Forest Sector Investment and Innovation Program — Business projects
ON, Canada
Financial assistance for forestry projects in Ontario
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Grant and Funding
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- Agriculture, forestry, fishing and hunting
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- Government of Ontario
- Ministry of Natural Resources and Forestry (ON)
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If you are a manufacturer or processor of wood or forest biomass, you could get a performance-based loan to cover up to 30% of eligible costs for projects that improve productivity and innovation.
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Yes, there are several projects and activities eligible for this grant.
Eligible activities include productivity improvements, technology upgrades, process innovations, and market expansion initiatives among others, all aiming at improving the competitiveness of Ontario’s forest sector.
- Project facility modifications/upgrades required for the project
- Purchase or upgrade of equipment and machinery
- Capital lease for new equipment
- Project-related computer hardware and software
- Materials used for prototypes and configuring/testing production processes
- One-time labour costs directly attributable to the project
- Market expansion activities such as certification and packaging redesign
- Travel expenses related to the project
- Legal and accounting fees for intellectual property protection and project-related development
grant_single|admissibleProjectsExample
$196,500
Calgary
Introducing automated processing in wood pellet production.
$318,000
Vancouver
Upgrading sawmill equipment and increasing production efficiency.
$75,000
Toronto
Implementing new software to manage wood inventory efficiently.
$54,000
Montreal
Developing an eco-friendly packaging solution for wood products.
$135,000
Ottawa
Research and development of a new sustainable wood treatment process.
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Eligible applicants are various types of forestry and wood products corporations, educational institutions, and not-for-profit organizations directly related to Ontario’s forest industry. Projects must meet specific objectives and demonstrate a positive impact on the forest sector and regional economies.
- Ontario forest and wood products corporations
- Extra-provincial forest and wood products corporations
- Federal forest and wood products corporations
- Foreign forest and wood products corporations, provided they have incorporated a Canadian/Ontario subsidiary
- Forestry-related not-for-profit corporations
- Ontario-based post-secondary education institutions
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Yes, the following types of companies are eligible to apply for the Forest Sector Investment and Innovation Program (FSIIP) grant, provided they meet specific criteria and objectives of the program. These entities range from Ontario-based companies to foreign corporations that have established a subsidiary in Ontario.
- Ontario forest and wood products corporations
- Extra-provincial forest and wood products corporations
- Federal forest and wood products corporations
- Foreign forest and wood products corporations (with a Canadian/Ontario subsidiary)
- Forestry-related not-for-profit corporations
- Ontario-based post-secondary education institutions
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Harvesting and hauling companies/projects are not eligible under the business projects stream of the Forest Sector Investment and Innovation Program (FSIIP).
- Harvesting companies
- Hauling companies
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Eligible costs must be directly attributable to the project and incurred after the effective date of the funding agreement, including one-time costs for development and implementation. Ongoing operational costs, production costs, and many other general expenditures are not eligible.
- Project facility modifications/upgrades
- Equipment and machinery
- Capital lease (non-interest portions)
- Computer hardware/software/electronics
- Materials for project-specific purposes
- One-time labour costs directly attributable to project implementation
- Research and development costs
- Training costs directly attributable to the project
- Market expansion related expenses
- Project-related travel expenses
- Legal and accounting fees directly related to the project
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The eligible geographic zones for this grant are locations within Ontario, Canada.
- Ontario-based locations or facilities
- Ontario-based post-secondary education institutions
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Yes, there are evaluation and selection criteria for this grant. Projects will be evaluated based on their outcomes, alignment with sector priorities, regional and net economic impact, incrementality, return on investment, and due diligence assessments.
- Project outcomes: The proposal supports the goals of strengthening Ontario’s competitive advantage through productivity, innovation and/or market expansion whether domestic or global, and the number of new and/or retained jobs resulting from the project.
- Sector/cluster priorities and impacts: The proposal aligns with sector and cluster priorities and is of strategic importance to Ontario’s broader forest sector.
- Regional impact/net economic impact: The project positively impacts regional economies (directly and/or indirectly) and generates social and/or economic benefits beyond the immediate benefits to the applicant.
- Incrementality: Critical aspects of the proposed investment in the project will not happen without government support.
- Return on investment (business projects stream only): The government will achieve a net positive return on its investment.
- Due diligence: Comprehensive assessment of financial and technical risks, including external due diligence advisors for business projects and in-house or external assessments for collaboration projects.
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- Step 1: Register with TPON
- Step 2: Login to your TPON account and complete the Stage I eligibility checklist and application form
- Step 3: Wait for notification of Stage I approval (within 10 business days)
- Step 4: If approved, complete and submit a detailed Stage II application and supporting documentation within 15 business days
- Step 5: Undergo a comprehensive and in-depth evaluation including financial and technical due diligence and project risk assessment
- Step 6: Wait for the final decision and notification within 65 business days of Stage II application submission
- Step 7: If approved, enter into a funding agreement with the province outlining project commitments and clawback provisions
- Step 8: After execution of the funding agreement, provide evidence of eligible project costs incurred and paid for, to receive disbursements
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Approved projects will be the subject of public announcements and recipients must comply with various compliance assessments and potential clawback provisions if commitments are not met.
- Confidential information should be clearly marked, and the province will notify applicants before granting access to potentially sensitive records.
- Project descriptions, investment commitments, and amounts of government support must be publicly reported annually, including achieved results.
- Compliance checks will be conducted with various ministries, including Labour, Environment, Accessibility, Finance, and Municipal Affairs.
- Funding agreements will include performance measures and reporting requirements, potential clawbacks, and conditions to maintain Ontario's job and facility footprints.
- Disbursements are generally made in arrears with potential initial payments upon fulfillment of disbursement conditions.
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FSIIP@ontario.ca
1-844-573-9017
Apply to this program
Forest Sector Investment and Innovation Program (FSIIP)
The Forest Sector Investment and Innovation Program (FSIIP) provides financial support to Ontario forest and wood product companies to improve productivity, foster innovation, expand markets, and support regional economic development. Eligible projects must meet the program's objectives and require government assistance to be implemented.
Detailed Explanation of the Forest Sector Investment and Innovation Program (FSIIP)
The Forest Sector Investment and Innovation Program (FSIIP) is a funding initiative by the Government of Ontario designed to enhance the competitive advantage of Ontario’s forest and wood products sector. It focuses on encouraging businesses to make strategic investments and fostering collaboration that can lead to significant economic growth and innovation across the province.
Program Objectives and Benefits
The primary objective of FSIIP is to support Ontario’s forest sector businesses by providing financial assistance for projects that will improve productivity, drive innovation, expand markets, and strengthen regional economies. This program is instrumental in building Ontario’s productive and innovative capacity, which is vital for creating jobs and fostering economic resilience. The key principles and desired outcomes of the program include:
- Productivity: Enhancing a highly-skilled workforce, increasing industrial efficiency, technological development, and product innovation.
- Innovation: Building research and development (R&D) and commercialization capabilities, fostering collaboration between partners, and embedding innovation into the business climate.
- Market Expansion: Strengthening the ability to compete in world markets, fostering domestic, international, and interprovincial trade.
- Regional Impact: Positively impacting the regional economies where the businesses are located, especially in regions experiencing economic disparities.
- Sectoral Importance: Benefitting Ontario’s broader forest sector by addressing its needs and priorities.
Eligibility Criteria
Eligible applicants for the FSIIP include a wide range of entities primarily focused on forest and wood product manufacturing and processing. These include:
- Ontario forest and wood products corporations
- Extra-provincial, federal, and foreign forest and wood products corporations (provided they have an incorporated Canadian/Ontario subsidiary)
- Forestry-related not-for-profit corporations
- Ontario-based post-secondary education institutions
Start-ups and newly formed companies might also be eligible, subject to a case-by-case evaluation based on their operational and financial capacity.
Types of Projects Supported
The FSIIP has two main streams: Business Projects and Collaboration Projects.
Business Projects
Business projects cover capital investment initiatives by for-profit forestry companies. These projects aim to improve competitiveness through productivity enhancements, technological advancements, process or product innovation, and market expansion. The minimum eligible project costs for this stream are $3 million.
Eligible entities in this stream include sawmills, pulp and paper mills, secondary wood manufacturers, and bio-product manufacturers. However, projects related to harvesting and hauling are explicitly excluded.
Collaboration Projects
Collaboration Projects require the involvement of at least three project partners, including one Ontario-based for-profit forestry and wood products company. These projects must have a transformative impact across Ontario’s forest and wood products sector with a minimum eligible project cost of $3 million. The focus is on implementing industry-leading innovations, developing new products or processes, and fostering broad benefits across the economic landscape.
Eligible project partners can include not-for-profits, industry associations, research institutions, and educational institutions. One partner must be designated as the applicant responsible for coordinating and administering the FSIIP application.
Funding Details
FSIIP offers different types and amounts of funding based on the project stream:
Business Projects
Applicants in the business projects stream can apply for either a loan or a grant (not both):
- Performance-based Loans: Up to 30% of eligible project costs, with a forgivable portion (if targets are met) up to 50% of the loan amount.
- Grants: Up to 15% of eligible project costs in exceptional circumstances of strategic importance to Ontario.
Collaboration Projects
Grants covering up to 30% of eligible project costs to a maximum of $3 million are available. Funding from municipal, provincial, and federal sources is allowed, provided the total governmental funding does not exceed 75% of the eligible project costs.
Application Process
The FSIIP follows a competitive rounds-based process with four deadlines per year. Applications include a two-stage evaluation process:
Stage I - Preliminary Assessment
Interested applicants must complete an eligibility checklist and application form, providing an overview of the project and confirmation of eligibility. Projects are assessed based on their alignment with FSIIP objectives and eligibility criteria. Applicants will be notified within 10 business days whether they move to Stage II.
Stage II - Project Evaluation
Selected applicants from Stage I are required to submit a detailed application along with supporting documentation. This stage involves a comprehensive evaluation of the project’s impact on the applicant’s operations, regional economies, and Ontario’s broader forest sector. Financial and technical due diligence, along with risk assessments, are also conducted. Applicants are notified of the funding decision within 65 business days of submission to Stage II.
Eligible Project Costs
Eligible costs for FSIIP funding are directly attributable to the project, incurred and paid after the project start date, and subject to verification. Eligible cost categories include:
- Project facility modifications/upgrades
- Equipment and machinery purchases/upgrades
- Capital leases for new equipment
- Project-related computer hardware/software
- Materials for prototypes, testing, and training
- One-time labour costs for project implementation
- Research and development costs
- Project-related training expenses
- Market expansion-related expenditures
- Travel and legal/accounting fees under specific conditions
Ineligible Project Costs
The FSIIP explicitly does not cover ongoing production or operational costs, rental costs for equipment, general working capital, purchase of land/buildings, and several other categories outlined in the program guidelines.
Performance Measures and Compliance
FSIIP funding agreements require recipients to commit to specific investment, job, and payroll targets, which will be monitored through mandatory performance measures such as gross margin, total sales revenue, total export sales, and active employees. The program also includes specific wood utilization performance measures to track improvements in the yield and recovery of wood/wood fibre used in production.
Compliance with various Ministry regulations, the Accessibility for Ontarians with Disabilities Act (AODA), and tax obligations is mandatory for all applicants.
Conclusion
The Forest Sector Investment and Innovation Program (FSIIP) is a vital initiative for supporting the growth, innovation, and global competitiveness of Ontario’s forest industry. By providing substantial financial backing for transformative projects, FSIIP aims to strengthen regional economies, create and retain jobs, and drive Ontario’s forest sector towards a more sustainable and prosperous future.
