Agricultural Innovation Program - Program Guide

Description

The Agricultural Innovation Program (AIP), a $50 million program ending March 31, 2013, is designed to accelerate the pace of innovation and facilitate the commercialization and adoption of innovative products, technologies, processes and services. It will improve the productivity and competitiveness of the Canadian agriculture, agri-food and agri-based products sector and help capture opportunities in domestic and global markets.

The program will support projects that:

• accelerate the creation, availability, application and transfer of knowledge and technologies to the sector; or
• increase the successful commercialization or adoption of agriculture, agri-food and agri-based innovations.

AIP will address these priorities by providing support under two streams:

Maximum Funding and/or Support

The maximum funding and/or support under both streams to any eligible recipient will not exceed $10 million over the life of AIP. Consult each program stream for further details.

Retroactive Costs

At the discretion of the Minister, project costs incurred prior to the date of the signature of an agreement but after the commencement of the program may be considered eligible for reimbursement.

Note: Even if an applicant is advised that their project is approved and the applicant starts incurring costs, no costs are eligible for reimbursement unless an agreement is ultimately signed between the applicant and Agriculture and Agri-Food Canada (AAFC). Any costs incurred prior to the signing of an agreement would be incurred solely at the applicant's risk without obligation of payment by AAFC.

Program Duration

The program expires March 31, 2013. All eligible costs must be incurred by that date.

Submission of Applications

AIP uses an open system where applications can be submitted for review at any point until the available program budget has been fully allocated. Applications are considered as soon as they are received and found to be complete.

Applicants will receive written notification from program officials acknowledging receipt of the application. Applications will be reviewed by AAFC and, if required to properly evaluate the proposal, by external experts. Applications will be reviewed to ensure that program objectives and assessment criteria are adequately addressed. Decisions reached during the review process will be final.

Following the AAFC review process, applicants will receive a letter with AAFC's final decision. Successful applicants will be required to enter into a Contribution Agreement (CA) and/or a Collaborative Research and Development Agreement (CRADA).

Description

The Knowledge Creation and Transfer stream aims to accelerate the pre-commercialization of new agri-practices, products and processes by supporting activities that:

• help the development of strategic business planning related to science and research to foster innovation and leadership;
• increase the access to and support collaboration and planning by stakeholders that are engaged in developing or expanding agricultural value chains;
• increase the access of agri-based organizations to support the implementation of applied science and technology development projects.

The Knowledge Creation and Transfer stream facilitates access to university, government and other scientific resources that may be required by agri-based organizations to address specific issues or opportunities.

AAFC's network of research facilities across Canada will support local collaborations and accelerate the uptake of technologies at the farm level.

Two components are available under the Knowledge Creation and Transfer stream:

Eligible Applicants

Eligible applicants include for-profit and not-for-profit organizations. All applicants must be legal entities and capable of entering into legally binding agreements. Preference may be given to projects located in Canada.

It should be noted that federal, provincial, territorial government departments or agencies, and universities and colleges are not eligible applicants.

Maximum Funding and/or Support

Applicants must determine and communicate clearly their requested funding and/or support under this program.

Not-for-profit organizations may target up to 75% of eligible project costs and for-profit organizations may target up to 50% of eligible project costs. The percentage of assistance requested by the applicant must be the same for research work performed under a CA and under a CRADA. The maximum funding and/or support to any eligible project will not exceed $4 million, and the maximum funding and/or support per recipient will not exceed $10 million over the life of AIP.

Total federal, provincial/territorial and municipal government funding and/or support, should not exceed 75% of total eligible project costs. The remaining eligible costs must be met through a cash contribution from non-government organizations. Applicants cannot use in-kind contributions to cover part of the eligible costs of a project. Projects with a higher ratio of non-government funds may be given preference.

The level of federal assistance requested under this program will be assessed against the level of risk and the impact of the project on the primary sector. See assessment criteria.

Eligible Costs

Eligible costs are costs that are incurred by the recipient and which, in the opinion of the Minister, are reasonable, incremental, and required to carry out the eligible activities to which they relate. Eligible costs include:

• goods and services and all related shipping and transportation costs;
• labour including wages/salaries and benefits, specific per diem fees, and contract/consulting costs;
• rental or lease of facilities, equipment or machinery;
• the purchase of capital items, such as equipment and furnishings;
• materials/consumables needed to undertake the project;
• licenses and permits;
• costs of work related to compliance with the Canadian Environmental Assessment Act (CEAA);
• reasonable travel and hospitality costs based on Treasury Board guidelines as a comparative standard;
• production of materials required to fulfill obligations under the agreement, including translation;
• overhead costs when it can be clearly demonstrated they constitute incremental costs that cannot be absorbed by the recipient (to be considered on a case-by-case basis); and
• other reasonable costs directly related to the project, at the discretion of the Minister.

Ineligible Costs

Ineligible costs include:

• the value of in-kind contributions;
• building purchase, renovation, site improvement, leasehold improvements and construction costs;
• capital items not specifically required for the execution of the project;
• refundable portion of the Goods and Services Tax/Harmonized Sales Tax, value-added taxes, or other items for which a refund or rebate is received;
• travel and hospitality costs deemed excessive compared to Treasury Board guidelines or gifts associated with the hosting of events;
• costs related to Canadian federal government departments and agencies such as fees paid to the Plant Breeders Rights Office and Canadian Intellectual Property Office; and
• any other expenditure not specifically listed as eligible or otherwise approved to be eligible.

Reporting Requirements

Successful applicants will provide financial and performance reporting on their activities in the form of periodic updates and status reports as required under the terms and conditions of their agreement with AAFC. These reports must include non-confidential activity summaries written for a general audience using plain language that may be used for communication purposes.

Intellectual Property

In order to facilitate future use and potential commercialization of the new intellectual property, of any intellectual property subsequently developed using that intellectual property, or of the new intellectual property as bundled with necessary background intellectual property, applicants must agree that they will avoid joint or divided ownership of new intellectual property or of the bundled intellectual property rights that arise from the funded or otherwise supported project. If this is not feasible, then applicants will be required to provide a workable alternative that assures accountability and responsibility for the effective utilization of new intellectual property.

AAFC may include a provision in the agreement that a non-exclusive and royalty-free license is granted to Canada to enable it to use the intellectual property for research and development, and/or for publication purposes.

Further general information can be found in the Notes to Applicants.

Application Preparation

Applicants are encouraged to submit their applications as soon as possible to ensure maximum time to carry out their activities.

Applications can be submitted for review at any point until the program has fully allocated its available budget. Applications are considered as soon as they are received and found to be complete.

This program expires on March 31, 2013. All project activities must be completed by that date, including submitting claims with invoices, auditing and reporting. Activities performed after March 31, 2013 will not be deemed eligible and related costs will therefore not be refunded. It is strongly suggested that research activities be completed by January 31, 2013.

The application must be developed in collaboration with all research participants and be signed by a representative of the organization at the President / Chief Executive Officer or equivalent level. The proposal must be described using the structure outlined in the Written Proposal template.

Applicants should complete and submit the application and required attachments including:

• a copy of the Project Application Form including a signed and dated Declaration;
• a copy of a signed and dated Consent to Disclose Personal and/or Business Information Form for all participating organizations (other than the applicant);
• a completed Written Proposal template;
• letters of support (not mandatory, but recommended);
• a completed Knowledge Creation and Transfer Work Plan template;
• a completed Budget template;
• a copy of the company's Certificate or Articles of Incorporation;
• an organizational chart indicating names and titles of the management team;
• copies of the organization's annual financial statements (audited, review engagement or notice to reader) for the past two years or since the date of start-up.

Note: The application and required attachments may be downloaded from the Alternate Formats section of the AIP web site or obtained by calling toll-free 1-877-246-4682 or emailing AIP@agr.gc.ca.

Applicants should send an original, signed copy of the Application and attachments, along with an electronic copy (CD ROM), to:

Agriculture & Agri-Food Canada
Agricultural Innovation Program - Stream A
Tower 7, Floor 8, Room 246
1341 Baseline Road
Ottawa, ON, K1A 0C5

Alternatively, the electronic version of the application and attachments may be sent by e-mail with the signed original and attachments sent by mail or courier to the above noted address.

Assessment Criteria

To ensure that the AIP objectives are met under the Knowledge Creation and Transfer Stream (Stream A), proposals will be assessed against the following four groups of selection criteria. In addition, selected projects will also be monitored on an ongoing basis throughout the project lifecycle against these same criteria.

Description

The Commercialization stream aims to facilitate the commercialization and adoption of agri-based innovations in Canada to help increase the competitiveness and sustainability of the agricultural, agri-food or agri-based sector. Repayable funding will be provided for activities such as constructing and renovating facilities, purchasing and installing equipment, and marketing opportunities.

Eligible Applicants

Eligible applicants include for-profit corporations, co-operatives and Aboriginal groups involved in the commercialization or adoption of innovative agricultural, agri-food or agri-based products, processes, technologies, or services.

Applicants must be legal entities and capable of entering into legally binding agreements.

Eligible Projects

Projects seeking funding for the following activities are eligible under the Commercialization stream:

• commercializing or adopting innovative agricultural, agri-food or agri-based products, technologies, processes and services;
• establishing, expanding, or modernizing a facility to commercialize or adopt an innovative agricultural, agri-food or agri-based product, technology, process or service for domestic and/or international markets;
• implementing marketing opportunities related to the commercialization or adoption of an innovative product, technology, process or service.

Applicants must demonstrate that the innovative product, technology, process or service being commercialized or adopted is proven and ready for production or use, and that the project can be completed by March 31, 2013.

In addition, applicants must demonstrate that their projects contribute to one or more of the following benefits to Canada:

• increased revenues in the agricultural sector
• increased demand for primary agriculture and/or agri-based inputs; or
• increased employment in the sector.

Priority will be given to projects that demonstrate that they are one or more of the following:

• transformative* for the sector;
• focused on creating or expanding export markets;
• commercializing or adopting products, technologies, processes or services that have been recently proven i.e. within the last five years.

*Transformative projects are defined as projects that are leading edge with the potential to introduce a significant change or adaptation to the sector, for example:

• a new form of input transformation (e.g., in the way that fractionation or freeze drying has resulted in new applications for ingredients);
• significant improvement in product attributes (e.g., cold pasteurization, Individually Quick Frozen, or irradiation) or product packaging (e.g., aseptic and atmospheric packaging);
• new category development (e.g., bioactives).

Maximum Funding

The maximum funding to any eligible recipient will not exceed $10 million over the life of AIP.

Interest-free, fully repayable funding of up to 50% of eligible project costs to a maximum of $10 million per project will be considered under the Commercialization stream.

Total government funding (federal, provincial/territorial and municipal) for eligible costs under this stream cannot exceed 75% of those costs.

Eligible Costs

Eligible costs are those incurred by the recipient and which, in the opinion of the Minister, are reasonable, incremental, and required to carry out the eligible activities to which they relate. Eligible costs include:

• goods and services and all related shipping and transportation costs;
• labour including wages/salaries and benefits, specific per diem fees, and contract/consulting costs;
• rental, lease of facilities, equipment or machinery;
• materials/consumables needed to undertake the project;
• licenses and permits;
• costs of work related to compliance with the CEAA;
• production of materials required to fulfill obligations under the agreement, including translation and production of materials in the second official language;
• building purchase, renovation, site improvement, leasehold improvements and construction costs
• machinery, equipment, and software purchase and installation costs;
• start-up costs, including interest capitalized during construction, insurance during construction, fees and charges for operation of equipment for adjustment and calibration, and training;
• marketing costs, hiring of marketing expertise and other related activities; and
• other reasonable costs directly related to the project, at the discretion of the Minister.

Note: Even if an applicant is advised that their project is approved and the applicant starts incurring costs, no costs are eligible for reimbursement unless a CA is ultimately signed between the applicant and AAFC. Any costs incurred prior to the signing of a CA would be incurred solely at the applicant's risk without obligation of payment by AAFC.

Ineligible Costs

Notwithstanding that the following costs may have been or may be reasonably and properly incurred by the recipient during the performance of project activities, they are considered ineligible costs under the Commercialization stream. These ineligible costs include:

• capital items not specifically required for the execution of the project;
• refundable portion of the Goods and Services Tax/Harmonized Sales Tax, value-added taxes, or other items for which a refund or rebate is received;
• any portion or any cost or assistance that, in the Minister's opinion, exceeds the fair market value for that cost item or assistance;
• any cost, such as amortization that would not result in a direct, out-of-pocket expense for the recipient;
• land, goodwill, and existing equipment or buildings owned by a related party;
• research and development costs; and
• any other expenditure not specifically listed as eligible or otherwise approved to be eligible.

Payments to Recipients

Payments will be made based on claims submitted to AAFC for eligible costs incurred by the recipient in accordance with the terms of the CA. Each claim must be supported by details of the costs being claimed and certified by an authorized official of the recipient.

Reporting Requirements

Successful applicants will be required to provide periodic financial, work plan progress and performance reports as required under the terms and conditions of the CA with AAFC. Annual performance reports will be required during the project work phase and for a minimum of three years after project completion, and the applicant's financial statements will be required annually until such time as the repayment period has ended.

Repayment

Contribution funding under the Commercialization stream is fully repayable. The recipient shall repay the contribution funding via equal payment instalments to the Crown over a period of up to ten years following project completion. This period may be shorter depending on factors such as, but not limited to, the useful life of the asset purchased using the funding from this program.

Repayment will normally begin one year following the completion of the project. Repayments must be completed within 10 years of the program end date.

No interest is payable with the exception of interest charged on late payments and debts owed to the Crown, should such situations arise.

Transferability

In cases where buildings, machinery and equipment are constructed or purchased as part of the project, a recipient must obtain written approval from AAFC for any transfer of ownership of all or a part of a building, machinery or equipment purchased with program funds until all obligations in the CA, including repayment, have been met. To enable AAFC to determine if a proposed transfer can be approved, based on AIP objectives and funding criteria, the recipient must provide AAFC with advance written notice of any proposed transfer of ownership of all or part of a building, machinery or equipment purchased with program funds, the name and address of the transferee, and any other information deemed necessary by AAFC at minimum 30 days prior to the proposed transfer.

Retention of Ownership

In cases where buildings, machinery and equipment are constructed or purchased as part of the project, the buildings, machinery and equipment must be retained by the recipient for the duration of the project, including the repayment period, unless otherwise agreed to in writing by AAFC. In the absence of written approval, full repayment of the AIP contribution would come into effect immediately upon disposition of AIP funded buildings, machinery and equipment.

Further general information can be found in the Notes to Applicants.