Written By Kelly R. Ford, Jesslyn Maurier, James Beeby, Robyn Enslen, Aoife McManus and Ryan Moore
The swift and significant effects of the COVID-19 pandemic have led many countries to seek home-grown solutions to respond to impacts of the pandemic.
As noted in COVID-19 Pandemic-Related Economic Stimulus for Canadian Businesses, the Government of Canada announced that it was mobilizing two of its existing Superclusters formed under the Innovation Superclusters Initiative to leverage Canadian expertise and financially support innovative responses to the spread of COVID-19 in Canada: (i) the Digital Technology Supercluster; and (ii) the Next Generation Manufacturing Canada Supercluster.
General Overview of the Innovation Superclusters Initiative
In 2017, the Government of Canada committed to invest $950 million over five years through the Innovation Supercluster Initiative as part of its broader Innovation and Skills Plan. The objective of the Innovation Supercluster Initiative is to transform existing regional innovation ecosystems, or clusters, in Canada into "Superclusters"—innovation hotbeds with long-term competitive advantages, outsized job-creation and growth and global recognition, akin to Silicon Valley.
Under the original Innovation Supercluster Initiative, industry-led consortiums represented by not-for-profit organizations could apply to be identified as a Supercluster and, if approved, would become eligible for project funding on a co-investment basis. To be approved as a Supercluster, applicants were required to:
- establish a critical mass of businesses of all sizes and industry-relevant academic and research institutions, among others, willing to collaborate;
- leverage funding from multiple private sector companies of economic and strategic importance within the cluster to co-invest with the Supercluster on projects; and
- develop an approach to accelerate innovation and further global competitive advantage to benefit the Supercluster as a whole.
In February 2018, five successful Supercluster applicants were announced by the Government of Canada, as detailed in the below table.
Supercluster and Region
Select Summary Details
Digital Technology Supercluster (DTS)
Example Approved Project
Protein Industries Canada
Example Approved Project
Next Generation Manufacturing Supercluster (NGen)
Example Approved Project
AI-Powered Supply Chains Supercluster (Québec)
Example Approved Project
Ocean Supercluster (Atlantic Canada)
Example Approved Project
COVID-19 Supercluster Programs
1. Digital Technology Supercluster
In response to COVID-19, DTS has launched a specialized COVID-19 Program to allocate up to $60 million of existing federal funding with the goal of mobilizing Canadian industry to expedite the development and deployment of innovations that address the health and safety concerns caused by the COVID-19 outbreak, as well as future health crises.
The program calls for businesses to make project submissions that address certain needs identified by the Government of Canada and DTS. Generally, submissions are asked to contemplate a combination of impactful technology development and deployment initiatives that can be delivered quickly.
To date, DTS has identified five critical areas of need for which it is calling for submissions from Canadians to address: (i) health system; (ii) community health; (iii) safe living; (iv) diagnostics and therapeutics; and (v) emergency response. While it lists these five major areas of need, DTS recognizes the rapidly changing nature of this unprecedented public health crisis and is also accepting any technology solutions that fall outside these categories, so long as they address the effects of COVID-19.
Application and Selection Process
Due to the need to deploy and scale-up timely solutions, the process for project submissions to the COVID-19 Program is more flexible and subject to an expedited timeline in comparison to regular programs deployed by DTS.
At the end of March, DTS invited associates and members of DTS to submit ideas and proposals to the COVID-19 Program. Applications to become an associate are free and may be completed online through DTS's website. Membership with DTS requires a financial commitment; however, in response to the current environment, DTS has made its fee structure more accessible, details of which can be found on DTS's website.
All idea submissions will be reviewed by a selection committee, which will then invite the most promising project teams to submit a full project proposal and budget. DTS is prioritizing those ideas that are the most impactful, address the most critical needs and have the ability to produce impacts in less than six months or be deployed within 18 months.
While in rare cases DTS may invest in single company initiatives, the program is intended for collaborative team efforts among industry and academic partners. If a project team is selected, the lead organization must be an industry member who is, or who is willing to become, a member of DTS prior to finalizing any Supercluster funding commitment.
Historically, DTS has funded an average of 43% of project costs, and in all cases has required funding to be matched by industry participants. In a divergence from this practice, the COVID-19 Program will fund anywhere from 50-100% of eligible project costs for selected proposals. Detailed rules regarding funding and eligible costs are set out in the Co-Investment Guidelines published by DTS.
Submissions for the program remain open and continuous.
On April 20, 2020, DTS announced the approval of four initial projects, as set out below, having already received over 300 submissions accounting for over $500 million in project ideas.
- Beacon – Realtime Global Data Sharing Network: DNAstack, in collaboration with Global Alliance for Genomics & Health and Microsoft in the development of a researcher-oriented cloud-based network to share real-time research and development data globally and provide a search engine for genomic virus variants.
- Feeding our Front Lines: Food-X Technologies, in collaboration with SPUD.ca, ADAPTECH, 1QBit, ETG Consulting and Microsoft in the development of an e-grocery management system to ensure fresh food is delivered to frontline workers and patients.
- Lifesaver – Predicting emerging pandemics: Finger Food Advanced Technology Group, in collaboration with the Red Cross, Team Rubicon, FEMA and the University of British Columbia in the development of a tool to better forecast future pandemics as they emerge by aggregating information about weather and travel conditions, and data from health authorities, medical institutions and public sources.
- Rapid Repurposing of Drugs for COVID-19: Variational AI is partnering with adMare BioInnovations to identify, through artificial intelligence, existing medications that may be repurposed to treat COVID-19 patients.
The Next Generation Manufacturing Canada Supercluster (NGen) has also launched a specific COVID-19 Response Program through which NGen proposes to allocate up to $50 million of existing federal funding to support the swift development and expansion of Canadian manufacturing needed to respond to the COVID-19 pandemic. The program seeks to fund companies to begin producing essential equipment, products and therapeutics. It also looks to scale-up existing producers of such items and to transition manufacturers of other goods to the production of these essential supplies.
Companies seeking to secure this funding must align with the priorities defined by the Government of Canada. The Project Guide published by NGen notes that companies should also make a commitment to one or both of the following:
- Providing the Canadian government with a right of first refusal for all products produced as a result of the program, as well as prioritizing sales to Canadian hospitals and other groups requiring such products before exporting any goods outside of Canada; and
- A willingness to license or otherwise making new intellectual property available for use by other companies that can assist with the rapid scale-up of manufacturing of the related technology.
Application and Selection Process
The application process for NGen COVID-19 funding is streamlined compared to its typical process. To be eligible for funding, an organization must be an NGen member, incorporated in Canada, and be either: (i) a for-profit organization or (ii) a not-for-profit organization that facilitates and funds research and development and that receives the majority of its funding from private-sector businesses. NGen membership is free and remains open; interested organizations can apply to be members.
NGen has created a specific COVID-19 project portal for members through which it will manage all applications. Applicants must answer the following six assessment questions:
- What COVID-19 product shortage or challenge does your project address?
- What is the transformational nature of the product?
- How will Canadians benefit from the project, and over what timescale?
- How will the results of your project be achieved?
- What is your overall project and risk management plan?
- Does the project team have the right skills and experience and access to facilities to deliver expected outcomes and benefits?
Through the COVID-19 Response Program, NGen will fund up to 100% of eligible project costs for selected project proposals that have an impact between April and the end of June, 2020, and up to 50% of eligible project costs for selected project proposals that have an impact after June 30, 2020, in either case to an expected maximum of $5 million per project. Detailed guidance regarding eligible costs can be found in the COVID-19 Response Project Financial Guide at www.ngen.ca/covidprojectguide.
All submissions will be reviewed by independent experts. Consistent with the DTS program, successful project proposals will generally require collaboration between entities, but funding of individual organizations will be considered where appropriate.
Submissions for the program remain open.
As of the date of this publication, three projects in Canada have already received funding support through NGen's COVID-19 Response Program:
- Face shields using 3D printing: Burloak Technologies Inc., in collaboration with Hamilton Health Sciences and Mohawk College to manufacture face shields. Production has begun and is anticipated to reach production volumes of approximately 10,000 units per week.
- Open-source ventilator design: StarFish Medical and Linamar, in collaboration with other companies to design and manufacture an open-source ventilator. The design builds on a ventilator originally designed by Winnipeg based Dr. Magdy Younes in the late 1980s.
- Rapid test kits: Sona Nanotech Inc., together with laboratories, hospitals and post-secondary institutions in the development and production of in-field COVID-19 test kits with improved detection, accuracy and the ability to provide results within 10 minutes. If successful, it is expected that this project will yield an output of 20,000 test kits per week with the potential to scale up to 1 million test kits per week.
In addition to the COVID-19 Response Program, NGen announced a specific challenge that opened on April 23, 2020, to help stop the spread of the virus through hands-free sanitation solutions. The challenge seeks to develop solutions to disinfect healthcare and private facilities by increasing the role of autonomous cleaning through the development of disinfection robots, decreasing human exposure to the virus and increasing confidence in the safety of such spaces.
NGen will provide up $1 million of federal funding per project. Proposed solutions must: (i) demonstrate an impact on COVID-19 in the next three to six months, or earlier; (ii) provide evidence that health and safety regulations will be met; (iii) prioritize Canada's needs and sell to Canadian organizations before any sales outside of Canada; and (iv) yield competitive advantages to Canadian industry through technological advancement. Other elements must also be satisfied – the full list of criteria is available at the NGen website.
Applications for the SARS-CoV-2 Challenge close on April 30, 2020, at 5:00 p.m. E.T.
We will continue to provide updates as further programs are made available and additional details are released. If your business or organization has questions in respect of COVID-19 funding-related matters, please contact the authors of this blog. In addition, please visit our COVID-19 Resource Centre for other COVID-19 related resources.
Please note that this publication presents an overview of notable legal trends and related updates. It is intended for informational purposes and not as a replacement for detailed legal advice. If you need guidance tailored to your specific circumstances, please contact one of the authors to explore how we can help you navigate your legal needs.
For permission to republish this or any other publication, contact Amrita Kochhar at email@example.com.