Examples of eligible project activities could include:

• Development of commercially-relevant technology platforms, innovation assets, tools and testbeds.
• Applied research and product development, and support for adoption or integration into markets.
• Technology transfer including validation of the need, training and implementation of a new technology.
• Technological adoption for new industrial applications and/or entry into new markets.
• Encouraging first buyers for new products developed within the cluster or consortia.

Ecosystem Capacity Building

Ecosystem capacity building projects will normally be led by a business accelerator, incubator, angel network, industry association, economic development organization or similar capacity builder, to support firm growth and entrepreneurial activity, strengthen global competitiveness, and/or attract investment and talent to southern Ontario. These projects will normally develop or expand regional capacity to address gaps and target priority growth sectors in areas of comparative advantages at the global, national or regional levels.

Examples of eligible project activities could include:

• Business and market development and/or expansion programs and services.
• Commercialization services, networking and mentoring opportunities.
• Financing programs and support.
• Business innovation support services for women, Indigenous peoples and young entrepreneurs.
• Improving the availability of risk capital to address a need in the region.
• Innovative models to support the first sale of new products and services.
• Training needed to support the adoption or adaptation of innovative technologies, processes and practices.
• Enhancing investment attraction, export readiness and market diversification.
• Facilitating supply chain development.

III. Eligible Costs

Eligible costs for project activities may include:

• Labour
• Expertise
• Non-Capital
• Capital

All costs must be reasonable and directly related to the eligible project activities.

IV. Ineligible and/or Unsupported Costs include:

• Any costs deemed not reasonable and/or not directly related to the eligible project activities.
• Activities in support of regular maintenance and/or ongoing operation costs.
• Costs typically supported by federal/provincial transfer payments.
• Cost incurred prior to the eligibility date as defined in the contribution agreement.
• Costs incurred after the Project completion date listed in the contribution agreement.
• Any cost that is ineligible under the contribution agreement.
• Acquisition of land and buildings.
• Costs that result in direct benefits to a single or small number of private firms, unless specifically associated with an approved activity related to the delivery of service or program under the proposed project.

V. Ineligible Projects

• Projects that have been approved for funding under Canada's Strategic Innovation Fund will normally not be supported under this Stream.

Priorities

Preference will be given to projects which respond to issues and opportunities identified by FedDev Ontario. These may include priority sectors and strategic clusters, or projects that reinforce Ontario’s economic and innovation strengths in areas of comparative advantages at the regional, national or global level.

Projects that support the government’s commitment to inclusive growth (i.e., women, Indigenous peoples and LGBTQ2+ communities) and Official Language Minority Communities may be given priority.

Consideration may also be given to projects based on geographic priorities and need.

Funding

The Regional Innovation Ecosystem stream will normally target investments that range from $500,000 to $10 million. On an exceptional basis, FedDev Ontario may approve funding amounts outside of this range.

Applicants are normally eligible to receive up to 50 percent of eligible and supported costs. On an exceptional basis, FedDev Ontario may consider projects eligible for up to 100 percent of eligible and supported project costs.

For projects involving redistribution of funding to SMEs, the ultimate recipients (SMEs) must provide minimum 50 percent cash contribution. The maximum disbursement of a contribution that provides funding to SMEs as their ultimate recipient is capped at a maximum of $100,000 per SME under a FedDev Ontario project with a not-for-profit organization.

Government stacking up to 100% is allowed for the Regional Innovation Ecosystem Stream.

FedDev Ontario support is not intended to replace or duplicate funding available from other funding sources, including private-sector and/or government programs.

Financial assistance from government programs may have tax implications for an organization. It is recommended that applicants obtain advice from a qualified tax professional.

Disbursement of Funding

If a project receives approval, a contribution agreement will be executed with FedDev Ontario. Funding will be based on the percentage of funding approved for eligible costs incurred.

Progress payments will be made on the basis of documented claims for reasonable eligible costs incurred or on the basis of the achievement of pre-determined performance objectives (for example, project milestone payments) and on the costing formula to be described in the contribution agreement.

To receive funding, recipients must submit claims forms, on templates provided by FedDev Ontario, that summarize eligible costs incurred and paid within a defined period. Generally, the duration of these periods will be no more than once a month and no less than quarterly.

Application Process

Applications are accepted on an ongoing basis with no submission deadlines. FedDev Ontario has a single-phase application process and one Application for Funding that is used across all three streams of innovation programming.

Refer to the Application Guide for instructions on how to complete FedDev Ontario's Application for Funding. Applicants are encouraged to review the Application Guide in conjunction with these programming guidelines.

Applicants are strongly encouraged to contact FedDev Ontario prior to submitting an application. For more information on FedDev Ontario's programming streams, visit the Funding opportunities page or call 1-866-593-5505.

Multiple and concurrent project submissions from the same applicant are discouraged and may not be considered by FedDev Ontario; applicants are encouraged to prioritize project submissions.

FedDev Ontario reserves the right to initiate calls for proposals as deemed necessary to encourage applications in priority areas or sectors, and to adjust the application process accordingly if needed.

Application Review

FedDev Ontario will review applications as they are received.

All applications will be screened initially for completeness. Incomplete applications will not be assessed and will be considered ineligible for funding.

All project activities must be completed by the Project completion date listed in the contribution agreement.

Complete applications are those that include all prescribed documentation containing all information needed for FedDev Ontario to complete the review. Information should be accurate, verifiable, relevant and consistent.

Complete applications will undergo a due diligence process where they are assessed against a number of factors. Assessment criteria include, but are not limited to:

• Project's contribution to achieving the objectives and expected outcomes of the Regional Innovation Ecosystem stream and government priorities.
• Demonstrated capacity of the applicant to successfully implement the project and achieve the stated objectives. Factors to be assessed include managerial capacity, technical capacity, operational capacity and financial capacity.
• Assessment of need for the project, and how the project fills a significant gap in the ecosystem in priority sectors or clusters.
• Risks (financial, technical) and mitigation strategies.
• Economic benefits of the project.
• Innovation benefits of the project.
• Demonstrated need for FedDev Ontario's investment and its incremental impact on project in terms of scope, location and timing.
• Support for inclusive growth priorities.

Reporting Requirements & Visibility Requirements

Recipients must submit to FedDev Ontario periodic reports and annual financial statements. Project reports will provide details on project results and completion of deliverables, including achievement of performance indicators and project benefits identified in the contribution agreement.

Recipients must agree that its name, the amount of the Contribution and a description of the general nature of the activities supported under its contribution agreement with FedDev Ontario be made publicly available for reasons of transparency and proactive disclosure. Recipients must also agree to co-develop a plan intended to maximize visibility of the support received as a result of the project, including but not limited to support provided to ultimate recipients (i.e., SMEs), if applicable.

Other

FedDev Ontario reserves the right to modify these guidelines at any time without notice and may waive certain requirements on an exceptional basis.

Contact Us

Applicants are strongly encouraged to contact FedDev Ontario to discuss their application with a program officer, who will also explore other government programs that may be applicable to the project. For more information on FedDev Ontario's programming streams, visit the Funding opportunities page, or call 1-866-593-5505.