Western Economic Diversification Canada
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Program Description

2. Background

The WINN Initiative will promote the development and diversification of the western Canadian economy by providing financial support to qualified SMEs to help them accelerate the commercialization of innovative products, processes and services in Western Canada, and by stimulating greater private sector investment in western Canadian commercialization activities.

Attracting early-stage capital for technology commercialization has been identified as a key challenge for SMEs in Western Canada. WINN will address the pre-commercialization funding gaps inhibiting firms from bringing new knowledge-based products and services to market.

Text Version: WINN Relative to Pre-Commercialization Funding Gaps

WINN Relative to Pre–Commercialization Funding Gaps

3. Objectives

The WINN Initiative aims to:

  • Commercialize innovative, technology-based products, processes and services;
  • Stimulate greater private sector investments in commercialization activities;
  • Increase the number of jobs for highly qualified personnel (HQP) in Canada; and
  • Enable company growth.

4. Eligibility

4.1 Eligible Recipients — Mandatory Criteria

WINN is open to enterprises that meet the following mandatory eligibility criteria:

  • For-profit businesses incorporated to conduct business in Canada;
  • Less than 500 full-time equivalent (FTE) employees (parents and subsidiaries included in final FTE count);
  • Have been in operation for at least one year;
  • Have operating facilities located in Western Canada (defined as British Columbia, Alberta, Saskatchewan or Manitoba);
  • Have a viable plan to commercialize (i.e., generate revenues from sales) an innovative, technology-driven, new or improved product, service or process within three years of project commencement;
  • Have sufficient intellectual property rights to carry out the proposed project and to commercially exploit the results of the project; and,
  • Have provided a current business plan, that includes elements of the proposed project and recent financial statements;
  • Have confirmed, at the time of application, funding from all other sources, including government and non- government (non-government funding must represent at least 50 percent of the proposed project costs); and
  • Are requesting no more than $3.5 million in WINN support.

4.2 Ineligible Recipients

The WINN Initiative is intended to help for-profit firms bring new technologies to market. As such, ineligible recipients include, but are not limited to:

  • Federal and provincial government departments, agencies, boards, corporations, and commissions;
  • Municipal governments;
  • Universities, colleges, hospitals;
  • Not-for-profit organizations; and,
  • Accelerators, incubators.

Depending on the project, organizations of this type may be eligible for support under other WD programs. Please consult the department's website for further information on WD's programs.

4.3 Eligible Activities

Project activities should be those that allow your firm to introduce a new product, process or service to a market or to technologically improve an existing product, process or service for new or existing markets. Examples of eligible activities include, but are not limited to:

  • Technology development/acceleration;
  • Product certifications, including Controlled Goods Registration;
  • Pilot projects (first user) and technology demonstration projects;
  • Validation of market potential and end-user acceptance; and
  • Support for marketing, human resources development, productivity, and process or quality improvement directly related to the commercialization of new opportunities.

5. Funding

5.1 Level of Assistance

Applicants may apply for WINN funding for up to 50 percent of total eligible costs for each project, to a maximum of $3.5 million per project. Applicants who have received past WINN funding are eligible to submit additional projects, but total support to any one organization cannot exceed $7.5 million over the life of the WINN Initiative (2013-2019). An applicant can submit only one application per intake period.

In addition, total government assistance, from any level of government (see glossary for definition) cannot exceed 50 percent of eligible project funding.

In-kind contributions will not be considered in the calculation of project costs. Applicants must provide confirmation of their cash investment into the project at the time of application and show non-governmental funding equal to or greater than the value of the funding request (i.e. the WINN contribution must not exceed 50 percent of the cash required to carry out the project).

5.2 SR&ED and Other Tax Credits

WD considers tax credits received for activities defined under the project, as a source of government assistance.  Such credits are considered for WINN stacking purposes.  Likewise, the Canada Revenue Agency may consider funding received from WINN to be government assistance, even though it will eventually be repaid.

Applicants are strongly advised to seek independent professional advice to determine the potential effect of WINN funding on project activities for which SR&ED tax credits, or other federal and provincial tax credits, are likely to be sought.

 Successful applicants who are in receipt of SR&ED tax credits and other similar federal or provincial tax credits for activities defined in the project are required to inform WD. WD may be required to reduce its overall level of project funding to ensure the total amount of government assistance remains at 50% of the project.

Should you also successfully receive WINN funding, CRA will consider that funding as taxable income.

5.3 Disbursements

If you are successful in obtaining WINN funding for your project, WD will provide the repayable funding in periodic reimbursements. These periodic reimbursements will be released to you for the approved portion (e.g. 50 percent) of eligible project costs that you have incurred and paid. Since successful applicants must submit a claim for reimbursement, there will be a delay between the time costs are incurred and when claimed costs are partly reimbursed. Successful applicants will therefore need to plan their project cash flow accordingly. WD will provide detailed instructions on this process to those Applicants approved for WINN funding.

5.4 Repayability

Agreements under the WINN Initiative will require recipients to repay the entire principal within six years of project completion.  Following a one year grace period after project completion, recipients will be required to make 60 equal monthly payments. Interest equal to the average bank rate plus 3% will be charged for any late principal payments.

There is no penalty for early repayment.

5.5 Project Duration

Projects may vary in duration, ranging from a few months to multiple years; however, the intent of WINN is to support projects that demonstrate plans to commercialize a new technology within three years of the Project Start Date (See section 14).

5.6 Eligible Costs

Incremental expenditures that are essential to the implementation of the project that may be eligible for reimbursement include, but may not be limited to:

  • Quantifiable design, engineering and other professional services;
  • Costs of prototype development materials consumed;
  • Costs of transportation of prototype to location of demonstration site;
  • Costs of third party certification, testing, quality assurance, etc.;
  • Costs of specialized insurance while item is onsite for demonstration;
  • Material and supplies costs consumed in the product development and production stages;
  • Capital costs for machinery and equipment;
  • Labour costs; and
  • Procurement of project-related innovation services (independent of the applicant), including, for example, patenting costs.

Where necessary for the implementation of the proposed project, WD may consider ongoing costs (e.g. labor) associated with incremental project activities eligible for the purposes of WINN. WD reserves the right to make the final determination on the value of contributions and to exclude expenditures deemed to be ineligible or outside the scope of the Initiative.

5.7 Ineligible Activities & Costs

Costs that are deemed unreasonable, not incremental, and/or not directly related to project activities will be ineligible for reimbursement. These include, but may not be limited to:

  • Land and buildings;
  • Basic or applied research;
  • Entertainment expenses;
  • Salary bonuses and dividend payments;
  • Allowance for interest on invested capital, bonds, debentures, and other debt;
  • Losses on investments, bad debts and associated expenses, other projects and contracts;
  • Refinancing of existing debts;
  • Amortization or depreciation of assets;
  • Federal and provincial income taxes, GST (recoverable portion), taxes or surtaxes on excess profit;
  • Provisions for contingencies or commissions paid to consultants to secure funding;
  • Lobbying activities; and
  • Donations, dues and membership fees.

Costs incurred prior to the WD Project Start Date will not be eligible. The WD Project Start Date should occur in the future, and after project decisions are made by WD. WD anticipates project decisions will be made approximately 6 months after the close of the application period.