CFI John R Evans Leaders Fund Budget Development

Budget Development CFI contribution: up to 40% of total project costs Alberta Ministry of Economic Development and Trade: up to 40% of total project costs Remainder of matching funds is the researcher’s responsibility Vendor discounts Matching cash contributions from eligible sources Recent equipment purchases through other sources of funds used as a match Source of funds must be eligible to match CFI Purchase must have been made < 6 months before JELF application is submitted

Budget Development The CFI considers the Fair Market Value (eligible cost) of an item to be the price of the item after normal and/or educational discounts Normal discount: A discount a supplier would normally apply to anybody Educational discount: A discount offered to an institution due to its educational status. Eligible in-kind contribution: A non-monetary resource offered as a contribution toward a CFI-funded project. The eligible in-kind contribution is equal to the fair market value of the item less the net selling price (if any). Must be over and above Normal and Educational Discounts * Ref: Section 6.5 (page 45) in CFI’s Policy and Procedure Guide, 2013

Budget Development Normal/educational discounts do not count as in-kind contributions to CFI projects Examples of discounts that wouldn’t qualify as in-kind contributions: Discounts due to the U of A’s status as a university or due to U of A’s volume of transactions with the vendor Discounts that are normally offered by the vendor due to proximity of the U of A to the vendor Time commitments by a University of Alberta employee towards a CFI project

Budget Development Examples of discounts that might be eligible (subject to validation) as in-kind contributions to CFI projects: Special discounts that are offered over and above any educational discounts Donation of equipment by an industrial partner/vendor Donation of professional services/training Extended warranties that are offered by a vendor for free All must be identified as specific to CFI

Budget Development Quotes must be provided to Contracts Specialist For expensive equipment items, approaching multiple vendors to see who gives the best deal is a good practice, but not required Vendors are not required to offer normal or educational discounts. Vendor should state value of normal or educational discount on quote; OR Vendor should state on quote that they do not offer normal or educational discounts May ask for an in-kind contribution from suppliers but should not ask for a specific amount or percentage* *https://www.innovation.ca/sites/default/files/vpupdate/cfi-vp-update-july-2016.pdf *https://www.innovation.ca/sites/default/files/Funds/documents/Competitivie%20bid%20process%20and%2 0examples_updated%20April%207_2014_EN%20-%20CSV2.pdf Pre-purchases made <6 months prior to the CFI application can be transferred into the project

Examples From Appropriate Quotes Distinguishes educational and CFI in-kind discounts; indicates that the company does not offer an educational discount Distinguishes educational and CFI in-kind discounts Vendor makes statement that they do not offer educational discounts

Examples From Inappropriate Quotes “In lieu” implies that CFI discount is being offered instead of educational discount? Is this a discount that is based on the location of the U of A?? CFI eligible in-kind discounts must be specific to the CFI.

Here is what happens if the cash and in-kind amounts are properly accounted for Project Costs Cash In-Kind Total Project Cost (TPC) Equipment Item 1 $96,000 $24,000 $120,000 Project Revenue Amount % of Total Project Cost CFI (max 40% of TPC) $48,000 40% Province (EDT) (max 40% of TPC) Vendor In-Kind Discounts $24,000 TOTAL $120,000 100%

But what might happen if the vendor does not specify in-kind amount at application? Stage Project Costs Cash In-Kind Total Project Cost (TPC) Equipment Item 1 $96,000 Not specified by vendor Project Revenue Amount % of Total Project Cost CFI (max 40% of TPC) $38,400 40% Province (EDT) (max 40% of TPC) Vendor In-Kind Discounts - Other Sources $19,200 TOTAL $96,000 100%

But what might happen if the vendor does not specify in-kind amount at application? Project Costs Cash In-Kind Total Project Cost (TPC) Equipment Item 1 $96,000 $24,000 $120,000 At Purchasing Stage Project Revenue Amount % of Total Project Cost CFI (max 40% of TPC) $38,400 32% Province (EDT) (max 40% of TPC) Vendor In-Kind Discounts $24,000 20% Other Funding Sources $19,200 16% TOTAL $120,000 100% TPC increases, but CFI/EDT requests cannot. Shortfall There is now a shortfall. CFI/EDT will not provide more funds to cover the shortfall!

Potential Sources for Other Matching Contributions Examples of eligible sources: Institutional funds (U of A start-up accounts; departmental operating funds) Departments and agencies of the federal government Departments and agencies of provincial, territorial and municipal governments Firms and corporations Donations from individuals and non-profit organizations Non-eligible sources: Tri-council (NSERC, SSHRC, CIHR) awards Tri-council program awards (Networks of Centres of Excellence, Canada Research Chairs, etc.) Industry awards that are already matched to a Tri-Council award (e.g. industry match to an NSERC CRD) * Ref: Section 4.8 (page 21) in CFI’s Policy and Procedure Guide, 2013

Other Sources of Matching Contributions Examples of eligible sources: Institutional funds (U of A start-up accounts; departmental operating funds) Departments and agencies of the federal government Departments and agencies of provincial, territorial and municipal governments Firms and corporations Donations from individuals and non-profit organizations Non-eligible sources: Tri-council (NSERC, SSHRC, CIHR) awards Tri-council program awards (Networks of Centres of Excellence, Canada Research Chairs, etc.) Industry awards that are already matched to a Tri-Council award (e.g. industry match to an NSERC CRD) Funds that originate from the Alberta Ministry of Economic Development and Trade (EDT) are eligible but stack with the EDT Contribution through the Research Capacity Program (normally maximum 40% of total project costs) Alberta Infrastructure funds also stack with the EDT Contribution from the Research Capacity Program * Ref: Section 4.8 (page 21) in CFI’s Policy and Procedure Guide, 2013

Equipment Matches Recent equipment purchases can be used as a match to the project, provided: The purchase was completed <6 months prior to CFI application deadline The purchase was made using an eligible source of fund

Budget Template Groups of related equipment items Note – in this example, CFI/provincial requests Cover <40% of total project costs. U of A startup and vendor discounts are also sources of matching funds

Building Contingencies Into the Budget Exchange rates can change dramatically in a short period of time! RSO will advise applicants about an appropriate exchange rate to use for foreign currency For purchases from the U.S., RSO recommends using an exchange rate of $1.50 Canadian per $1 USD

Building Contingencies Into the Budget Purchases made by universities are taxed by the Government of Canada at a discounted GST rate (1.65% GST) During budget development, RSO recommends that the normal 5% GST rate is used in order to add further contingency into the budget Contingencies are good: If there are CFI/EDT award funds remaining after all items have been purchased, CFI award holders can use these funds for additional purchases that benefit the project Conversely, if contingencies are not incorporated, CFI award holders will be required to find other sources of funding to address any shortfall