New support announced for oil and gas, creative and health sectors in Western Canada

Businesses in the oild and gas, creative and health sectors in Western Canada are set to benefit from several new funding announcements made last week by Western Economic Diversification Canada.

On Jan. 19, Minister of State for Western Economic Diversification Michelle Rempel announced $2.4 million in support for the University of Manitoba to establish an internationally accredited analytical Centre for Oil and Gas Research and Development (COGRaD). The new Centre will be a leader in environmental monitoring and remediation services.

The funding will be used to purchase highly specialized equipment that will allow the centre to collaborate with private businesses on R&D, test samples from the environment, and develop tools and techniques to assist companies to meet existing environmental monitoring and remediation challenges.

“This centre will establish the University of Manitoba in a new field of research and development that is an institutional priority: environmental sustainability,” said Dr. Digvir S. Jayas, Vice-President (Research and International) and Distinguished Professor, University of Manitoba. “We congratulate our researchers and their teams on this new funding and applaud their leadership in this area.”

Later in the week, another funding announcement came out of Western Economic Diversification – a $1.2 million grant to Creative BC, which represents the film, television, digital media, music, book and magazine publishing sectors in British Columbia.

The funding will be used to deliver a comprehensive and targeted trade and investment strategy aimed at increasing the penetration of the province’s creative industries into domestic and international markets, improving awareness of the province’s investment and production opportunities, and increasing the global significance of trade events.

“With our Government’s support, Creative BC will have the ability to market BC’s strengths in this sector by improving export development and investment attraction with the goal of promoting jobs and growth,” said Cathy McLeod, Parliamentary Secretary to the Minister of Labour and for Western Economic Diversification.

A third significant grant of $2.98 million was also made last week by Western Economic Diversification Canada to establish a Metabolomics Technology Demonstration Centre under a collaboration between Genome Alberta and the University of Alberta. The funding will be used to purchase state-of-the-art metabolomics assessment equipment to strengthen western Canadian companies’ ability to commercialize new discoveries.

Metabolomics examines cellular-level activities in cells, tissues and organisms, providing a way to measure gene-environment interactions. This field of research helps to generate solutions in human and animal health, agriculture and nutrition. Of note, one-third of all metabolomics companies in the world are located in Alberta.

FundingAwards – Who got Funded – Week of Jan. 19

Overall Disbursements: Funding from federal and provincial governments reached $200.6M this week, compared to $345.2M last week.

Top Sector: Academic & Research is the top sector this week, attracting $95.7M, 21% of the total amount disbursed.

Top Region: Ontario is the top province for the second week in a row, attracting 43% of the total amount disbursed.

Top Recipients in Ontario:

  • Industry: Patriot Forge receives up to $10 million from FedDev Ontario to expand its Brantford facility.
  • Hospitals, Universities, Research Centres & Industry Associations: AGE-WELL, a new research network, receives $36.6 million over five years from the federal Networks of Centres of Excellence (NCE) Program to help seniors live independently and safely at home.
  • Charities, Non-Profits & Public Sector: Ontario Centres of Excellence (OCE) receives up to $9 million in federal funding to expand its SmartStart Seed Fund (SmartStart). SmartStart supports entrepreneurs in Ontario with technology or innovation-based start-ups.

Funding Disbursed by Industry Sector:

sectors26

Funding Disbursed by Province:

pros26

Active Funding Programs this Week:

  • Aboriginal Economic Development Fund (AEDF)
  • Agriculture Development Fund (ADF)
  • Agri-Food Research & Development Initiative (GI-ARDI)
  • Business Development Program
  • Campus-Linked Accelerators (CLA)
  • Canada Arts Presentation Fund
  • Canadian Agricultural Adaptation Program (CAAP)
  • ÉcoPerformance
  • Fonds de recherche du Québec
  • Fonds d’initiative et de rayonnement de la métropole
  • Investing in Business Growth & Productivity
  • Investing in Business Innovation (IBI)
  • Major Science Initiatives Fund
  • NB Growth Program
  • Northern Ontario Development Program
  • On-Campus Entrepreneurship Activities (OCEA)
  • Pacific Integrated Commercial Fishing Initiative (PICFI)
  • Programme de développement de l’industrie touristique
  • Quebec Economic Development Program
  • Skills for Jobs Blueprint
  • Southwestern Ontario Development Fund
  • Strategic Partnerships Initiative
  • Western Diversification Program
  • Youth Justice Initiative.

To receive daily reports on which organizations received funding in Canada, subscribe to The Funding Portal’s FundingAwards™ service.

Canadian Private Financing and M&A News Roundup – Week of Jan. 19

  • Capital Markets
    • Kensington Venture Fund, part of the Government of Canada’s Venture Capital Action Plan (VCAP), made its first four investments:
      • Georgian Partners II of Toronto,
      • NOVACAP TMT IV of Montreal,
      • Blue Ant Media Inc. of Toronto, and
      • Walden Venture Capital VIII of San Francisco.
  • Cleantech
    • Toronto-based Canadian Solar Inc. sold its AC Glenarm solar power plant to Dutch Infrastructure Fund BV, an Amsterdam-based private infrastructure investment firm based in . The plant is valued at more than $60M.
  • Healthtech
    • Montreal-based biotech company enGene Inc. closed a $13.5M Series B round to help it develop an innovative platform technology for delivering genes to cells lining the gastrointestinal tract. The round was led by Forbion Capital Partners, with participation of new investors Fonds de solidarité FTQ and Pharmstandard International S.A.. Existing investor Lumira Capital via its Merck Lumira Biosciences Fund, which led the Series A round in 2013, also participated.
  • Tech
    • Singspiel, a music learning mobile app, completed a $350K seed round led by the MaRS Investment Accelerator Fund.
    • BDC Capital Growth and Transition Capital invested $3M for a minority interest in Montreal-based Budge Studios, a leading applications developer and publisher of children’s apps for smartphones and tablets.
    • McRock Capital held a second close for McRock iNFund LP, an Industrial Internet of Things (IIoT) venture capital fund, with new commitments from Cisco Investments and Teralys Capital Innovation LP. BDC Capital also increased its commitment in the latest closing. A final fund close is scheduled in 2015 with a cap of $65M.
    • Toronto-based SceneDoc Inc., a software developer for law enforcement and public safety, raised $4M in Series A funding from iGan Partners, Motorola Solutions Venture Capital, and a group of private investors.
    • Québec-based Poka Inc., the developer of first social industrial platform for manufacturing companies, raised $2.5M in funding led by iNovia Capital with participation of SoftTech VC and Nicolas Darveau-Garneau.
    • Toronto-based Rubikloud Technologies Inc. raised $7M in an oversubscribed Series A financing round led by TOM Group and Ule with participation from Access Industries and other private investors. The Rubikloud platform processes, cleans, and models important data for retailers, turning data into an asset in real time.
    • Montreal-based fitness ecosystemm platform LIFT Session raised $1M in seed financing.

FundingSources – Must Reads

  • EDC: Export Development Canada (EDC) was awarded the Best Trade Finance Multi-Lateral Institution or Export Credit Agency Award for 2015 by Global Finance magazine.
  • FedDev Ontario: FedDev Ontario Minister Gary Goodyear recently concluded a productive tour of southern Ontario, during which he announced 11 important investments to create jobs and grow local companies, and met with stakeholders at pre-Budget roundtables. The Minister and local Members of Parliament announced more than $41 million for a range of projects, from improving manufacturing facilities in Barrie, Brantford, Toronto and Mississauga, to supporting innovative technologies in the Ottawa and Toronto areas.
  • FedDev Ontario: More entrepreneurs in southern Ontario will benefit from support through Ontario Centres of Excellence’s (OCE) SmartStart Seed Fund (SmartStart), thanks to an investment of up to $9 million announced by FedDev Ontario Minister Gary Goodyear. SmartStart provides seed financing and funding for entrepreneurship skills training to help high-potential start-up companies grow their companies and make them investment and customer ready.
  • Finance Canada: Minister of State (Finance) Kevin Sorenson hosted a roundtable pre-budget consultation in Mississauga with the Mississauga Board of Trade, along with local Members of Parliament. Pre-budget consultations began in November 2014.
  • PWGSC: The federal government announced the awarding of the build contract with Irving Shipbuilding Inc. for the construction of six Arctic Offshore Patrol Ships (AOPS) as part of the National Shipbuilding Procurement Strategy (NSPS). This contract, valued at $2.3 billion, marks the start of the construction phase under the NSPS.
  • Western Economic Diversification Canada: The federal government announced $1.2 million in funding to Creative BC to build the capacity of British Columbia’s creative industries. It also announced $2.4 million in support to the University of Manitoba (UofM), to establish an internationally accredited analytical Centre for Oil and Gas Research and Development (COGRaD). This support will make the COGRaD a leader in environmental monitoring and remediation services.

Cross currents in cleantech financing

By Richard Rémillard, President, Rémillard Consulting Group, Director, PCMA, Advisory Council, The Funding Portal

Making sense of what’s going on in cleantech financing is becoming increasingly challenging for analysts and policy makers alike. In recent years, we have seen an explosion of financing instruments ranging from green bonds of various hues, to government funding programs, to venture capital and private equity rounds, to public stock exchange listings of cleantech firms. On the surface, everything looks rosy. But, drill deeper and one realizes the signals sent out by all this activity are mixed, to say the least.

Case in point:

  • Government cleantech funding in Canada seems to be on an exponential growth trajectory with 54 of the top 500 recipients of public dollars going to cleantech companies in 2013, according to the 2014 Report on Business – The Funding Portal Top 500. However, in the first nine months of 2014, only $56 million had been invested in the sector by venture capital funds, down from $263 million in the prior year.
  • According to a reputed cleantech industry advisory firm, there are roughly 700 cleantech firms in Canada employing some 41,000 people. This prompted one journalist to write in mid-November that, “ Cleantech is Canada’s fastest-growing industry and perhaps its best-kept secret.” However, the stock performance of cleantech firms has been uninspiring. As of mid-December, the S+P/TSX Renewable Energy and Clean Tech Index stood at about the same level as it was at the beginning of the year, and contained only one stock that had posted a triple-digit gain.
  • The TSX reports that it is number one in the world for listings of renewable energy and cleantech companies globally, with 116 firms having a market cap of $22 billion. These listed firms raised $1.5 billion in equity in 2013. However, in the 2010-14 period, the Renewable Energy and Clean Tech Index underperformed the S&P/TSX Composite by a healthy margin. As one Canadian venture capital fund executive put it, “For many, investing in green has been like riding an enormous roller-coaster.”

One of the keys to understanding what is going on is that it has been relatively painless for governments to award for the large part what amount to modest funds to support a wide variety of early-stage cleantech enterprises. That is because the existing thought paradigm of government cleantech financing policy prioritizes support for nascent firms or those with pre-commercial technologies. For instance, the 2013 SDTC Annual Report pointed to the organization as having funded 269 projects with $684 million in allocated funding, or roughly $2.5 million in funding per project.

However, the very nature of cleantech compels considerable investing dollars in order to propel companies towards later stages of growth and, potentially, larger rewards. For instance, one company, Blue Earth Renewables, reportedly raised $81 million in equity financing in 2014, bringing the total amount raised to $250 million since its 2010 incorporation. Another firm, Enerkem, raised $87 million in equity financing in the first half of 2013 alone, while Ottawa’s Plasco Energy raised more than $390 million since 2005.

This prompts the following observations:

  • The capital intensive nature of many aspects of cleantech taken together with the relative dearth of venture capital overall in Canada, plus the focus of government financing in earlier-stage cleantech firms, means that many of these companies risk being stranded – short of them being funded by foreign capital providers. For instance, a U.S. winner of the global Clean Tech 100 awards for the top private companies in the sector (5,995 firms from 60 countries were considered, 100 from 17 countries were selected – including 5 Canadian firms) recently received US$60 million from the New Zealand Superannuation Fund.
  • Government policy regarding cleantech should probably provide more substantial financial support to later-stage companies than is currently the case. This support should be structured so that there is an upside to the government upon a successful exit via an IPO or a sale of the asset to a strategic acquirer. Government also needs to change its perspective on cleantech. Companies in this sector should not be considered as being in the same bucket as other early-stage high tech sectors like digital media, where the capital requirements for company acceleration are different and largely considerably lower. Rather, the appropriate paradigm is for government to treat cleantech as it does mature manufacturing companies like Linamar, which accessed $100 million in government financing earlier this month and Pratt and Whitney that received $300 million this past December. For early-stage government financing, the example of cleantech clearly demonstrates that one size does not fit all.

The burning question then is: is government prepared to approach how it funds early-stage clean tech firms in a new way?

Only time will tell.

QP Briefing: Liberal government hands over $56 million in pre-promised brain research funding

By Natalie Paddon

The Province is kicking in $56 million to help fund scientific research into the treatment and diagnosis of autism, depression, Alzheimer’s and Parkinson’s.

Announced at the Ontario Science Centre on Monday, the funding is part of Ontario’s five-year, $100-million commitment to the Ontario Brain Institute first promised in March 2013.

“Brain disorders not only affect many Ontarians very personally, they also have a huge economic impact on our province, so I’m thrilled that Ontario is so sharply focused on becoming a global leader in brain research and innovative patient-focused treatment,” Minister of Research and Innovation Reza Moridi said in a release.

“The Ontario Brain Institute is bringing partners together to make critical discoveries that will get important treatments out of the lab and into clinics faster to treat patients, and we look forward to their continued progress towards this critical goal.”

The Province’s investment will:

    • Foster breakthroughs in the diagnosis and treatment of cerebral palsy, epilepsy and neurodevelopmental disorders such as autism and ADHD
    • Support faster diagnosis and more personalized treatments for depression
    • Promote advancements in the diagnosis and treatment of Alzheimer’s, Parkinson’s, ALS and other neurodegenerative diseases

According to the ministry, more than one million Ontarians live with depression, and one in three Canadians will be affected by a neurological or psychiatric disease, disorder or injury at some point in their lives.

The government’s investment helps leverage an additional $28 million in funding from institutions collaborating with the OBI along with other industry, philanthropic, federal and international sources, bringing the total value of these programs to $84 million.

“Many seniors and their families are affected by debilitating brain diseases like Alzheimer’s, Parkinson’s and ALS, and the numbers continue to grow,” said Mario Sergio, the minister responsible for seniors affairs, in a release. “Investing in important research to help us better understand and treat these illnesses will improve the everyday lives of seniors and their families across the province.”

Nearly 200,000 Ontarians 65 and older have dementia and related problems – an increase of 16 per cent over the last four years – and that’s expected to grow to 250,000 by 2020.

The OBI is a provincially funded research centre focused on improving the lives of those living with brain disorders.

Dr. Don Stuss, OBI president and scientific director, said in a statement the institute was created to foster collaborations “among Ontario’s leading researchers, clinicians, patient advocacy groups and industry partners.”

“Together these groups play a crucial role in translating high-quality research to real impact for patients, as well as increased economic prosperity,” he said.

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