The federal government’s Friday morning announcement of $250 million for the Industrial Research Assistance Program (IRAP) program is about retaining top tier talent in Canada, says Minister of Industry Navdeep Bains.
“This is about retaining top tier talent in Canada because they’re going to be critical for economic recovery.”
In an interview with BetaKit on Friday afternoon, Bains highlighted that the idea behind adding capital to the existing federal program is to keep that talent in Canada.
“[This program] focuses on the core objective, which is about protecting Canada’s highly skilled innovators,” he said. “This is about retaining top tier talent in Canada because they’re going to be critical for economic recovery and economic growth as we come out of this crisis.”
The minister also emphasized that the $250 million is about providing funding to companies that have not been eligible to receive loans from banks and BDC, or for the Canada Emergency Wage Subsidy.
Bains’ acknowledgement that Canadain startups have not been eligible for the current emergency programs comes as many organizations, CEOs, and leaders in the community have been calling for targeted measures.
On Thursday, Yung Wu, CEO of MaRS, which works with hundreds of startups and high growth companies, emphasized that there are “days, not weeks and months” to preserve the innovation sector if certain steps are not taken.
“In order to drive innovation and drive these businesses with unique people and ingenuity it’s really about the skills component,” Bains told BetaKit. “It’s about development of talent and retention of talent. And that’s what this $250 million is all about.”
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When asked about eligibility for the new IRAP funding, Bains said there are no new criteria and the program remains open to small-and-medium-sized-enterprises (SMEs) with less than five hundred employees that are working on highly innovative technology or research and development.
He noted the criteria is fairly broad-based and startups that are pre-revenue or run on a SaaS model will be eligible – something that has been a concern for a number of Canadian startups in regards to the wage subsidy and loan programs.
“There’s a scalability component to it depending on the number of businesses that are engaged.”
There are restrictions, however, when it comes to combining IRAP funding with the other emergency measures. During a webinar with the Council of Canadain Innovators (CCI) late on Friday, Bains said that companies that are receiving the 75 percent wage subsidy will not be eligible for IRAP.
“[Companies] can’t double-dip,” he said.
Bains clarified, however, that companies might be able to access IRAP funding if they are not already subsidizing certain employees through the CEWS.
For example, companies could receive wage subsidy support for one employee and IRAP support for a different employee. But, if an employee is being subsidized under CEWS, that same employee cannot be supported through IRAP.
Bains noted that decisions will be made on a case by case basis.
The additional $250 million is designed to support more than 1,000 companies beyond IRAP’s current portfolio, Bains told BetaKit. He also estimates that more than 10,000 highly skilled jobs will be retained because of this influx of capital.
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Administered through the National Research Council of Canada, there is already an online registration form for companies to receive more information about the new funding. During the CCI webinar, Ian Stewart, president of the NRC, confirmed that applications will open Wednesday, April 22.
He also noted that as of Friday evening 800 companies had already registered to receive more information and be notified once applications open up.
When asked whether any further capital could be committed to IRAP, Bains told BetaKit, “there’s a scalability component to it depending on the number of businesses that are engaged.”
“We are in a position that we’ve demonstrated time and time again, to be nimble and flexible and be more generous, not less generous and to help scale up this initiative if it focuses on the core objective, which is about protecting Canada’s highly skilled innovators,” he said.
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“Rest assured,” said Bains on the CCI webinar, if you’re a company that meets the criteria “we will do everything we can to make sure we are there for you.”
“At this stage, we think this is a significant investment,” Bains told BetaKit. “It’ll help many companies, it’ll help many employees, but we will evaluate the situation as we roll this out.
When asked whether the federal government plans to further expand criteria for the CEWS and emergency loan programs to be more inclusive of startups Bains said the government is keeping its “ears to the ground.” We’re listening to the challenges of small businesses and will remain flexible, he said.