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Ontario Government Funding for your Innovative, Green Business

Published on
April 6, 2016

Business support programs have been something of a constant for the Ontario Liberal administration since they first won office in 2003. Back then, there was the $500M Ontario Automotive Investment Strategy (OAIS), and its sister program, the interest-free loan based Advanced Manufacturing Fund (AMF). These evolved into a sequence of other programs over the years and included flagship funds like the $1.15B Next Generation of Jobs Fund (NGOJF), the Strategic Jobs and Investment Fund (SJIF), and the more current $2.7B Jobs and Prosperity Fund (JPF). Criticized by opposition and some media outlets as ‘corporate welfare,’ these programs have nevertheless been credited with helping attract large investments and retaining some of the province’s largest employers over the years.

I’ve always felt that an interesting parallel could be drawn between government’s overarching economic policies and their flagship funding programs. For instance, the Ontario Automotive Investment Strategy (OAIS) that was launched in 2004 was reflective of government's interest in supporting Ontario's most important economic sector, automotive manufacturing. OAIS was soon credited in helping Ontario secure a greenfield investment from Toyota in 2005. Incidentally, the Woodstock, ON plant remains the last automotive OEM greenfield project in Canada.

As government's interest shifted to diversification, the next set of funding programs moved away from the auto sector and on to the "green" economy. Precipitated by a growing environmental movement, and supported by Al Gore’s “An Inconvenient Truth” - a film that had a significant impact on political agendas across North America - the environmentally focussed NGOJF was launched to promote investments in conservation and green technology.

Today's JPF proposes to support investments in innovation, exports and productivity. This slightly new focus is clearly in response to numerous economic studies released at the turn of the decade that showed Ontario's trade gap is increasing, and its productivity lag widening.

Do these various iterations of business support programs help to address the economic problems of the day in any meaningful way? There is much debate on that. Regardless, they keep being launched, and now the business community has been offered two new ones to look at.

Ontario's Fall Economic Update released in November of 2015, and the 2016 Ontario Budget each contained details of new programs called the Green Investment Fund (GIF), and the Business Growth Initiative (BGI). The environmental and innovation themes continue to be the main focus here, with the GIF also doubling as a transitional offering to the business community for the government's upcoming cap and trade program. The important thing to retain if you are an organization that aspires to participate in the “knowledge based economy” and has a link to the clean tech/green tech sector is that there likely is some public money in Ontario for you. This post aims to better organize each of the streams under these programs so that businesses can begin planning their engagement strategies.

Recently Announced Funding Programs:

Recently Announced Funding Programs

Green Investment Fund - $325M for 2016

The GIF has been characterized by the Premier as “a down payment on the province’s cap-and-trade program.” It is a one year program that will be repaid out of the $1.9 billion of expected revenues generated from the yet to be launched cap and trade program. The GIF has 9 separate streams, 4 of which appear to be accessible by business. The other 5 streams are targeted to social and private housing retrofits, and aboriginal communities. The business-focussed support includes the following announced streams:

Technology innovation initiatives for large industrial emitters ($74M) – This is the largest funding stream of the GIF and will be administered by the Ontario Centres of Excellence. The details of the program have yet to be announced, but it will be used to encourage large industrial plants to adopt leading-edge technologies developed by Ontario companies of various sizes.

Energy-efficiency/emissions-reduction support for small and medium-sized manufacturers ($25M) – the Green Smart program will be administered by the Canadian Manufacturers and Exporters, and will likely mirror their efficiency focused program, SMART. Resources will be provided to companies looking to make investments to “green” their facilities.

Electric vehicle public charging infrastructure ($20M) - Government is interested in contracting with providers of charging station infrastructure. The program's vision is to precipitate the timely installation of fast-charging electric vehicle stations along public roadways, workplaces, commercial centres, and various other public locations.

Energy-efficiency investments in small businesses ($1M) - With this investment, CoLab, a not-for-profit Waterloo, ON based organization that helps businesses set and achieve carbon reduction goals, will use the provincial money to provide further incentives to businesses that are interested in undertaking energy retrofits and building audits.

Business Growth Initiative (BGI) - $400M over 4 years

The BGI was outlined in the 2016 Budget and will focus on fostering the development and commercialization of disruptive technologies and their adoption throughout its key economic sectors. I am highlighting the announced programs relevant to private companies, and not the funds and programs that have been allocated to research institutions for the indirect benefit of industry. The BGI is broken down into the following streams:

Clean Tech Fund ($55M) - Ontario has committed $55 million to develop new approaches to make investments in exchange for equity in clean tech firms. This program will incorporate an equity based funding system, that is a means for government to take additional on earlier stage companies. More details will come when the program is launched.

Going Global Export Strategy ($30M) - Ontario has made available $30 million over the next three years to bolster their export strategy. Details have yet to be released, but components of the strategy include making advisory services available, and other incentives to support new and existing exporters.

Automotive Fund ($5M) - Ontario has announced it will be investing $5 million over two years to establish an Automotive Supplier Competitiveness Program, that will be designed to strengthen the technological capabilities of Ontario's auto parts sector;

Government procurement pilot - the Province announced that it will create a procurement pilot program that will allow new technologies to be tested by government. This has also been referred to as the "early adopter program" and promisses to help emerging technology firms gain the credibility and revenue they need to accelerate growth and access global markets;

Voucher Program for Leading High-Growth Firms - the program will focus on early stage companies that are deemed to have "the highest potential to scale into larger employers." It is said to be modelled after a similar U.K. program, that will help these companies execute on their growth strategy and quickly access the global marketplace;

Conclusion

With these two latest business support programs Ontario has once again broadcast its economic priorities. While many of these streams are not accepting applications yet, they should nevertheless be on the radar of your business if it is innovative and focused on green technology. If there appears to be a fit, not only in accessing these funds, but with helping Ontario meet their clearly presented economic objectives, you may wish to monitor these opportunities with an eye to initiating a dialogue with the Ontario government in the near future.

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