IRB Transaction Engagement Protocol
Effective immediately, the process of providing notification, seeking Innovation, Science and Economic Development Canada review and feedback, and seeking approval of complex IRB transactions will occur through the following process:
- Gate One: Concept
- Gate Two: Term Sheet
- Gate Three: Submittal of Transaction Sheet
This process is mandatory for all transactions involving multipliers and discretionary for transactions which do not involve multipliers. Innovation, Science and Economic Development Canada reserves the right to require that IRB Obligors follow this process for IRB transactions identified as complex in nature.
This protocol applies to all IRB Obligors who currently have a contractual IRB Obligation as well as to IRB Obligors and potential IRB Obligors submitting IRB transactions through IRB Banking.
The objective of this phase is to provide an opportunity for Canadian recipient companies and/or IRB Obligors to present a potential idea to an Innovation, Science and Economic Development Canada IRB Manager, which in turn allows the IRB Manager to be more familiar with the business opportunity and the potential Canadian recipient company. This phase should occur early in the development of a potential complex IRB transaction. At this time, no feedback will be provided by Innovation, Science and Economic Development Canada. This is simply a "For information only" presentation.
Specific points of interest:
- IRB recipients and/or IRB Obligors may provide a presentation during this phase.
- This phase may involve more than one presentation depending on the length of time the potential IRB transaction remains in this phase.
- At this time, only the specific IRB Manager assigned to the IRB project will attend presentations. IRB Directorate Management and/or Innovation, Science and Economic Development Canada Senior Management will not participate in these presentations.
- Regional Development Agencies may be invited to attend these meetings if a potential transaction is within their regional interest.
- Innovation, Science and Economic Development Canada will not provide feedback on the eligibility of a potential transaction during this phase.
The Term Sheet
Once an Obligor is prepared to engage in formal discussions in order to eventually prepare a transaction sheet, they must notify the IRB Manager. A Term Sheet must then be completed and submitted to the IRB Manager. Only after receiving a completed Term Sheet will the IRB Manager provide any feedback on the eligibility of a potential IRB transaction. This feedback will not constitute approval or rejection of the potential transaction, but may be used by the Obligor to refine the potential transaction for preparation of Gate Three: Transaction Sheet. Once a Term Sheet is submitted to Innovation, Science and Economic Development Canada, the IRB Manager, IRB Directorate Management, and Innovation, Science and Economic Development Canada senior management will no longer engage with the potential recipient firm(s) nor their representatives for this potential transaction. However, if a Regional Development Agency (RDA) was involved in the Concept phase, the recipient company may continue to dialogue with the relevant RDA throughout the process.
A Term Sheet is available online or by requesting a copy from an IRB Manager. The Term Sheet template is the same as the Transaction Sheet template. Companies that are using the template as a Term Sheet should complete as many sections as is possible.
Specific points of interest:
- Once a Term Sheet is submitted, Innovation, Science and Economic Development Canada will only communicate directly with the Obligor regarding the potential transaction.
- Depending on the amount of detail contained in the Term Sheet, the IRB Manager may limit feedback on the eligibility of the potential transaction pending further information.
- During the Term Sheet phase, only the IRB Manager will communicate with the Obligor concerning the potential transaction. IRB Directorate Management or other IRB Managers will not provide feedback.
- Feedback provided to the Obligor by Innovation, Science and Economic Development Canada does not constitute acceptance or rejection of the potential IRB transaction. Acceptance or rejection of a transaction is granted following Gate Three: Transaction Sheet.
- The Term Sheet is subject to the same confidentiality protections as transaction sheets and can be submitted without prejudice by the IRB obligor.
The Transaction Sheet
Upon completion of the Term Sheet discussions, the Obligor will notify the IRB Manager of the desire to proceed to the third gate: Transaction Sheet. At this stage, the Obligor must complete and submit an IRB Transaction Sheet, with relevant supporting documentation, for review, evaluation and decision by Innovation, Science and Economic Development Canada. At this time, the IRB Manager will review and grant approval or rejection of the transaction. Innovation, Science and Economic Development Canada will only communicate directly with the Obligor on the IRB Transaction at this time and will not disclose the ultimate decision except to the Obligor.
Transaction Sheets are obtained through the RFP/Contract process of each procurement project and assessed based on IRB eligibility criteria as described in the Contract or Banking Agreement.
Specific points of interest:
- Innovation, Science and Economic Development Canada will communicate solely with the Obligor throughout this phase. It is the responsibility of the Obligor to communicate with the recipient on the status of the transaction.
- Incomplete Transaction Sheets will not be accepted by Industry Canada.
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