Frequently Asked Questions (FAQ)

General questions

What is the purpose of Investments in Forest Industry Transformation (IFIT)?

The purpose of the IFIT program is to support Canada’s forest sector in becoming more economically competitive and environmentally sustainable. By “de-risking” new technologies and encouraging broader adoption of these technologies across the industry, IFIT supports forest industry transformation through a more diversified portfolio of products and markets.

How long has the IFIT program been operating?

The IFIT program was created in 2010 and was renewed again in 2014. In June 2017, the Government of Canada announced it would extend the IFIT program with $55 million in funding over three years until March 31, 2020. For more information about the announcement, please visit the softwood lumber backgrounder.

What is a Call for Proposals? Are applications currently being accepted?

The Call for Proposals (CFP) process is a fair, open, transparent and widely accepted business process whereby interested parties develop project proposals and apply for funding. The CFP #4 is now open. There are two streams:

Stream 1 – Small Enterprises. IFIT will contribute to projects under $2 million for companies that have less than 100 employees and less than $50 million in sales per year.

Stream 2 – General projects. IFIT will contribute to projects for companies of any size up to a maximum of $20 million per project.

All applicants are required to submit an Expression of Interest by Thursday, October 12 2017, at 17:00 EDT and an IFIT proposal form by November 28, 2017, at 17:00 EST. See “What is the application process” for more information.

What is the application process?

There are two phases of the application process. In Phase 1 applicants are required to submit an expression of interest (EOI) by Thursday, October 12, 2017, at 17:00 EDT. In Phase 2 applicants are required to submit an IFIT Proposal form (that is consistent with the project submitted as part of the EOI) by Tuesday, November 28, 2017, at 17:00 EST. Please see the IFIT Applicant’s Guide for more information.

What is an Expression of Interest (EOI)?

The EOI is an expression of interest and is the first phase of the application process. The EOI is a form [133 kb Word, 305 kb PDF] that is completed for the purposes of collecting information from applicants on potential projects to be submitted. It will assist the IFIT program in providing feedback to applicants on potential projects and compliance with program requirements. It is necessary to submit an EOI by October 12, 2017, at 17:00 EDT in order to progress to the second phase of the application process.

Will I be able to apply if I miss the EOI deadline?

No. Although the EOI will not be used as a pass/fail measure to assess applicants, an EOI will have to be submitted by the deadline in order to submit a proposal as part of Phase 2. Proposals will not be accepted under Phase 2 if an EOI was not submitted. The EOI deadline is Thursday October 12, 2017, at 17:00 EDT.

 

Eligibility

Who is eligible for funding under IFIT?

Eligible recipients are for-profit companies located in Canada, that either produce forest products in an existing forest product manufacturing facility (for example, pulp, paper, or lumber mills) located in Canada, or that are, or will be, new entrants in the forest sector for the purpose of the proposed project. As a general rule, an applicant’s main industrial activity should be covered under North American Industry Classification System (NAICS) codes 321 (Wood Product Manufacturing) or 322 (Paper Manufacturing). Projects will also need to meet all mandatory IFIT criteria in order to be considered for funding. For more information, visit the eligibility page.

For this CFP there are two streams:

Stream 1 – Small Enterprises. IFIT will contribute to projects under $2 million for companies that have less than 100 employees and less than $50 million in sales per year.

Stream 2 – General projects. IFIT will contribute to projects for companies of any size up to a maximum of $20 million per project.

For more information, please read the Applicant’s Guide.

At what stage of technology maturity must the projects be when submitting an application?

The proposed project must be at a pilot or commercial stage and incorporate technology that does not yet exist within the proposed scale and specifications in the Canadian forest industry. The IFIT program will not provide funding for projects dealing with technologies at the research, development and/or experimentation stages. The proposed project must constitute an advancement of forest sector technology in Canada.

Can I reapply for funding if I applied to IFIT during previous Calls For Proposals (CFP)?

Yes – provided that the project meets all mandatory criteria (see Program eligibility).

Are the funds in the form of grants or loans?

IFIT provides non-repayable contributions to projects that are selected for funding by the program. The IFIT Applicant’s Guide provides details on the reporting required by these contributions (section 4.6).

What is the difference between the two streams of funding?

Stream 1 – For small enterprises. IFIT will contribute to projects under $2 million for companies that have less than 100 employees and less than $50 million in sales per year.

Stream 2 – General projects. IFIT will contribute to projects for companies of any size up to a maximum of $20 million per project.

What types of documents must be provided for each funding stream?

Stream #1- Small Enterprises

  • Proposal Form and Appendices A - C
  • Articles of Incorporation (or equivalent) and Legal Partnership Documents (if applicable)
  • Process flow diagram
  • Project schedule
  • Business plan

Stream #2 – General

  • Proposal Form and Appendices A - C
  • Articles of Incorporation (or equivalent) and Legal Partnership Documents (if applicable)
  • Process Flow Diagram
  • Project Schedule
  • Business Plan
  • Technical Supporting Documentation
Can a project proposal “stack” funding received from other federal or provincial programs with the IFIT contribution?

Yes. However, the total Canadian government assistance (federal, provincial/territorial and municipal) cannot exceed 100% of the total project costs. Applicants must also ensure that their funding request to the IFIT program does not violate the stacking limits required by other funding organizations involved in the project.

Which costs are eligible for a project?

Eligible costs under IFIT are directly related to program objectives and include capital expenses, material and supplies, salaries and benefits, overhead expenses (maximum of 1.5% of project costs), sub-contractors and consultants (professional, scientific, technical and management services), travel (including meals and accommodation), training costs directly associated with the project implementation, printing services, and licence fees and permits.

Can the same company apply with more than one project?

Yes, but each project must submit a unique expression of interest and project proposal form.

Can a foreign company apply to the IFIT program?

Yes, however, the organization must have a facility in Canada and the project must be implemented in Canada.

Can technology suppliers apply to IFIT?

Only companies manufacturing products based on wood fibre are eligible for IFIT funding. If a supplier has a transformative technology ready for commercialization, it is recommended that they partner with a forest products company in order to apply to the program. The supplier can support the forest products company and assist in the development of the application; however the forest products company must be the applicant and the primary point of contact for our program.

What are the restrictions associated with the production of softwood lumber?

Costs associated with the production or export of softwood lumber are not eligible under IFIT. As part of its evaluation process, with the assistance of Global Affairs Canada, IFIT will be conducting a trade review to ensure compliance with all trade obligations, including the Softwood Lumber Agreement.

How do you distinguish a “softwood lumber product”?

IFIT is not an expert on softwood lumber agreement (SLA) issues and seeks guidance on such issues from the Softwood Lumber Litigation Unit at Global Affairs Canada (GAC). However, generally speaking, the primary generation of softwood lumber products (i.e. dimension lumber) sold as a commodity and used for further remanufacturing is subjected to SLA regulations. Secondary manufacturing (i.e. I-joist beams, doors, pallets, etc.) is generally not targeted by the regulations. Also, any company not exporting their goods to the US would not be subjected to SLA. The Annex to the SLA agreement outlines what products are included or not in the regulations. However, if the company producing the new product also produces other softwood lumber products, the situation would have to be examined and GAC consulted on any uncertainties.

While there is definitely some easily delineated categorization of wood products and manufacturers that do not fall under the SLA regulations, for any products that there is uncertainty around or projects taking place at sites where softwood lumber is being produced, then GAC is consulted on a case-by-case scenario.

What if we do not own an existing forest product manufacturing facility located in Canada but plan to build, purchase or lease one, could we still qualify for funding?

Yes. To be eligible for IFIT funding you must be a for-profit company that:

  • produces forest products and have an existing forest products manufacturing facility in Canada, or
  • will be, a new entrant in the forest sector for the purpose of the proposed project and will have a manufacturing facility in Canada for the production of forest products.

You can own, rent or lease the facility to be considered for IFIT funding. Also, the project being proposed does not have to be located at the facility where you currently produce your products, it could be a new facility that is owned, rented or leased. Proposals involving new facilities should be accompanied by documentation supporting both the ownership of the company’s existing facility as well as how the new facility will be acquired, constructed, leased or rented during project timelines.

How can I find out more about the results of past IFIT CFPs and funded projects?

For more information about the results of the IFIT program and the projects it has funded, you can read:

 

Timing and review

How will projects be selected?

Successful projects will be identified through a competitive process that will assess the technical and business viability of the proposed project against mandatory and evaluation criteria.

What are the mandatory and rated criteria, and where can I find them?

For more information on the mandatory and rated criteria, please read the Applicant’s Guide.

Will the projects that selected be publicly announced?

Yes. The IFIT program intends to directly notify all applicants of their status following the evaluation of applications. We will publicly announce the projects selected for funding after the signing of contribution agreements.

Is there an evaluation grid available for applicants to self-assess their application to see if they qualify to be short listed for Phase 2 of the evaluation?

There is no grid for applicants. Each project will be rated according to the mandatory and rated criteria to determine eligibility for funding. We will develop a short list of successful projects and proponents will then be notified if they have qualified for Phase 2.

Will a project reliant on recycled wood materials or damaged wood, such as rejected wood from factories or trees affected by emerald ash borer, limit a project’s eligibility for IFIT funding?

No. In fact, as set out in the Applicant’s Guide, preference is given to projects that consume fibre from currently underutilized sources and that will not divert fibre from existing higher-value uses.

If a company was successfully funded during IFIT’s previous Calls for Proposals and has adequately completed its project will this be taken into consideration when rating current applications for funding?

Yes and no. IFIT’s goal is to fund the most transformative technologies in the forest sector and past history would not determine eligibility. However if a company made it to the short list and had successfully completed a previously funded project, this would be taken into account during the due diligence and technical review process.

Does a company need to show that they have board approval at the EOI (Phase 1) and/or Proposal (Phase 2) phases?

No, this will be required during the due-diligence phase for short-listed projects being considered for funding.

What North American Industry Classification System (NAICS) codes qualify under IFIT's mandatory criteria?

NAICS numbers that start with 321 or 322 qualify under this part of IFIT's mandatory criteria.

Does a project with a timeline of less than three years suffer a disadvantage?

No. Preference will be given to applicants who propose the most credible and defensible project schedule. Projects scheduled for completion prior to March 31, 2020 may be given preference during the review.

 

Financial details

Is there a maximum or minimum IFIT contribution for projects?

The maximum amount that can be paid to any one project in CFP #4 is $20 million. There is no minimum value for project proposals.

The commercialization of a new technology requires funds to be paid before the time of the IFIT application. Can IFIT reimburse costs incurred before the application?

No. IFIT only reimburses eligible expenses incurred once the contribution agreement has been signed by NRCan and the applicant. However, once the proponent receives a conditional funding letter from IFIT, eligible costs incurred by the proponent can count towards total project costs. Please note that receipt of a conditional approval letter is not a guarantee that you will receive funding under the program. Therefore, applicants who incur costs between the receipt of a letter of conditional approval and the signing of a formal agreement do so at their own risk.

What are the rules regarding receiving funding from other sources?

While IFIT has the capacity to fund up to 50% of total project costs to a maximum of $20 million per project, preference will be given to projects demonstrating a high proportion of total project costs leveraged from industry partners and/or provinces (rather than other federal partners/programs) and those that can demonstrate secure/confirmed partnerships. The total Canadian government assistance (federal, provincial/territorial and municipal) and industry sources cannot exceed 100% of the total project costs. Historically, the average IFIT contribution was approximately 35%.

How will IFIT distribute funds?

Once the contribution agreement has been signed by the applicant and Natural Resources Canada (NRCan), payments will be made based on measurable, pre-defined project milestones, as well as upon receipt of the documentation as defined in the contribution agreements. Further, payments will be made based on receipt and approval of financial reports signed by the recipients’ Chief Financial Officer (or duly authorized officer) outlining the incurred eligible costs for the project.

Final payment will not be made until all agreed-upon project activities have been completed by a proponent and are deemed acceptable by NRCan.

Advance payments may be permitted when requested by the proponent, and based on an assessment of their financial need, level of risk and cash-flow requirements.

If an eligible project applicant has partnered with a non-forest industry company, how can the partner’s costs be reimbursed?

Costs can only be reimbursed to the company eligible under IFIT and the company that has signed the contribution agreement. Please contact an IFIT representative as the answer to this type of question can vary on a case-by-case basis.

Are contributions paid to “the project” or “the proponent?”

IFIT contributions are paid to the proponent based on the eligible costs incurred that are directly tied to the project.

Must project spending occur in Canada?

Not necessarily, however the project must be implemented in Canada. For example, a piece of equipment could be purchased from a foreign supplier but must be installed at a Canadian facility. Also, please keep in mind as per the Applicant’s Guide, section 3.4.2, #2 (Innovation), “…projects implementing technology for the first time in the forest sector, or adapted for the first time from other industry sectors will be preferred over technologies that are already operational in the forest industry in other countries and are being imported to Canada for the first time”.

Are ancillary expenses covered under IFIT’s criteria? (Market research, etc.)

All eligible expenses must be within the scope of the project and part of the eligible costs defined in the contribution agreement. Please contact an IFIT representative if you would like to discuss whether or not a specific cost could be eligible.

Is the IFIT contribution taxable?

Please seek the advice of a tax professional.

Can in-kind contributions be considered as part of total project cost?

Yes, but these contributions must be incremental and directly tied to the project. Eligible in-kind contributions must be a tangible expense, for example salary and benefits for employee hours directly related to the project.

 

Innovative products and product development

Would the project still be eligible for IFIT funding if an applicant intends not to share the intellectual property of the technology in their application to IFIT?

Yes. However, proponents must be able to demonstrate that their project constitutes an advancement of forest sector technology in Canada at a pilot to commercial scale and that the technology does not yet exist, at the proposed scale, in a forest sector industrial facility in Canada. Preference will also be given to projects with greater potential for replication across the sector, which could include various facilities of the same company

Is product development as relevant to IFIT as “new technologies?”

Research and development is not eligible under the program. As set out in the Applicant’s Guide, under section 3.4.2, #2 (Innovation) projects implementing technology for the first time in the forest sector, or adapted for the first time from other industry sectors, will be preferred over technologies that are already operational in the forest industry in other countries and are being imported to Canada for the first time. As the IFIT program aims to support the commercialisation of innovative technology, preference will be given to projects involving commercial-scale technology designed for the production of a marketable quantity of a product rather than pilot scale technology (which is considered to be at an industrial scale but designed to produce a small quantity of a product for technical and market analysis). Projects demonstrating a higher level of Canadian innovation, where the intellectual property or intelligence of the technology originates in Canada, will also be given greater consideration.

Who do I contact for more information?

Please contact the IFIT team for more information.