Business and Economic Development

Tax Credits and Programs: Innovation Growth Program 


This guide is intended to assist prospective participants in determining their eligibility and completing their application under the Innovation Growth Program (IGP). This is a general guide, which will be updated on an ongoing basis. Because of the unique nature of each project, the guide cannot take into consideration every potential project scenario.

Download IGP Application Form

Application closing dates are:

September 16, 2019
December 16, 2019
March 16, 2020

Submit applications to:

Financial Analysis Branch
1010 - 259 Portage Avenue
Winnipeg, MB R3B 3P4
General email: FABGET@gov.mb.ca
General phone number: 204-945-2770

 

1. Overview

The IGP provides cost-sharing assistance to Small and Medium-Sized Enterprises (SMEs) to assist them in developing and commercializing new innovative products and processes. The IGP will support SMEs in the development and growth stages of the business life-cycle to reduce the risks associated with innovative product development, accelerate growth and strengthen their financial position so they can secure future funding to build their Manitoba-based business.

Under the IGP, firms may apply for a non-repayable grant of up to $100,000 to cost-share eligible expenses on a 50/50 basis.  The IGP approves projects using a competitive process and quarterly intakes. Only the strongest applications that meet the objectives of the program will be considered for funding.

 

2. Objectives

The objectives of the program are to:

  • Commercialize innovative products or processes
  • Leverage private sector investment in new product development
  • Create economic growth
  • Create jobs
  • Grow exports

 

3. Who Can Apply?

Applicants must meet the eligibility criteria to apply for the IGP.

Eligible applicants:

  • For-profit, Canadian Controlled Private Corporations with a permanent establishment in Manitoba and at least 50% of salaries and wages paid to Manitobans in the year before application.
  • Annual revenue of $15 million or less or fewer than 100 full time equivalent employees, on a consolidated basis.
  • Demonstrate owner investment of $25,000 in cash equity invested in the business prior to application.

Ineligible applicants:

  • Not-for-profit organizations
  • Professional practices which are regulated by a governing body of the profession under an Act of the Legislature
  • Business operations primarily earning passive income
  • Crown corporations, municipalities, towns and cities, or organizations owned or controlled by one of those groups
  • IGP is intended to support business ventures that do not qualify for other forms of Government of Manitoba financial assistance. Depending on the nature of the project, companies that qualify for assistance through other Government of Manitoba financial assistance programs will be directed to apply under those programs first.

 

4. Eligible Activities

Eligible applicants can apply for the following activities under IGP:

  • Development of new innovative products and processes: building prototypes, testing, trial runs in an operational environment, obtaining certification, and registering intellectual property.  Tooling may be eligible if it is required as part of the prototyping process.
  • Commercializing market ready innovative products or processes: adapting commercially viable products for a new market, market development or expansion activities and scale up activities, including testing and obtaining certification.

Innovation in the context of the IGP is defined as a product or process that is not currently available in the market.

Innovation is:

  • Significant modifications to existing products or processes that are applied in a setting or condition for which current technology applications are not possible or feasible; or
  • An improvement to an existing technology/process that represents a significant (generally patentable) improvement in functionality, cost or performance of goods and services that are considered state of the art or the current industry best practice.

Innovation is not:

  • Incremental improvements, "good engineering" and technologies that would go ahead in a normal course of product development (i.e. the next version or release).

 

5. Financial Assistance

  • The IGP provides a non-repayable grant of up to $100,000 to cost share eligible expenses on a 50/50 cost shared basis.
  • At least 50 per cent of eligible project costs must be supported by non-government sources and funding from non-government sources must be confirmed at the time of application.
  • Funding is capped at $100,000 per new project per corporation, and any affiliated corporations (same controlling shareholder or group of shareholders).  Only one project and application may be approved per applicant.
  • Eligible applicants will have to enter into a funding agreement with Manitoba Growth, Enterprise and Trade.

Funding Disbursement

Reimbursement is based on satisfactory proof of payment for expenses incurred in accordance with the terms of the funding agreement. Information on the reimbursement process will be included in the funding agreement.  IGP will not reimburse project expenses incurred prior to the date of funding approval.

Other Government Assistance

The Government of Manitoba’s total contribution will not exceed 50 per cent of total project costs. Total government support from all levels of government (federal, provincial, municipal), including tax rebates (excluding: equity tax credits, Scientific Research and Experimental Development Tax Credit and Paid Work Experience Tax Credit), cannot exceed 50 per cent of total project costs.

Eligible Costs

Eligible costs are expenses relating to the execution of activities related to the eligible activities for the approved project. As part of the application form, the applicant must provide detailed costs associated with each activity for which assistance is being requested. The applicant will be responsible for all costs related to the project, including all ineligible costs and cost overruns.  Due to the uniqueness of the projects submitted, the list of eligible and ineligible costs is not exhaustive and applicants are encouraged to list all their project costs.

Eligible Costs:

  • Legal fees associated with registration of intellectual property
  • Designing and building of prototypes
  • Tools, moulds
  • Testing costs, certifications
  • Product modifications for a new market
  • Third party advisory or technical services
  • Business to business tradeshows or events intended to secure distributors
  • Internal labour of net new hires directly working on the project (capped at 50% of total funding received under IGP)

Ineligible Costs:

  • Advertising
  • Land and buildings
  • Equipment
  • Owner salary* or dividends
  • Inventory
  • Primary research and development
  • Business registration and incorporation costs
  • Entertainment expenses
  • Professional dues, membership fees
  • Financing charges and taxes
  • Business plans
  • Website development
  • Costs not directly attributable to product development or commercialization
  • Activities relating to productivity improvements

* Note: Employee salaries are capped at 50% of IGP funding provided and limited to net new hires to whom a T4 is issued

 

6. Application Evaluation

IGP applications will be processed through a quarterly intake process. Applicants may only submit an application once the intake period opens. No applications will be accepted after the closing intake date.

The IGP is a competitive process and applications will be evaluated against other proposals received during the intake phase. A review panel and subject matter experts, as required, will evaluate full proposals. The panel will make final recommendations on which proposals may be considered for funding.  Applicants who are not selected for funding may reapply in future intakes.

Criteria

The review panel will evaluate the ability of all applicants to achieve IGP objectives using the following selection criteria:

A. Quality of The Project

  • Demonstrates a clear and comprehensive description of the proposed innovation;
  • Demonstrates clear and focused objectives and includes a work plan with appropriate methodology, timelines, and deliverables;
  • Demonstrates that the project is scientifically sound, technically feasible, and shows promise to generate new knowledge or to apply existing knowledge in an innovative manner; and
  • Demonstrates that the innovation is new to Manitoba and includes key features and benefits that offer an advantage over the competition.

B. Market for the Innovation

  • There is a defined market need, sufficient market size, and/or evidence of market growth;
  • There is an assessment of risk and evidence of plan to mitigate the risks;
  • Demonstrates a comprehensive industry assessment has been conducted and identifies key competitors;
  • Demonstrates the proposed innovation has key features and benefits that offer an advantage over the competition;
  • Demonstrates the likelihood of broad customer acquisition in a large market or market dominance in a narrow market segment;

C. Management Capacity

  • Demonstrates a strong lead champion with the capacity to guide the project to completion;
  • The team has the technical, managerial, financial, business, and legal expertise relevant to their respective industry that will enable them to move the proposed innovation to market;
  • Demonstrates an Intellectual Property strategy for the proposed innovation that is appropriate for their respective sector or industry (if necessary);
  • Demonstrates achievable milestones.

D. Commercialization Plan and Business Model

  • Demonstrates an adequate financial and commercialization strategy with the capacity, resources, and expertise to move the innovation to commercial markets;
  • Demonstrates the applicants’ go-to-market plan includes the necessary equipment and infrastructure required to move the proposed innovation to market;
  • Demonstrates the applicant has adequately identified and addressed the challenges and risks of commercialization (including technical challenges and anticipated reaction of large competitors); and
  • Demonstrates a realistic and coherent timeline with achievable milestones and deliverables.

E. Investments Secured

  • Demonstrates that the need for the financial request from IGP is reasonable given the project costs outlined in the budget;
  • Demonstrates a reasonable level of matching funds to complete the proposed project.

F. Benefits to Manitoba

  • Demonstrates that the project will lead to economic development benefits, including:
    • Number of jobs created;
    • Growth in company payroll;
    • Sales targets;
    • Export targets;
    • Increased industry competitiveness;
    • Incremental capital investment;
    • Other (please specify).

7. Application Requirements

Submissions to the program must include:

  • A completed IGP Application Form.
  • Current and forecasted income, balance sheet and cash flow information for the duration of the project. These statements should be for current operations, for the new project alone and on a combined basis. The forecasts must include all rationale/assumptions and market information on which they are based on.
  • Proof of confirmed funding from all other sources at the time of application, including government and non-government (non-government funding must represent at least 50 per cent of the proposed project costs).
  • Any other relevant information, such as business plans, marketing plans and market validation studies.

 

8. Reporting

Recipients of funding will be contacted annually for six years after receiving funding to collect performance data. The review will include telephone, email, and/or in-person interviews following up on the project and measuring overall company growth using such methods as financial statement reviews and collection of company issued T4 information. Data will be collected on company revenue, export revenue, employment numbers, company payroll and investment leveraged. Additional details will be provided in the funding agreement.

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