Archived — SADI Program Highlights 2011–2012

3. SADI Overview

SADI provides repayable contributions to support strategic R&D among Canadian A&D industries. By sharing in the risks and rewards of R&D, SADI supports innovation by Canadian A&D companies. The program also encourages private sector investment in R&D by increasing the amount of capital available for eligible projects.

The three key objectives of SADI investments

  1. encourage strategic R&D that will result in innovation and excellence in new and improved products, services, and processes;
  2. enhance the competitiveness of Canadian A&D companies; and
  3. foster collaboration between research institutes, universities, colleges and the private sector.

Eligibility Criteria

  • The company must be incorporated under Canadian law, conduct R&D in the A&D industries and contribute to a highly skilled and knowledge-based workforce.
  • The project must comprise industrial research or pre-competitive development.
  • The project must include strategic R&D activities that support the development of next generation A&D-related products or services, build on Canadian strengths in A&D technology development, enable Canadian companies to participate in major platforms and supply chains, or assist the A&D industries in achieving Canada's international obligations.
  • The applicant must demonstrate that SADI funding is required to meet the location, scope and/or timing of the proposed project.
  • The project must comprise R&D that takes place in Canada.
  • The project must involve collaboration with post secondary education institutions in Canada.

Project Approval Process

Submission of the Proposal: SADI proposals are accepted throughout the year using an on-line application form. There are no submission deadlines, nor contribution minimum/maximum amounts. Once the on-line application form is complete, it becomes the applicant's project proposal.

Eligibility and Completeness Screening: ITO screens each proposal to ensure that the project meets the six eligibility requirements and that the proposal contains adequate information upon which to start a due diligence review.

Due Diligence Review: ITO evaluates the company's capability to achieve the stated objectives (e.g. financial resources, management expertise, business plan, technical feasibility) and the social and economic benefits that would likely result from the R&D activities.

Project Approval: Final project approval rests with the Minister of Industry. Funding requests for more than $10 million require approval of the Treasury Board. Funding requests for more than $20 million require the approval of the Cabinet and the Treasury Board. Once a project receives approval, a contribution agreement is signed by the recipient and the Crown outlining the legally binding obligations and responsibilities of both parties, and the conditions under which payment will be made.

Repayment Terms

The SADI program provides repayable contributions, as opposed to loans, generally covering 40% of total eligible project costs. Repayments are based on the recipient's gross business revenue and usually begin two years after the completion of the R&D over a 15-year period. The maximum amount repayable is based on risk as calculated by ITO during the due diligence review.

SADI also supports projects under the Defence Development Sharing Agreement (DDSA) with the United States Department of Defence and the multi-national Joint Strike Fighter (JSF) program. SADI typically contributes 40% of eligible project costs and the repayment rate is 100% of the contribution, payable over 15 years for DDSA and over 20 years for JSF projects.

Monitoring Process

Annual site visits, monthly or quarterly progress reports, annual financial statements and annual benefit reports allow ITO to monitor the progress of the company in meeting the objectives of the project, with greater oversight in cases of high risk projects and projects of more material size.

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