Frequently asked questions

General Information

Eligible Applicants

Application Process

Funding


General Information

What type of research and development (R&D) does SADI support?

What type of research and development (R&D) does the Strategic Aerospace and Defence Initiative support?

The Strategic Aerospace and Defence Initiative provides repayable support for strategic industrial research and pre-competitive development projects in the aerospace, defence, space and security industries. Strategic projects are those that focus on next generation products/services, build on Canadian strengths, enable Canadian companies to participate in major platforms, and assist in meeting Canada's international obligations (e.g. the Joint Strike Fighter).

What are the objectives of this initiative?

What are the objectives of the Strategic Aerospace and Defence Initiative?

The objectives are to accelerate innovation, enhance the competitiveness of the aerospace and defence sector, and foster collaboration between research institutes, universities, colleges, and the private sector.

Why do we need this initiative?

Why do we need the Strategic Aerospace and Defence initiative?

In 2012, the aerospace manufacturing sector was the second most R&D intensive out of the key industrial sectors in the Canadian economy, with more than 20 % of its activity dedicated to R&D.

A&D projects are high-risk, with high development costs, long development lead times and long payback periods. These factors, combined with the cyclical nature of the industry, make it difficult for the private sector to entirely fund an R&D project.

Repayable government support ensures that A&D firms undertake R&D in Canada and that the country reaps the benefits of these investments. Supporting R&D in the industry also enables Canada to attract leading global A&D firms and world-leading scientific and engineering talent in high-technology industries.

How does this initiative foster collaboration between research institutes, universities and colleges, and the private sector?

How does the Strategic Aerospace and Defence Initiative foster collaboration between research institutes, universities and colleges, and the private sector?

Applications are assessed using a number of criteria to determine their suitability. One of the criteria is whether the project will be undertaken in collaboration with Canadian universities, colleges or affiliated research institutes. A minimum of 1% of total eligible project costs must be allocated toward such collaboration.

Encouraging collaborative R&D relationships helps to advance technology transfer, spin-offs and innovation, in addition to contributing to a skilled workforce and opportunities for on-the-job training.

How will this initiative benefit Canadians?

How will the Strategic Aerospace and Defence Initiative benefit Canadians?

Canadians will benefit from the economic spin-offs and technologies developed under this initiative. Investment in R&D by the aerospace and defence industries promotes technology development within diverse sectors of the Canadian economy, including electronics, nanotechnology and information technology. Past spin-offs from aerospace and defence technologies have resulted in applications in the medical field, electronics, and the automotive sector.

In addition, this initiative promotes collaboration between the industry, universities and colleges and research institutions, fostering technology transfer and the development of a highly skilled workforce.

How can I obtain more information?

How can I obtain more information on the Strategic Aerospace and Defence Initiative?

For more information please contact us.

Eligible Applicants

Who is eligible to apply for funding?

Who is eligible to apply for funding through the Strategic Aerospace and Defence Initiative?

Eligible applicants are companies incorporated in Canada with plans to undertake the R&D project in Canada. Companies of any size and from any sector may apply, provided the project involves R&D with primarily application to aerospace, space, defence, or security.

The initiative funds projects from across the country and funding decisions are based on a set of clear, predetermined assessment criteria.

In what research and development aspects of the security industry will SADI invest?

In what research and development aspects of the security industry will the Strategic Aerospace and Defence Initiative invest?

Due to the diverse nature of the security industry, potential applicants should contact ITO to discuss their project ideas with an investment officer.

Are small and medium-sized companies eligible for funding?

Are small and medium-sized companies eligible for funding through the Strategic Aerospace and Defence Initiative?

All companies incorporated in Canada undertaking R&D with aerospace, defence, space and security applications are eligible to apply for funding through SADI. SADI's portfolio includes small, medium and large companies.

Are there minimum/maximum dollar levels necessary to qualify?

Are there minimum/maximum dollar levels necessary to qualify with the Strategic Aerospace and Defence Initiative?

There is no minimum level of funding, nor a maximum limit on how much a company can apply to receive through SADI. Typically, SADI contributes 40 percent of a project's eligible costs.

Can two or more companies enter into a collaborative arrangement for a project?

Can two or more companies enter into a collaborative arrangement for a project with the Strategic Aerospace and Defence Initiative?

If companies would like to enter into a collaborative arrangement for the purposes of an R&D project, there are several ways they can apply for funding through SADI:

  • As co-signatories on the same contribution agreement;
  • By identifying one lead company amongst the group who will be the principle applicant and the sole signatory on the contribution agreement.

Application Process

How does a company apply for funding?

How does a company apply for funding to the Strategic Aerospace and Defence Initiative?

For information on submitting an application for funding, please visit the SADI Application Package section of the website.

Are proposals only accepted at certain times of the year?

Are proposals only accepted at certain times of the year with the Strategic Aerospace and Defence Initiative?

Applications can be submitted throughout the year. Complete proposals are considered in the order in which they are received.

Are investment officers available for consultation during the proposal writing stage?

Are investment officers available for consultation during the proposal writing stage of the Strategic Aerospace and Defence Initiative application process?

Companies interested in submitting applications for funding are strongly encouraged to consult with an investment officer at the beginning of the proposal preparation process. To have an officer assigned to its file, a company should contact ITO.

Does ITO have regional investment officers to work with SADI applicants?

Does the Strategic Aerospace and Defence Initiative have regional investment officers to work with SADI applicants?

ITO does not have investment officers based in the regions, but investment officers in the National Capital Region are available to work with applicants by telephone. If they have not already been assigned an investment officer, applicants are strongly encouraged to contact ITO.

How are project proposals assessed?

How are project proposals assessed for the Strategic Aerospace and Defence Initiative application process?

Proposals are assessed using the following set of predetermined criteria.

Technological Feasibility and capability

The proposal must demonstrate that the project is technologically feasible, and set out a plan that shows a clear understanding of the activities and resources required to achieve each of the objectives in the Statement of Work. The proposal must also outline technological risks and risk mitigation strategies.

Managerial capability

The proposal must demonstrate that the applicant has the required managerial capability in the core areas of project management, technology management, and financial planning and controls to successfully undertake the project.

Collaboration

The applicant must have a plan to collaborate with Canadian accredited post-secondary education institutions and allocate a minimum of 1% of total eligible project costs.

Market potential

The proposal must demonstrate that the applicant has a credible strategy to exploit the proposed technology or service in the marketplace upon completion of a successful R&D project.

Financial Information

The proposal must clearly demonstrate that the applicant has, or can reasonably be expected to obtain, the financial resources to complete the project and repay the Crown.

Benefits

The proposal must demonstrate that the project is expected to enhance the competitiveness of the applicant and generate broader economic and social benefits for Canada.

A complete outline of the assessment process can be found in the SADI Application Package.

What are the approval stages and how long does the entire approval process take?

What are the approval stages and how long does the entire approval process take with the Strategic Aerospace and Defence Initiative?

The service standard is to process applications requesting from $2 million to $10 million within 6 months from the day a complete application is submitted to the day it is approved. For applications from Small Enterprises (this applies to firms with less than 100 employees with applications requesting less than $2 million), the service standard is to process applications within 4 months from the day a complete application is submitted to the day it is approved. There is no service standard for applications seeking over $10 million given the added time required to obtain Cabinet and/or Treasury Board approval. Applications that are not complete will be sent back to the company with an explanation about what type of information is missing and can be resubmitted.

Companies that wish to obtain more detailed information about how to apply for repayable contributions through SADI should consult the SADI Application Package.

Funding

Will this initiative fund entire projects undertaken by A&D companies?

Will the Strategic Aerospace and Defence Initiative fund entire projects undertaken by A&D companies?

Typically, SADI contributes 40 percent of a project's eligible costs.

If a company receives funding, is it considered a loan?

If a company receives funding, is it considered a loan with the Strategic Aerospace and Defence Initiative?

SADI funding has two repayment options. Conditional repayment is based on a royalty applied to the company's gross business revenues, or in some circumstances, those of a relevant business unit or division. Royalty rates are set such that companies owe the amount disbursed if revenues remain flat over the entire 15 year repayment period. Royalty payments are waived in years of negative revenue growth. Royalty rates increase in years of strong revenue growth. Maximum repayable amounts are determined by ITO based on a risk assessment.

Unconditional repayments in agreed amounts over the 15 year repayment period are also an option and may be required in the case if some project.

How does funding get disbursed to successful applicants?

How does funding get disbursed to successful applicants of the Strategic Aerospace and Defence Initiative?

Recipients must submit project claims for incurred eligible costs as work is completed. Progress reports, which detail both the project work completed and work in progress, must also be submitted with the claim.

Project claims undergo a rigorous verification process by ITO to validate the eligibility and accuracy of claimed costs and cost breakdowns.

All projects are subject to being audited to ensure they are in compliance with the provisions outlined by the contribution agreement.

Can a company receive funding for its R&D project from other provincial and federal government sources as well as through SADI?

Can a company receive funding for its R&D project from other provincial and federal government sources as well as through the Strategic Aerospace and Defence Initiative?

Receiving funding from different levels of government is known as stacking, and is subject to the Treasury Board Secretariat's Policy on Transfer Payments

For a recipient to receive funding through SADI, the level of assistance from all government sources (federal, provincial, territorial, municipal) shall not normally exceed 75 percent of a project's eligible costs.

How do SADI repayable contributions affect a company's tax credits through the government's Scientific Research and Experimental Development (SR&ED) program?

How do the Strategic Aerospace and Defence Initiative repayable contributions affect a company's tax credits through the government's Scientific Research and Experimental Development (SR&ED) program?

SR&ED is a federal tax incentive program, to which Canadian companies can apply for investment tax credits for certain research and development expenditures. For information about which project specific SADI costs may be eligible for SR&ED tax credits, visit the CRA SR&ED website or contact your local SR&ED office.

Date modified: