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Canadian Private Financing and M&A News Roundup – Week of Aug. 25

  • BioTech
    • Milton, ON’s Tribute Pharmaceuticals Inc. raised $27.9M post-IPO. The company’s primary focus on the acquisition, licensing, development and promotion of healthcare products in Canada.
    • Toronto’s Xagenic Inc. raised $5.1M in a series B round. The company has developed an easy-to-use, lab-free molecular diagnostic platform that delivers results in 20 minutes.
    • Markham’s GeneNews Ltd. raised $6.7M post-IPO. The company specializes in the commercialization of molecular diagnostics for the early detection of cancer and chronic disease.
    • Calgary’s Resverlogix Corp. raised $30M in debt financing through a Citibank loan. The clinical stage cardiovascular company offers an epigenetic platform technology that modulates protein production.
    • Markham’s Nightingale Informatix Corp. raised $3.5M from Beedie Capital Partners. The company is a cloud-based electronic health record and practice management software provider.
  • Cleantech
    • Oakville’s Smart Energy Instruments closed a $5M Series A round led by Venturelink Funds, The Ontario Capital Growth, ArcTern Ventures, and 3M New Ventures. The company develops game-changing ubiquitous measurement technologies for the burgeoning “Smart Grid” to address.
  • Natural Resources
    • Avrupa Minerals Ltd. closed financing of $1.1M through strategic investors.
  • Tech
    • Toronto’s Smart Energy Instruments raised $5.6M in a round led by  3M New Ventures, along with Venturelink Funds, ArcTern Ventures (formerly MaRS Cleantech Fund) and the Ontario Capital Growth Corporation. The company develops electronic chipsets with high-precision, real-time monitoring capabilities for smart grid applications in the electric utility industry.

Five new commercialization centres receive $68M in funding

Five new commercialization centres will share $68.1 million in funding over the next five years to help bring health and communications products and technologies to market faster, the federal government announced Monday.

The funding is the result of the most recent competition under the Centres of Excellence for Commercialization and Research (CECR) program, administered by the Natural Sciences and Engineering Research Council (NSERC). The program matches research clusters with industry to support the development and commercialization of new products and technologies that are high-risk and less likely to attract private sector financing.

The recipients include:

  • The Accel-Rx Health Sciences Accelerator in Vancouver, which receives $14.5 million to support companies in the health sciences research sector,
  • The Centre for Commercialization of Antibodies and Biologics in Toronto, which receives $15 million to support the development and commercialization of antibody and other medical products from biological sources,
  • The Centre of Excellence in Next Generation Networks in Ottawa, which receives $11.7 million to support the development of cloud-based services in strategic areas such as healthcare, energy, education, financial services and the environment,
  • The Medical Devices Commercialization Centre in Ottawa, which receives $14.9 million to support development and commercialization of medical devices, and
  • NEOMED in Montreal, which receives $12 million to support the life sciences and pharmaceutical sector.

The CECR program currently funds 22 centres which provide services to the information and communications technology (ICT), health, natural resources, and energy sectors.

Commercialization centres and companies seeking access to their services are invited to register and create a profile on The Funding Portal’s new MyFundCardTM network, which facilitates matches between these two groups, as well as private-sector sources of capital and investment, public-sector sources of funding, and dealers and experts who help companies secure financing. Register today.

FundingAwards – Who got Funded – Week of Aug. 18

Overall Disbursements:  Funding from federal and provincial governments grows to $114.1M this week, compared to $73M last week.

Top Sector: Arts, Culture & Community is the top sector this week, attracting $43.5M, 38% of the total amount disbursed.

Top Region: Manitoba is the top province this week, attracting 32% of the total amount disbursed.

Top Recipients in Ontario: 

  • Industry: Communications and Power Industries Canada Inc. receives $3.3 million from the Canadian Space Agency to develop the Extended Interaction Klystron (EIK), a satellite radar component that will generate pulses used to gather surface information.
  • Hospitals, Universities, Research Centres & Industry Associations: Researchers at Lambton College receive $505,000 from the federal College and Community Innovation Program to expand their development and testing of next-generation batteries in partnership with business.
  • Charities, Non-Profits & Public Sector: The Regional Municipality of Peel receives $4.6 million in federal funding over five years to support its Housing First project, a proven, evidence-based approach to end homelessness.

Funding Disbursed by Industry Sector:

sectors (2)

Funding Disbursed by Province:

pros

Active Funding Programs this Week:

  • Building Communities Through Arts & Heritage
  • Business Development Program
  • Canada Arts Presentation Fund
  • Canadian Initiative for the Economic Diversification of Communities Reliant on Chrysotile
  • Celebration & Commemoration Program
  • College & Community Innovation Program
  • Community Infrastructure Improvement Fund (CIIF)
  • Crime Prevention Action Fund
  • Hosting Program
  • Housing First
  • Industrial Research Assistance Program (NRC-IRAP)
  • Museums Assistance Program
  • Official Languages Support Programs/Building Communities Through Arts & Heritage/Canada Arts Presentation Fund
  • Opportunities Fund for Persons with Disabilities
  • Partner 4 Growth
  • Programme d’aide à la diffusion en variétés
  • Quebec Economic Development Program
  • Small Craft Harbours
  • Sport Support Program
  • Strategic Investment Funds
  • Vanier Canada Graduate Scholarships/Banting Postdoctoral Fellowships
  • Youth Take Charge

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

FundingSources – Must Reads

This week’s Must Reads from Funding Agencies and Industry Associations

  • BDC: BDC published a free ebook on how to manage your cash flow.
  • CME: FedNor has announced $2.4 Million in funding including $1,098,951 to Canadian Manufacturers & Exporters to undertake activities to assist Northern Ontario manufacturers to improve their productivity and competitiveness. Through CME, manufacturers can receive up to $15,000 to conduct assessments related to productivity, quality, lean manufacturing, information systems, human resources, management systems, and market analysis.
  • Finance Canada: Minister of State (Finance) Kevin Sorenson and Costas Menegakis, Member of Parliament for Richmond Hill, met with business leaders in Richmond Hill, Ontario, to discuss ways the Government and businesses can work together to build a stronger economy.
  • University of Ottawa: The Government of Canada has chosen Ottawa to become the country’s leading authority in medical devices commercialization with the announcement of a $14.9 million investment in the Medical Devices Commercialization Centre (MDCC). This new Centre stems from the University of Ottawa’s Medical Devices Innovation Institute and, in the initial phase, will be housed at the University of Ottawa Heart Institute. This funding was awarded in the latest Centres of Excellence for Commercialization and Research (CECR) Program competition.

QP Briefing: Dean: Strategic deals signal stronger government role in post-secondary sector

By Tony Dean

The provincial government’s Aug. 7 announcement that Strategic Mandate Agreements (SMAs) have been signed with all 45 publicly assisted colleges and universities is worth a closer look.

A government statement said the agreements “will help guide future growth by encouraging more focus on unique strengths, while avoiding or limiting expansion in academic areas where programs already exist.”

The goal was to ensure that the institutions are doing their best to connect students to experience-based learning through, for example, co-op programs, start-up incubators that foster entrepreneurship, and applied research. The institutions were also asked to show how they are contributing to job creation, innovation, and economic development, and collaborating with regional partners.

Another priority was a shift to a more evidence-based distribution of graduate spaces to reinforce distinctiveness.

The agreements are momentous in several respects. This sector has grown rapidly. Funding has increased by 80 per cent over the past 10 years, reaching $5 billion in 2014-15. While new spending has been associated with virtuous goals such as accessibility, affordability, better jobs and economic growth, it has not been accompanied by the rigorous government stewardship, strategic oversight, and metrics necessary to maximize quality and efficiency in the system.

The SMA’s were designed to shift the government from funder to a steward of a system that is now in some cases comprised of “silos of excellence.”

Why hasn’t this happened before now? It is partly explained by a historical focus on inputs such as student enrolment and money spent as opposed to clearly defined outcomes such as the quality of education and preparing students for jobs.

There will also have been some resistance to additional accountability requirements on the part of some colleges and universities under the shield of autonomy, or the more straightforward argument that the status quo worked for them.

Don Drummond’s 2012 report on public service reform was blunt in outlining the benefits of multi-year Strategic Mandate Agreements. He said differentiation has the potential to reduce inefficiencies and realize cost savings by minimizing further duplication of programs. He recommended that agreements be established and implemented by 2014 – so chalk-up another one on the Drummond scorecard for the Wynne government.

Also in 2012, the Ministry of Training, Colleges and Universities (TCU) asked colleges and universities to submit SMAs. The results of this first crack at defining unique college and university strengths were apparently a little too generic.

TCU asked the Higher Education Quality Council of Ontario (HEQCO) to convene a panel of senior educators who produced a report in 2013 supporting less duplication and more specialization.

Against that backdrop Brad Duguid, then minister of TCU, and deputy ministerDeb Newman, decided on face-to-face talks between ministry representatives and each institution on mandate agreements.

Newman added some heft to the team by drafting in Francophone Affairs DM (and former Council of Universities CEO) Paul Genest as a special adviser and, the now retired, former Education DM Sue Herbert.

Duguid trusted the ministry team to get the job done, but was insistent throughout that encouraging universities, in particular, to make specific commitments to promote job growth, innovation and economic development was a top priority. This helped government negotiators persuade juggernauts such as the University of Toronto to be more specific about how it would measure its contribution to the broader economy.

In U of T’s case Duguid also wanted to get this done in a way that protected, if not improved, the university’s ranking as one of the top twenty in the world.

In a notoriously hard-to-influence sector, it would not have been lost on others that the government’s first breakthrough agreement was reached with U of T.

In essence, the agreements were the result of a conscious effort by the government to ensure that future growth of the post-secondary system is guided by provincial priorities, including sustainability and quality. This has had an impact inside government as well. A 2013 TCU “Differentiation Policy Framework” released just prior to SMA negotiations brought these policy priorities together in a holistic way for ministry managers and staff for the first time.

Putting a single lens on several policy initiatives previously spread across the ministry requires an all-hands-on-deck approach, which in this case was managed by a cross-ministry team. This worked well internally and also provided colleges and universities with a single-window into key ministry programs – something they would probably like to keep.

Additionally, the requirement for institutions to provide metrics and evidence to demonstrate their impact in key areas, and the use of more evidence in determining the distribution of graduate spaces, required the ministry to think more seriously about which outcomes should be measured, and how.

A lot of attention was focused on graduate studies and research. A “Priorities Envelope” of new graduate spaces was deployed to reinforce specific strengths at institutions, such that even a smaller institution like Nipissing benefited by gaining a number of doctoral spaces for its well-regarded Teacher Education program.

At the same time TCU made some tough decisions to reset existing allocations, with some institutions losing unused spaces while other institutions received higher allocations to reflect enrolment levels already realised. In other areas institutions were given greater flexibility to reallocate funding/spaces such as converting Doctoral spaces to Masters slots.

These agreements will provide a foundation for further reinforcement of differentiation through reform of funding formulas and in addressing risks to financial sustainability.
A big test for the government as steward of the system will come when the results are tallied down the road and some institutions inevitably fall short in delivering on their commitments. Observers both inside and outside of the sector will watch the government’s reactions very closely.

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