In 2013, Canada’s aerospace industry was responsible for more than 170,000 jobs, contributing close to $28 billion to the Canadian economy. Aerospace represents a priority sector of Canadian industry, evidenced through Canada’s recent Economic Action Plan. The Canadian Government committed funding sources of close to $1 billion over five years to the Strategic Aerospace and Defence Initiative (SADI). This funding program is the largest of its kind, providing repayable contributions that support strategic innovations conducted by space, aerospace, defence, and security companies. SADI has authorized $826 million to 25 projects, disbursing $411 million since launching in 2007.
SADI promotes research and development leading towards innovation in new products, services, or process innovations that help advance the profile of Canadian companies involved in aerospace and defence. It encourages connections between research institutes and organizations in the private sector of any size.
There are three primary objectives to SADI:
- Encouraging strategic research and development that fosters innovation or generates new or improved products, services, and processes,
- Generating further competitiveness in Canadian aerospace and defence companies, and
- Creating connections between research institutions, colleges, universities, and the private sector
Canada’s Industrial Technologies Office, which provides funding for priority technological development areas with major potential widespread and long-term economic benefits, manages this government funding initiative.
SADI accepts applications from small, medium, or large for-profit corporations. Corporations must be incorporated in Canada and operate their business in the country.
The applicant’s project can include as many contractors or subcontractors as the applicant deems necessary. Given the research and collaborative focuses of this initiative, at least 1% of total eligible costs are for post secondary educational institutes in Canada.
Successful applicants sign agreements between their corporation and the Crown, after which they are officially recipients of this funding initiative. Successful applicants manage their proposed projects, including submitting relevant claims and reporting on results as they arrive.
Eligible projects for funding
There are two streams of government funding available for aerospace and defence businesses: industrial research and pre-competitive development.
Industrial research covers planned research or critical investigation designed to uncover new knowledge, and applying this knowledge to new products or services, or improving existing ones.
The pre-competitive development stream covers transitioning industrial research into actionable plans, prototypes, or designs for new, improved, or modified products. This might cover conceptual creation and product design for processes or services, or initial demonstrations and pilot projects (unless the organization uses these demonstrations or pilot projects for industrial application or commercial exploitation). Applicants need to go beyond routine fixes: their ideas should be fairly major and influential in scope on the existing products or processes.
SADI gives preference to projects with a research and development focus in the country, including activities that support the following:
- Developing the sector to participate and compete in major global spheres and supply chains
- Helping the sector meet Canada’s international obligations in the sector
- Supporting the creation or improvement of state-of-the-art aerospace and defence technologies, services, or processes
- Building on existing Canadian strengths in aerospace and defence technologies
Beyond these considerations, organizations must also prove how SADI support is essential for achieving the scope, location, or timing of their project.
Available funding amounts
There is no minimum or maximum SADI contribution. This government funding initiative evaluates applicants on a per-project basis.
Eligible costs for consideration include labour, overhead, material, and specialized equipment, along with any other relevant costs. A fixed overhead rate of 75% applies to these projects, and total combined government funding from any source cannot exceed 75% of eligible costs.
Recipients of SADI should have enough resources to cover their research and development costs, which typically covers a five-year period. They can then submit claims for reimbursement for up to 40% of eligible project costs. The fifteen-year repayment period commences two years after the conclusion of the research and development phase.
Projects seeking approval for over $10 million in expenses require Treasury Board approval, while those over $20 million require Cabinet approval. With this much money on the line, your application needs to stand out. Let our team launch your aerospace or defence initiative today! If you are interested in obtaining some of the $1 billion dollars in government funding for aerospace businesses, contact us at INAC today.