Agricultural Innovation Program (AIP) November 2011

2 Background The Agricultural Innovation Program, a $50 million program ending March 31, 2013, is designed to accelerate the pace of innovation, facilitate the commercialization and adoption of innovative products, technologies, processes and/or services to enhance economic growth, 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: –accelerate the creation, availability, application and transfer of knowledge and technologies to the sector; and –enable the demonstration, and increase the successful commercialization and/or adoption of agriculture, agri-food and agri-based innovations.

3 AIP Overview – 2 Streams: Stream A: Knowledge Creation and Transfer Stream This stream aims to accelerate the research and development, availability, application and transfer of knowledge and technologies in the sector by providing funding support for: –local level collaborations addressing local innovation priorities; and –Implementation of industry-led collaborations focused on research and development. Stream B: Commercialization Stream This stream aims to support the competitiveness and sustainability of the sector by increasing the number of instances of successful commercialization and adoption of agri- based innovations in Canada. Funding support will be provided for activities such as constructing and renovating facilities, purchasing and installing equipment and marketing activities. Agricultural Innovation Program (AIP) Stream A: Knowledge Creation and Transfer Component 1 Innovation Strategy Development Component 2 Applied Science and Technology Development Projects Stream B Commercialization

4 Main points on each Stream Stream A: Knowledge Creation and Transfer –Focus on applied agricultural research and development and pre-commercialization projects (generally 3 to 7 years before commercialization) –Non repayable contribution –Total funding envelope – Max $4M per project – Max $10M per recipient under AIP Industry/application needs to contribute a minimum of 25% (50% for for-profit organization) cash In kind contributions are not eligible Salaries of AAFC experts is an eligible cost Eligible applicant: agricultural organizations (for profit and non-profit) Vote 1: $8M; Vote 10: $18M –Timeframe to complete a project: March 31, 2013 Stream B: Commercialization –Focus on increasing sector commercialization and adoption of innovative agricultural and agri- based products, processes and services (project must be ready to commercialize) –Unconditionally repayable contribution –Total funding envelope of $24M – Max $10M per project Industry/applicant targeted contribution is 50% In kind contributions are not eligible –Eligible applicants: agricultural for-profit organizations, co-operative and aboriginal groups –Timeframe to complete a project: March 31, 2013

5 Stream A: Knowledge Creation and Transfer Initiative $26M over 17 months ( ) The Knowledge Creation and Transfer stream aims to increase knowledge creation and transfer and to accelerate the pre-commercialization of new agri-practices, products and processes by supporting activities that: –Support the development of strategic business planning related to science and research to foster innovation and leadership; –increase the access to and support local 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 supports access to university, government and other scientific resources that may be required by local agricultural organizations and small to medium-sized agri-entrepreneurs to address specific issues or opportunities.

6 Stream A: Knowledge Creation and Transfer two components Stream A: Knowledge Creation and Transfer Initiative is further divided into 2 components: –Component 1: Innovation Strategy Development Examples of types of activities considered for funding: –investigations from a research perspective of market opportunities or threats; –strategic research business planning and development to foster leadership. –Component 2: Implementation of Applied Science and Technology Development projects Examples of types of projects considered for funding and/ support: –projects that provide scientific and technical research support relating to product, practice or process development; –technology development and projects for piloting, testing and demonstration; and –pre-commercialization and development projects involving agricultural products, processes and practices advancing projects towards the development and commercialization of intellectual property.

7 Stream A: Knowledge Creation and Transfer Funding / Support Under Component 1, not-for-profit organizations may target up to 75% of eligible costs and for-profit organizations may target up to 50% of eligible costs, up to $4 million maximum funding per project to facilitate value chain expansion and development including collaboration and planning activities by stakeholders, development of new or expansion of existing innovative opportunities and, the development of strategic business planning to foster leadership. Under Component 2, not-for-profit organizations may target up to 75% of eligible costs and for-profit organizations may target up to 50% of eligible costs, up to $4 million maximum funding and/or support per project to implement applied science and technology development projects directly resulting in greater opportunities for, or competitiveness of, the primary and value-added agriculture, agri-food and agri-based product sector in Canada. The maximum funding and/or support to any eligible recipient will not exceed $10 million over the life of AIP.

8 Stream B: Commercialization - $24M over 17 months 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. –Interest-free; –Unsecured, with a grace period of one year for existing business and up to three years for start-ups, following the completion of the projects; –repayable contribution funding of up to 50% of eligible project costs to a maximum of $10 million per project is available to support activities such as constructing and renovating facilities, purchasing and installing equipment and marketing. Accelerating the Commercialization and Adoption of Innovation in Canada

9 Stream B: Commercialization stream - description 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 The following activities are eligible under the Commercialization Stream: –commercializing and 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.

10 Stream B: Commercialization stream – description (cont’d) Applicants must demonstrate that the innovative product, technology, process or service is proven and ready for production or use, and that the project can be completed by March 31, Priority will be given to projects that are: – transformative for the sector, that is, projects that are leading edge, and are assessed to have the potential to change the way products are produced, technologies and processes are employed, or services are delivered in the sector, for example, using new agri-based ingredients or technologies to address a regulatory barrier or a consumer demand; and/or – focused on creating or expanding export markets; and/or – commercializing or adopting products, technologies, processes or services that have been recently proven i.e. within the last five years

11 The following Service Standards will apply to AIP. We will be establishing Departmental service standards for the program, however, due to limited timeframe, the following internal service standards will be targeted by AIP: – Two business days to respond to the initial enquiry made to our toll-free telephone number or program address – Two business days to acknowledge receipt of the proposal – Five business days to send the notification of any deficiencies/completeness of the proposal – 90 business days to review the application after it’s deemed complete. This service standard refer only to the due diligence process and the recommendation from the AIP to the higher management. The Departmental standard to be approved. – 10 business days to send a draft contribution agreement, upon project approval is received. Internal Service Standards for Both Streams

12 Program Information Agriculture and Agri-Food Canada Innovation Directorate