If there's one message manufacturers can take away from the most recent federal budget, it's this: the future is now.
If you've been waiting for the perfect time to invest in R&D – or reposition your company towards a cleaner, greener future – the federal government has introduced several new funding programs and incentives that make billions of dollars available.
Three programs directly impact the manufacturing sector: the CME Smart Green Fund, SD Tech Green Fund and Low Carbon EconomyTrust.
There is approximately $77 million available to companies that invest in clean air, water and climate change projects that improve sustainability, productivity and competitiveness.
But the budget also includes investments in other areas that could have positive indirect impacts on manufacturing, including nearly $200 million from Natural Resources Canada for research, development and the demonstration of clean energy technologies. It's also committed to investing in infrastructure for alternative transportation fuels; technologies to reduce greenhouse gas emissions in the oil and gas sector; and academic research, which could potentially benefit manufacturers that develop collaborative applied research partnerships with universities.
If you're among the forward-thinkers eager to use government funds to help propel your business forward, here are a few ways to seize the opportunity.
Plan for the future
Most tax incentives and funding programs outlined in the budget take effect in the 2017-18 fiscal year, with more expected to roll out in the following years. This means you have time to get your ducks in a row and you should use it wisely.
Reflect on your existing operations, identify areas where you can become more sustainable and explore ways to align those business initiatives with recently announced government incentives and programs. This shouldn't be done blindly. Ensure every new initiative or project fits into your overall business strategy, and takes you one step closer to achieving long-term goals.
Apply now
Manufacturers typically have to respond to market forces swiftly, which all too often means they're already on top of a project before applying for funding. This may be too late to qualify for some of the budget's proposed funding programs, which require companies to apply for funds before making any investments.
Accelerate adoption
These programs are designed to encourage manufacturers to invest more, and accelerate the adoption of clean energy equipment and practices, but the requirements may make some manufacturers leery. After all, the application process alone will likely be lengthy, not to mention approval and funding.
This doesn't have to be a deterrent. The key is to build
realistic timelines into your business plan. Consider how long it
will take to thoroughly
research the funding options at hand and position projects so they
align with funding requirements.
It's also wise to factor in enough time to fill out the application, ask necessary questions and get approval.
These steps will increase your chances of acquiring available government funds and allow you to gauge the ideal time to launch a specific project or invest in new equipment.
Get creative
No changes were made to the federal government's existing Scientific Research & Experimental Development (SR&ED) program. Canadian-controlled private corporations (CCPCs) are still eligible through investment tax credits (ITCs) to receive a refund of up to 35% of the first $3 million of qualified SR&ED expenditures. Keep this in mind if you are denied approval or did not have time to complete the application process in advance.
With so much federal money earmarked for R&D across the 2016 budget, there are plenty of other funding opportunities available, you just have to be creative. One way to do this is by partnering with granting councils and universities, which are to receive $95 million per year in additional funding for academic research by finding new ways to commercialize new technologies or use these institutions as outsourced R&D houses.
Regardless of whether you opt to partner with a university or handle your R&D in-house, document every step of the process. Any piece of technical or financial evidence supporting your efforts, such as project planning documents, testing plans, laboratory notebooks or records of trial runs, greatly increase your chances of reclaiming R&D investment dollars.
Think ahead.
Many of the optional clean and green technologies today will be the legislative requirements of tomorrow – requirements you'll be forced to meet, whether you're financially prepared or not.
Get ahead of the tech curve and define your competitive position on the world stage, while the government is helping to foot the bill.
*As appearing in the July/August issue of PLANT magazine.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
