Guidelines for Third Parties

The purpose of these guidelines is to clarify how the ITB policy applies in circumstances where a contractor chooses to involve a third party in the implementation of an ITB transaction.

Definition:

  • A third party is an organization that plays a supporting role in a transaction between a contractor and a recipient company in Canada. This supporting role could involve a variety of activities, including: providing information and advice; identifying capabilities, match-making and facilitating meetings; managing a portfolio or group of contractor investments; or, leveraging other resources into the transaction.

General principles:

  • Innovation, Science and Economic Development Canada encourages contractors to undertake high quality and high value activities that will result in long term industrial benefits for the Canadian economy.
  • Innovation, Science and Economic Development Canada encourages strong collaboration and ongoing engagement between contractors and Canadian recipients, including in support of research and development activities. Any third party involvement on transactions should facilitate, and not replace, this collaboration and engagement.
  • Early engagement on transactions involving third parties should take place between a contractor and Innovation, Science and Economic Development Canada in advance of an investment.  Engagement may involve early conceptual discussions, or more formal feedback through the term sheet process (or draft transaction sheet).  In some cases, the participation of a third party may have an impact on a transaction’s eligibility and/or valuation.
  • Each proposed transaction is assessed by the ITB Authority against all of the eligibility criteria, including causality, timing, incrementality, eligible donor and level of technology
  • Innovation, Science and Economic Development Canada does not participate in the preparatory business development or decision making processes leading up to a contractor’s transaction sheet submission.
  • Innovation, Science and Economic Development Canada is the ITB Authority and is solely responsible for approval, verification and crediting of transactions.

Third party involvement:

  • Third party involvement and/or funding will be well described in a transaction sheet.
  • Funds flowing from a contractor to a recipient company in Canada may be available for ITB credit. Third party contributions, fees, or administrative costs are not eligible for credit.
  • When a third party manages a group of investments, transactions will be submitted to Innovation, Science and Economic Development Canada once the specifics of an individual investment have been identified (i.e. name of contractor, name of recipient company in Canada, description, value, timelines, etc.). Annual reporting will also be equally specific.
  • For third parties funded by government, Innovation, Science and Economic Development Canada may view a contractor’s investment as already being leveraged by another government program and therefore, not causal or incremental to the ITB Policy. Contractors would need to engage early with Innovation, Science and Economic Development Canada in the planning stages of these transactions, in order to demonstrate the role of the ITB Policy in decision-making, or whether more is being leveraged because of the ITB Policy.
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