INNOVATION

Need small business funding? The government could help

Special to The Globe and Mail

(Wolfgang Amri)

A big source of frustration for small companies doing research and development into new and innovative products is finding helpful and relevant government funding and programs.

There are lots of them out there, at all levels of government, to help small companies overcome research and business challenges with either additional funding or resources. But keeping track of them is difficult, and adding to the complexity is that no two ministries will administer and publicize a government program the same way.

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A good place is to start is a federal website at www.canadabusiness.ca. You select what you are looking to finance, and which province the business is in, then you are given a long list of some of the funding programs available. It isn’t completely comprehensive, as there are many opportunities that are not listed, but it's a good starting point.

These are a few of the commonly used federal programs:

If your company is still in the early research phase, take a look at the Engage Grant, offered by the Natural Sciences and Engineering Research Council of Canada (NSERC).

In developing new technology, some companies may need expertise that is only found within a university. The grant offers up to $25,000 and it is available for first-time collaborations between a professor and a company when the business has a research challenge in the natural sciences and engineering fields. The funds are given to the academic researcher to cover project costs, while the company is required to give an in-kind contribution.

Any intellectual property arising from the project will belong to the company. More information on the Engage Grant can be found at http://www.nserc-crsng.gc.ca/Professors-Professeurs/RPP-PP/Engage-Engagement_eng.asp Companies looking to develop and commercialize a new technology product should contact the Industrial Research Assistance Program (IRAP). IRAP offers technical and business advisory services, and financial assistance to small and medium-sized companies. To access their services and funding, you need to introduce yourself to one of their industrial technology advisers (ITA), of which there are more than 240 across the country.

You will work with an ITA to define an R&D project to see whether it is eligible for financial support, which may be offered to small and medium-sized companies that have no more than 500 full-time equivalent employees and a goal to commercialize an innovative product in Canada. IRAP also delivers the Youth Employment Program, which offers financial assistance to small businesses to hire post-secondary science, engineering, technology, business and liberal arts graduates.

The IRAP website is: http://www.nrc-cnrc.gc.ca/eng/ibp/irap.html

If the technology you are working to commercialize was developed at a Canadian publicly-funded research institution -- a university, college or research hospital -- then you should contact the Centre of Excellence for the Commercialization of Research (CCR).

One of the goals of the CCR is to help emerging businesses grow to the point where they can attract private investment. To qualify, your company will need to fit into a priority sector:

1. Energy, environment and natural resources

2. Health and medical technologies

3. Information and communications technologies

4. Convergent technologies in the above sectors

Along with access to business resources, the CCR can help offset costs related to commercialization. Examples include IP protection costs, business plan development and technology evaluation. See http://www.oce-ontario.org/Pages/COEResearch.aspx for more information.

Finally, Canada has a very generous tax incentive program for companies that spend money on research and development called Scientific Research and Experimental Development (SR&ED). It is available to Canadian companies of all sizes and you do not need to be a technology company to take advantage of it.

You do need to demonstrate that you have been working on a scientific or technological challenge where there is no obvious or readily available solution. Qualifying expenditures may include wages, materials and equipment. Companies filing a successful claim can expect either cash refunds or tax credits for their expenditures.

The SR&ED program has been so successful that a whole industry of niche consulting firms has grown to help companies fill out the SR&ED applications. Many of those companies will accept as payment a percentage of the funds you get back from the government. The SR&ED website is: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/menu-eng.html

Special to The Globe and Mail

Brian Gordon is a principal with Technology Gateway Canada, a consulting firm that helps technology companies strengthen their business plans, find funding and grow their business during challenging economic times.