Forest Sector Investment and Innovation Program (FSIIP) – Business Projects

• during the repayment period, after the project completion date, interest will be charged at Ontario’s cost of borrowing plus 3%

2. Grants:

• up to a maximum of 15% of eligible project costs may be considered in exceptional circumstances at the sole discretion of the province for projects of strategic importance to the province

1. Projects receiving funding under other Ontario programs will not be eligible for funding under the business projects stream with the exception of programs that are meant to provide general benefit to a company and are not project-specific (such as Industrial Electricity Initiative, Northern Industrial Electricity Rate Program), and tax credits.
2. However, applicants will be permitted to stack federal and municipal funding with FSIIP funding, provided that total funding from all government sources does not exceed 50% of the eligible costs of the project.

In order to obtain funding, applicants that have been approved for funding will be required to enter into a funding agreement with the province. No payments will be made until the funding agreement has been signed and any conditions for disbursement have been fulfilled.

Disbursements may be made in arrears, unless an initial payment is approved, after applicants provide evidence showing eligible project costs that have been incurred and paid for. Disbursements will be paid in annual instalments which shall not exceed the annual cap for each fiscal year. The annual cap is the maximum disbursement for each fiscal year and is solely determined by the province, taking into consideration factors such as rate of investment and job creation.

For grants, a performance payment, generally 20% of the total funding, will not be disbursed until after the project has been completed in full.

Project facility modifications and upgrades required for the project:

Project facility construction, expansion, modification or upgrades that are directly attributable to and necessary for the project, subject to prior written approval by Ontario. These include:

1. project-related building construction, expansion, modification, and/or upgrades, subject to Ontario’s approval
2. installation of upgraded interior power lines/gas lines/special ventilation required for new project-related equipment or processes
3. project related leasehold improvements

Eligible costs may only be included in this category after review and approval by Ontario.

Eligible cost categories

The following cost categories are considered eligible.

Project facility modifications/upgrades required for the project:

Project facility modifications/upgrades that are directly attributable to and necessary for the project, subject to prior written approval by Ontario. These include:

1. project facility modifications/upgrades required for installation of project-related equipment, such as: reinforcement of an existing floor for installation of special equipment
2. installation of upgraded interior power lines/gas lines/special ventilation required for new project-related equipment or processes
3. project related leasehold improvements

Eligible costs may only be included in this category after review and approval by Ontario.

Equipment and machinery:

The purchase or upgrade of equipment and machinery required for the successful completion of the project is eligible. Eligible costs include the purchase price of new or used equipment and machinery and associated delivery and installation costs.

If existing equipment/machinery (purchased prior to the effective date) owned by the proponent or a related company is to be moved to a new location for use in the project, only the costs of moving and installation are eligible.

Furniture (such as desks, chairs, computer workstations) is eligible only for employees working directly on the project in the cases of greenfield/brownfield projects or facility expansions.

Capital lease:

If new equipment is acquired via capital lease (as a method of purchase-financing), the non-interest portions of the capital-lease are eligible. Interest costs are ineligible under any circumstances.

Computer hardware/software/electronics:

Project-related computer hardware and software are considered eligible. Specialized hardware and software that are directly related to the project can be eligible. Ontario will approve such expenses on a case by case basis.

1. Standard office hardware (such as laptops, desktops, telecommunications devices and related hardware) is eligible only for employees working directly on the project in the cases of greenfield/brownfield projects or facility expansions.
2. Standard office software (such as Microsoft Office, accounting software) is eligible only for employees working directly on the project in the cases of greenfield/brownfield projects or facility expansions.

Materials:

Costs of direct materials necessary for, and specifically identified and measured as having been used for, the completion of the project, including:

1. materials used for prototypes
2. materials used for configuring and testing production processes and systems
3. materials used for training employees
4. other materials directly related to the project as approved by Ontario

Labour (one-time):

One-time labour costs must be directly attributable to the development and implementation of the Project. This would include direct salaries, wages and benefits, paid by the proponent, for employees of the proponent implementing the Project and in proportion to the amount of time spent working on the Project.

To allow for new market access, project-related employees of the proponent that are located in new markets for the purpose of developing the market are considered one-time eligible costs.

Benefits mean employees’ regular entitlements for payroll-related benefits (CPP, EI, and employer health tax), medical and dental-related benefits, and an appropriate percentage to reflect the cost of sick leave, vacation, and statutory holidays. Ontario must approve any other benefits in writing.

The proponent is required to maintain timesheets or appropriate records for all employees working directly on the project to verify time spent on project work, to verify expenditures for audit purposes and categorize the types of labour as follows:

1. management
2. one-time labour directly associated with project implementation, (including staff time devoted to hiring new project-related jobs, project administration, project-related purchasing)
3. scientific, engineering and technical (including skilled trades)
4. quality testing
5. other categories as appropriate, with the prior written approval of Ontario

Bonuses that meet the following criteria are eligible:

1. non-discretionary (such as part of a compensation package that provides that a money payment at a pre-determined rate, related to explicit employee performance targets)
2. paid to non-executive employees

Specific examples of eligible one-time labour expenditures include labour for:

1. HR personnel hiring new project-related jobs
2. project-related time spent on purchasing
3. accounting and reporting related to the project
4. project-related research and development (include under research and development section below)

Research and development:

Costs incurred by the proponent for research and development, which are directly attributable to the project. This may include:

1. one-time labour costs directly attributable to the project for research, development, and design work. This could include costs associated with product/process modification. The project related technologies/results need to be defined, as well as the milestones, objectives, personnel requirements and timelines
2. consulting, scientific, engineering and design services for research and development conducted by firms/institutions (such as colleges and universities) at arm’s length to the proponent that are directly attributable to the project

Training

Training costs directly attributable to the Project. Training must take place in Ontario. Training that occurs outside Ontario may be approved on a case by case basis, such as training of representatives related to new market access.

Market expansion

Market expansion is defined as the development of new incremental sales where the proponent does not currently have material commercial sales/presence or for new products not previously produced by the company.

Project-related expenses that are directly attributable to market expansion are eligible, including:

1. market certification, testing and regulatory compliance