SDTC - Start-up Funding

Sustainable Development Technology Canada (SDTC) provides non-repayable contributions to Canadian-owned companies developing innovative technologies with significant and scalable environmental benefits. The funding supports projects from the development stage to the doorstep of commercialization, helping companies bring sustainable solutions to market.

Sustainable Development Technology Canada (SDTC) plays a pivotal role in fostering the advancement and commercialization of innovative, sustainable technologies across Canada. By supporting projects that have the potential to deliver significant environmental benefits, SDTC aims to drive the growth of a greener economy and position Canada as a leader in sustainable innovation. This comprehensive guide will detail the various aspects of SDTC funding, including eligibility requirements, application processes, the types of projects funded, and the benefits of obtaining SDTC support.

To qualify for SDTC funding, companies must meet several key criteria. Firstly, the company must be Canadian-owned, ensuring that the benefits of the funding are retained within the national economy. Furthermore, the project in question must be poised to advance the innovation along the commercialization pathway. This underscores the importance of the technology being beyond the proof-of-concept stage but not yet fully commercialized. A significant aspect of SDTC's funding considerations is the environmental impact of the proposed innovation. The technology must deliver quantifiable, substantial, and scalable environmental benefits. Whether it aims to reduce greenhouse gas emissions, minimize water consumption, or lessen air, soil, or water contamination, the project must contribute positively to the environment. Additionally, the innovation must present a robust end-user value proposition and demonstrate a clear market need, validated by a commercialization partner.

SDTC funding is designed to cater to companies at different stages of growth. For start-ups, the focus is on technologies that have been proven on a small scale, offering support to further develop and validate these innovations. Scale-up funding targets more advanced, high-growth companies looking to test the viability of their business models, strengthen their competitive edge, or expand their customer base.

Start-up funding is geared towards companies that have already demonstrated the feasibility of their technology on a small scale. These companies receive support to further develop and validate their innovations, assisting them in reaching the next stage of growth and market readiness.

For scale-up companies, the funding focuses on advanced projects with higher growth potential. These companies work closely with customers to test the viability and scalability of their technologies. This phase is crucial for companies aiming to strengthen their competitive advantage or unlock a larger customer base.

SDTC funds a broad scope of projects centered on sustainable technology development and demonstration. The technology must be beyond the proof-of-concept stage but pre-commercial, demonstrating potential for significant environmental benefits. Projects typically involve further development, technology risk mitigation, and validation of economic viability. Eligible projects might focus on reducing greenhouse gas emissions, conserving water resources, or reducing contamination in air, soil, or water. The primary objective is to support technologies that offer substantial and measurable environmental improvements.

Certain types of funding requests are not considered by SDTC. For instance, the organization does not fund projects submitted by non-Canadian companies or those delivering only economic benefits without substantial environmental impact. Research projects, commercial deployment of already commercialized technologies (like solar or wind farms), and incremental modifications to existing technologies are also excluded. Additionally, funding requests from majority-owned Canadian subsidiaries of foreign multinational enterprises are not considered.

The application process for SDTC funding is designed to be client-centric and straightforward, acknowledging the busy schedules of entrepreneurs. It involves a multi-step process with checkpoints and coaching to ensure the application's viability at every stage.

Prospective applicants must first review SDTC’s eligibility, cost criteria, and evaluation criteria to determine if their project aligns with SDTC’s objectives. Once confirmed, applicants can download the application template and submit it via the SDTC application portal. An initial review by SDTC experts will determine if the project meets the eligibility criteria, followed by a video conference presentation if applicable.

If the initial application is promising, applicants will be invited to submit a detailed proposal via the online portal. SDTC staff will conduct a due diligence visit to the project site, and the Project Review Committee will evaluate the project. Recommended projects will then be presented to the SDTC Board of Directors for approval.

Once approved, SDTC will collaborate with the applicant to prepare a Contribution Agreement (contract) to advance the project. The disbursement of funds follows a milestone-based approach, ensuring the project’s progress aligns with the agreed deliverables and success metrics.

SDTC's contribution agreements include clearly defined milestones, representing specific time periods with identified deliverables and success metrics. Upon executing the Contribution Agreement, SDTC advances its portion of the first milestone budget, less a standard 10% holdback. Subsequent disbursements occur upon successful completion and reporting of each milestone.

During the project's duration, the project team must report progress against predefined technical deliverables and metrics, along with detailed project expenses. Additional reporting includes an Environmental Benefits Baseline Report at the end of the first milestone, followed by a Final Report, Marketing and Commercialization Report, and Environmental Benefits Final Report upon project completion.

For five years following the project's completion, SDTC requires recipients to complete an annual questionnaire. This allows SDTC to track the technology's market progress, including sales, revenues, and job creation. Moreover, recipients must acknowledge SDTC funding in all related press releases and public statements.

SDTC funds typically cover an average of 33% of eligible project costs, with average contributions ranging from $2 million to $4 million, disbursed over the project's life of up to five years. However, projects must secure a private-sector contribution of at least 25% of eligible project costs, and overall government funding must not exceed 75% of eligible project costs. Furthermore, at least 50% of the project's costs must be incurred within Canada. Applicants are encouraged to seek additional funding from other government programs, provided the total government funding does not exceed the 75% threshold mentioned earlier. This flexibility enables businesses to maximize their resources and pursue comprehensive development strategies.

While consultants can support the application process, SDTC policy prohibits applications involving contingency fees based on the degree of success in securing funding. This ensures a fair and transparent process for all applicants and maintains the integrity of the funding program.

SDTC funding offers a valuable opportunity for Canadian-owned companies to advance their sustainable technologies and bring innovative solutions to market. By meeting the defined eligibility requirements and navigating the comprehensive application process, businesses can secure the financial support needed to develop and commercialize their environmentally beneficial technologies. This funding not only aids individual companies but also contributes to Canada's broader goal of fostering a sustainable and greener economy.