Budget 2017 – Canada: Encouraging formation and growth of superclusters

For Canada’s 150th birthday, the Federal Government has given Canada the gift of innovation. Like a parent who takes notice of their child’s musical talent and nurtures it with the gift of a guitar, the government has recognized Canada’s potential to be a globally competitive force in a variety of innovative fields.

Budget 2017 allocates roughly $1.7 billion to support Canadian innovation over the next five years. Of this amount, up to $950 million will go to the Accelerating Innovation Through Superclusters initiative.

What is a supercluster and who is eligible to apply?

Like the cosmic concept, superclusters (as discussed in the context of Budget 2017) are a compilation of smaller clusters. Superclusters are comprised of various companies (from small to large), post-secondary and research institutions, not-for-profits, and non-federal Crown corporations linked together by inputs, technologies, talent and infrastructure. The purpose is to create a network in which all of these organizations can collaborate and mutually benefit.

Eligible superclusters are industry-led consortiums represented by a not-for-profit organization. Consortiums facilitate this polygamous marriage between academia and the private and public sector. The government has focused on innovative industries such as, but not limited to, clean technology, advanced manufacturing, digital technology, health/bio-sciences, clean resources, agri-food, infrastructure and transportation.

To be eligible, the industry-led consortium must be comprised of organizations that are active in Canada. Additionally, the Lead Applicant – submitting the application and representing the industry-led consortium – must be incorporated under the Canada Not for Profit Corporations Act.

For more information on eligibility, please see the Program Guide.

What is the general application process?

The supercluster funding application will take place in two rounds. First, interested applicants must submit a Letter of Intent (LOI) by July 21, 2017 to the administrators of the innovation supercluster initiative – Innovation, Science and Economic Development Canada (ISED). A strong supercluster strategy is one that improves productivity, supports long-term growth of the cluster and economy, and creates jobs and commercial opportunities. Applicants must demonstrate that their government funding request is fully matched (1:1) by industry contributions, doubling the impact of the government’s investment. Up to 25 per cent of industry contributions can be in-kind, rather than in cash. During this phase, the applicant must submit at least four Letters of Commitment from each private-sector enterprise and a Letter of Support from one post-secondary institution identifying their intended contributions.

Successful applicants will then be invited to submit a Full Application. There is currently minimal information regarding what a Full Application will require other than secured financial commitments from the industry to match the funding requested, including 10 enterprises and 1 post-secondary institution. More detail will be provided once the first phase is complete, including the deadline for Full Applications. The new deadline will be posted on the Government of Canada website.

Once ISED has made their decision regarding the first-round, they will send out formal letters to all applicants notifying them of the results. This creates a secondary opportunity to apply for supercluster funding. If an unsuccessful applicant finds that their submission relates to a successful application, they can join the successful applicant as a partner in the subsequent round.

What do investments in superclusters mean for entrepreneurs?

Consortiums that receive funding are expected to redistribute the money to support member activities. This trickle-down of funds distributes financial resources to the organizations and projects that need them most, or possibly those with the best return potential. By focusing on consortiums that already facilitate collaboration and sharing resources, the government ensures greater receipt of value on these investments.

This funding initiative hopes to increase the number of superclusters, as well as the size of existing clusters in Canada. The government has outlined four ambitious objectives for this program:

(i) Create global competitive advantages within clusters
(ii) Boost sector productivity through increased R&D and innovation
(iii) Develop new companies and commercialize more products
(iv) Encourage collaboration between private, public and academic organizations to leverage their respective resources and capabilities

By creating an environment of collaboration and support the government hopes to spur innovation and economic growth.

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