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Webinar for the preparation of a Letter of Intent (December 4, 2014)

2016 Centres of Excellence for Commercialization and Research (CECR) program competition

Presentation

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Webinar Questions and Answers

Scope

Eligibility of applicants

Partners

Governance

Budget/Eligible expenses

Completing the submissions

Review and Decision Process


 

Scope

What is the main difference between the BL-NCE and the CECR programs?

The BL-NCE program is based on industry-pull, where the network is looking to find solutions to challenges identified by its industrial members. Unlike the CECR program, the BL-NCE program supports direct research costs. The CECR-program is based more on a technology-push model where the centres are looking to commercialize products, services or other revenue sources and sell them in the marketplace to become a sustainable business.

Is a list of existing CECR's available?

For a list of current grantees for the CECR program, please refer to the NCE website.

How many CECRs are planned or expected to be supported through this call for new centres?

There are sufficient funds available to support approximately five centres between the 2016 Competitions for Additional Funding and New Centres.

How many of the existing CECRs have achieved sustainability? Are they eligible for this round of funding?

Of the initial centres funded through the CECR program, seven have received additional funding to pursue their sustainability plans. Centres funded in the 2010 CECR competition are competing in a separate competition from new centres. Centres previously funded through the program that did not receive funding in the last two CECR competitions for additional funding are eligible to apply in this competition but need to demonstrate that they have significantly changed their mandate, leadership and boards of directors.

Do health sciences as a priority include technological enterprises associated with enhancing the quality of leadership and management for successful health reform? Or is this only for clinical/medical innovations?

The competition is not limited to clinical/medical innovations as a targeted area, but it should be recognized that centres need to present a business plan that will allow them to become sustainable. Any activities proposed should be related to commercialization of goods or services that will generate economic benefit and contribute to meeting the objectives of the CECR program.

Could the priorities of the program change between now and the March 6, 2015 deadline for the submission of the Letter of Intent (LOI)?

No, there will not be changes to the priority areas between now and the submission deadline for the LOI on March 6, 2015.

What does the competition guide mean when it says that “Centres should be world-class”?

This should be interpreted as meaning that there is a high level of expectation for the quality of the applications and applicants to the CECR program, including involving national leaders in a given field in the applications.

Please define: "Clusters of Research Expertise."

“Clusters of research expertise” refers to groups of universities or companies that work together and are geographically co-located such as biomedical or aerospace communities in Montreal, energy sector in Alberta, advanced manufacturing sector in Ontario, representing leading expertise in the country in their respective sectors.

How does an applicant reconcile "Not for profit" status with "for profit" activities that are obviously more conducive (and necessary even) to fulfill self-sustainability?

Some centres eventually also establish for-profit corporations to deal with their commercialization activities and meet the requirements of the Canada Revenue Agency in terms of maintaining their not-for-profit status.

Must ‘commercialization’ be tied to a specific product or technology or can it range across a suite of technologies that may have application across several sectors?

Commercialization does not have to be tied to a specific product or technology; technologies can be platform technologies that apply across various sectors. Centres use a variety of business models and revenue streams to pursue their sustainability plans.

Do the activities of a centre have to be focused on commercialization 100%? Is it possible to have a commercialization arm and other arms that are focused on supporting & generating research that could lead to commercialization?

Centres may be able to pursue other activities as part of their mandate but should particularly focus on their commercialization activities as per for the focus of the CECR program. Some successful CECR s have revenue-generating Fee for Service arms.

CECR grant funds and matching partner contributions cannot be used towards the direct costs of research.

One common weakness listed in the webinar presentation refers to a commercialization scope that is too limited. Can you please expand on what is meant by "limited"? Does this refer to geographic regions, or stakeholders involved, etc.?

Commercialization scope that is too limited could refer to nature of commercialization activities, geographic reach or stakeholder involvement, or targeting an overly limited portion of the potential market, to mention a few possible interpretations. The scope of a given application should be developed based on the proposed business model and on the nature of the sector in question.

If you indicate financial sustainability beyond 5 years - say year 8 - would this be acceptable?

Yes, applicants should request the amount and duration of funding that will allow them to achieve sustainability within their business model. Applications requesting more than five years of funding will undergo a review at the end of their initial five years prior to being awarded the balance of their request.

 

Eligibility of applicants

Does the centre need to incorporated by the date for the filing of the LOI or can the incorporation be held off until the filing of the main application?

There is no requirement to be incorporated at the LOI stage or to submit a full application, but applicants who are successful at the full application stage would need to be incorporated as soon as possible to be able to sign the CECR funding agreement and receive NCE funds.

Does the centre have to be federally incorporated?

Centres can be incorporated federally or provincially.

Can colleges and polytechnics create an NFP to apply to commercialize applied research?

Yes, colleges and polytechnics can apply to the CECR program to commercialize their applied research. A successful application would require the creation of a not-for-profit corporation to be eligible to receive CECR funding.

Est-ce qu'un centre collégial de transfert technologique (centres de R&D associés aux collèges québécois) peut être l'hôte? (Can a college technology transfer centre act as the host for a CECR?)

Oui, un centre collégial de transfert technologique peut être l’hôte d’un organisme à but non-lucratif afin d’entreprendre des activités visant la commercialisation (Yes, a college technology transfer centre could be the host if a not-for-profit corporation is created to undertake the commercialization activities.)

How many colleges or polytechnics have been successful in the CECR competition?

There has never been a successful CECR application led by a college or polytechnic, although there are numerous centres that include colleges and polytechnics among their members or partner organizations.

Can the CEO of a spinoff be the lead applicant for the CECR and be the CEO of the center?

Yes, the CEO of a spin-off company could be the lead applicant for a CECR grant application and the eventual CEO for the centre once it was incorporated and awarded CECR funding.

Can a single institution be considered as a CECR applicant, or is it suggested that applications be multi-institutional?

As CECR grant recipients, centres are incorporated as not-for-profit entities and are intended to match clusters of research expertise with the business community to share the knowledge and resources that bring innovations to market faster. Centres are led by a consortium, which can include industry, academia, provincial and municipal governments, with a mixture relevant to their sector and their planned commercialization activities. In this context, multi-organizational applications are more consistent with the aims of the CECR program.

 

Partners

Must the applicant have a university host as a major partner?

No, there is no requirement for an applicant to have a university host. Applicants may have one or more universities as major partners if appropriate for their field and proposed business model but there is no specific requirement for applicants to have a university as a major partner.

Can private industry be one of the centre leaders?

A private industry member can be one of the centre’s leaders. The centre must be incorporated as a not-for-profit entity.

How do you assess the quality of involvement of end users or industry participation in the proposal?

At the LOI stage the quality of involvement of end-users or industrial participants is assessed through the content and quality of the letters of support. At the full application stage, in addition to the letters of support it is possible for applicants to include representatives of their partner organizations as part of their group of five members for their expert panel presentation, which is another opportunity for the partners to demonstrate their commitment to the centre and the importance of the centre in its given sector.

For the in-kind contributions, how much detail should the letters of support include at the LOI stage (i.e. do you require distinct salary commitments for individual personnel or is a total sufficient)?

Letters of support at both the LOI and full application stages should contain as much detail possible about the levels and nature of cash and in-kind support to be provided by partner organizations, recognizing that it may be difficult to accurately predict years into the future.

What happens if it is difficult for partner organizations to make specific commitments to the centre beyond the first few years of funding?

It is recognized that it may be difficult to obtain long-term, specific contributions from partner organizations. Nevertheless, applicants are encouraged to include letters of support from their partners that provide, to the extent possible, specific detail on the cash and in-kind contributions that will be provided. Firm partner commitments can enhance the credibility and merit of a proposal.

Can government organizations be considered as partners and can their contributions be monetized?

Partner organizations can include all levels of government, including both federal and provincial. Contributions provided by federal partners cannot be counted towards meeting the matching requirements of the CECR grant but federal partners can still participate in and support centres. Contributions from non-federal governments can be used to match CECR grant funds.

How are provincial matching funds seen by the reviewers?

Provincial matching funds would be favourably regarded if they are confirmed.

Is it expected that all partner organizations in the consortium be from only developed countries, including Canada?

Applicants can include international organizations among their partners if that is appropriate for their circumstances. Any centres funded through the program would need to be established in Canada and applicants need to be able to demonstrate benefits to Canada.

If partner organizations have provided support for non-CECR purposes prior to the grant being awarded and there are residual funds remaining, is it possible to use these unspent contributions received prior to the start date of the award towards the CECR matching requirements?

It is possible to use unspent cash contributions received prior to being notified of CECR grant approval, as long as they are not already committed and are earmarked in support for the CECR proposal.

What would be the expected role of for-profit industry members in a CECR if participating as a partner organization?

Industrial partners could fulfill a variety of roles, including providing support in cash, as well as in-kind support such as staff, expertise, access to facilities, serving as technology receptors or licensors or subscribing to a professional consortium organized by the centre or helping with the centre governance, to name some possibilities.

Should applicants aim to have multiple sources of revenue rather than a sole or a very limited number of sources?

Having diverse revenue streams enhances the sustainability plans of centres by making them less vulnerable to the collapse of any one of their revenue sources, whereas there is a higher risk associated with centres that are dependent on fewer sources.

 

Governance

How large should the board of directors be? Does the NCE Secretariat have any requirements as to the number of BOD members? Is it sufficient to have five or six members at the LOI phase?

There is no specific requirement related to board size at the LOI phase, but should an application be funded there is a requirement in the CECR funding agreement to have a board of at least 12 members, of which at least one-third should be independent members.

If the applicant is already a not-for-profit corporation with a Board of Directors, can the Centre’s Board include members and/or staff of the non-profit organization's Board, or is this considered a conflict of interest?

If the applicant is already incorporated as a not-for-profit, it is possible for members of its present board and its staff to participate in the new centre and its board of directors. The new centre has to operate independently and be governed as a distinct entity. The new centre would need to maintain a proportion of at least one-third independent members on its own board of directors and adhere to a conflict of interest policy that meets the standards of the NCE Secretariat.

 

Budget/Eligible expenses

If our sustainability plan indicates the need for more than $15 million and five years that the CECR program is able to pay out for the first tranche of funding, where do we indicate the remaining money and time in our forecast?

The LOI and full applications to the 2016 CECR Competition for New Centres should include the full value and duration of the CECR grant request in the budgetary tables in the application forms and also in the free-form business and financial plan sections.

What is meant by a balance between cash and in-kind?

Applicants should have a mixture of cash and in-kind contributions from their partner organization to advance their business and sustainability plans. Centres need to have cash contributions from their partner organizations to support their commercialization activities and their operational costs. In-kind contributions alone are not sufficient.

What is the expected level of matching funds/in kind for a CECR grant application? Would CFI contributions be considered a match?

There is no prescribed level of matching funds/in-kind contributions from partner organizations. Applicants should have a mix of cash and in-kind that will support their business plan and make them sustainable beyond their CECR grant funding. Federal funding sources, such as the CFI, cannot be used to fulfill the matching requirements of the CECR program, but they should be indicated in the application to demonstrate how the centre builds on other existing resources and infrastructure.

Our organization has already incorporated and has received guaranteed funds in our account for certain activities - but these activities/projects have not started. Can we count these as in-kind/cash for future activities?

Contributions from partner organizations cannot be counted towards the matching requirements of the CECR program prior to the applicants having been informed of the success of their full application. Partner contributions that have been earmarked for other purposes cannot be double-counted towards the matching requirements of the CECR program.

If we have received funds with no use restrictions from industry partners in 2014, can we leverage these (or what remains) for matching starting in March 2016?

As long as these funds are not already committed or restricted in their use then they can be used towards the CECR matching requirements once applicants have been informed of a successful result of their application.

For matching contributions, how far can you reach back for donations (e.g. donated equipment essential for the centre)?

Equipment donations from partner organizations can only be counted towards the matching requirements of the CECR program if they have been received after the results of the competition have been communicated to the successful applicants by the NCE Secretariat. Contributions must be confirmed by a letter of a support from the partner and would be ineligible as a matching contribution if already used as a matching contribution for another program.

Can CECR funds be used for investments?

Yes, CECR funds can be used for investments. Applications should clearly identify their business model and proposed revenue streams in their business and financial plans and identify any assumptions and risks in their proposed approach.

Is it correct that we need to find a combined $15 million in matching funds and in-kind contributions if we want to receive the maximum of $15 million in the centre’s initial five years available from the CECR program?

CECR grant funds can cover up to 50% of eligible commercialization costs and up to 75% of all other eligible costs, with the balance to come from partner contributions. The matching requirements of the CECR grant must be fulfilled over the lifetime of the grant. The amount awarded in the CECR competition is not correlated to bringing forward a prescribed level of partner support.

Is there a maximum amount of the CECR award that can be devoted to the administration of the centre?

No, but applicants are reminded that one of the program’s objectives is to fund sustainable centres so applicants should maintain an appropriate balance between commercialization and operating costs so as to effectively pursue their commercialization mandates.

 

Completing the submissions

Can we obtain an example of a "redacted" or otherwise of a successful LOI?

No, for reasons of confidentiality we are not able to provide past LOIs as reference material for applicants.

Has the LOI form been expanded at all from past competitions?

The CECR application form has been modified from the previous competition, but not substantially.

Will you be releasing a list of people that are thinking about submitting an LOI so that we can form partnerships?

For confidentiality reasons we are unable to disclose information about applicants who have submitted an LOI to the CECR program. Names of applicants who have been invited to submit a full application will be posted on our web site.

Last year there was a specific space in the NOI to justify FAP funding. There is no NOI this year but it didn't seem like there was space in the LOI form. Where should this be included?

The request for FAP funding should be provided as an appendix to the LOI application material.

Can you provide insight into the commitments that need to be in place on the eve of the main application: Full Board commitment, partner commitments, size of the board, number of partners, funding commitments, etc.?

Letters of support for both the LOI and full application phases should include as much information about partner commitments as possible so it is important to have as many of these details in place as possible in place at the time of application. Overall board membership does not need to be confirmed, but many applicants list potential interim board members. The potential board chair is also often identified and would often participate on behalf of the centre at the expert panel meeting during the adjudication of the full proposal.

What are main differences between financial planning overview and sections B & C?

Sections B and C do not include the in-kind contributions from partners, while those can be incorporated into the financial planning overview.

In which section of the LOI should performance targets, metrics, and milestones appear?

There is no requirement to include performance metrics in the LOI, but if applicants choose to include their main targets, metrics and milestones then they can be included in the Business Plan, as per the full application.

 

Review and Decision Process

How many applications have been submitted per cycle historically?

In the 2015 CECR competition for new centres there were 34 LOIs submitted. In the 2010 CECR competition there were 30 LOIs and in the 2009 competition there were 34.

How many LOIs do you intend to invite to full proposals?

The number of LOIs accepted will be contingent on the quality of LOIs received and on the budget available.

Does it matter whether the LOI is submitted in French or English?

Applicants may submit their LOIs in either official language.

What is the success rate of each step of the adjudication process?

Success rates will depend on the available budget based on the results of the 2016 CECR competition for additional funds to CECRs funded in 2010, being held in conjunction with the 2016 competition for new centres. In the last CECR competition for new centres there were 34 LOIs submitted, 11 applicants invited to submit full applications and five grants awarded.

If the applicant is judged on their track record of commercialization, does this mean the applicant needs to have a history of success in commercialization?

An applicant does not necessarily need to have a prior track record in commercialization, but it is important that some of the team members have the requisite experience to run a CECR. There is no expectation that past experience will be comprised solely of successes.

Does the track record include only the lead applicant or will industry partners be considered collectively?

The track record of the applicants and their partners will be considered collectively, with an emphasis on having the appropriate experience for the primary positions such as the centre director and the chair and members of the proposed board of directors.

Could you please outline in more detail what types of commercialization skills and experienced you are looking for?

Skills and experience that would be considered desirable for CECR applicants would include: entrepreneurship, launching new companies, sustaining new companies at early stage (or knowledge thereof) technical experience in scale-ups or prototyping and financing, protection of IP, governance, financial, legal.

Do you find that centers are more successful when they build off a previous or existing Strategic Network or initiative funded through the Ontario Research Fund or other similar granting programs?

We have never studied the success rate of applicants with a previous track record based on funding through other programs, so we cannot speculate as to what effect this might have.

How important is regional diversity in the CECR composition? Is there a weighting for each region?

There is no requirement for regional diversity. Applicants should involve key players in their own sector and build on existing clusters of expertise to build centres that will help brand Canada internationally in their field.

Does regional economic need factor into funding decisions for the CECR program?

Applications are reviewed based upon the assessment criteria for the CECR program, one of which is Benefits to Canada. Regional needs would fall under this criterion.

How do you weigh the number of jobs created directly and indirectly through the centres as a measure of sustainability?

The number of jobs created, directly and indirectly, by a centre is measured by the NCE Secretariat as part of its annual reporting metrics. The sustainability of a given centre is assessed independently during the peer-review process. The number of jobs to be created would be considered as part of the Benefits to Canada criterion and could also be considered as an element of the Strength of the Business Plan criterion.

Will the application be evaluated on the basis of number of jobs created, start-ups initiated, capacity of the centre to transfer knowledge to small and medium enterprises (SMEs)?

These would all be considered as part of the Benefits to Canada and the Strength of the Business Plan evaluation criteria.

Please elaborate on the matter of the training of Highly Qualified Personnel (HQP). How important is this in the evaluation of the application?

Training of HQP is not one of the evaluation criteria of the CECR program, although the attraction, retention and training of HQP and business leaders is one of the program’s expected benefits and would be considered as part of the Benefits to Canada criterion.

What happens if your sector is relatively new and has limited experts available who are completely independent?

The NCE Secretariat recruits broadly in an effort to get the services of top experts who are not in conflict. This involves recruiting internationally. Panelists must agree to the NCE Conflict of Interest guidelines before they are able to participate in the reviews. In terms of potential conflicts of interest on the centre’s board of directors, there is no requirement to avoid any potential members with conflicts but rather to have a policy that will enable the centre to manage these conflicts effectively.