Program Highlights 2012–2013

3. SADI Overview

SADI provides repayable contributions to support strategic R&D among Canadian based aerospace and defence industries. By sharing in the risks and rewards of R&D, SADI supports innovation by Canadian aerospace and defence 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 contributions

  1. encourage strategic R&D that will result in innovation and excellence in new or improved products, services, and processes;
  2. enhance the competitiveness of Canadian aerospace and defence 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 with aerospace and defence applications 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 aerospace and defence-related products or services, build on Canadian strengths in aerospace and defence technology development, enable Canadian companies to participate in major platforms and supply chains, or assist the aerospace and defence 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 social and economic benefits that it claims will result from the R&D activities, through an assessment of financial resources, management expertise, the business plan, technical feasibility, etc.

Project Approval: Final project approval rests with the Minister of Industry. Funding requests for more than $10 million require Treasury Board approval. Funding requests for more than $20 million require the Cabinet and the Treasury Board approvals. 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 payments will be made.

Repayment Terms

The SADI program provides repayable contributions, as opposed to loans, generally covering 40 percent of the total eligible project costs. Repayments are unconditional or based on the recipient's gross business revenue, and 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 Defense and the multi-national Joint Strike Fighter (JSF) program. SADI typically contributes 40 percent of eligible project costs and the repayment is 100 percent 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 large and high risk projects.

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