Canada launches $100m procurement scheme to back start-ups

20 December 2017

The Canadian federal government has launched a C$100m scheme dedicated to increasing purchases from start-ups. 

Innovative Solutions Canada was first announced in the government’s 2017 budget in March.

The programme is modelled on a similar scheme in the US, which sees federal agencies allocate 3.2% of their research and development budgets to supporting small businesses with their R&D.

In Canada the scheme will require 20 federal departments to set aside 1% of R&D budgets, amounting to $100m annually, for Canadian start-ups.

Navdeep Bains, minister of innovation, science and economic development, said the programme would fuel innovation and create middle-class jobs. 

“Our government’s new Innovative Solutions Canada programme is a big winner on several fronts,” he said. 

“We’re being proactive and transforming our challenges into opportunities; opportunities for innovation, economic growth and small business success that will result in a vibrant innovation economy and more middle-class jobs for Canadians.” 

Under the programme federal departments and agencies will ask small businesses to propose solutions to challenges. The government will then work with the winning business and act as its first customer to support them in getting ideas to market.

Ben Bergen, executive director of the Council of Canadian Innovators, said: “The current procurement process favours large, foreign incumbents and doesn’t foster an ecosystem where new entrants can become part of the procurement system.  

“Canadian investors are hopeful the new programme will level the playing field for small and medium-sized domestic firms and will help more businesses scale-up here in Canada and abroad, while helping our government solve its own challenges.” 

Current challenges open for small business solutions listed on the government’s website include 3D printing with metal powder, AI and big data for autonomous space systems and advanced coating for personal protective equipment. 

Bardish Chagger, minister of small business and tourism, said as the country’s biggest buyer of Canadian products, the government is perfectly placed to give innovative firms the opportunities they need to grow organically.

“We believe innovative Canadian small businesses are well-positioned to help the government solve some of its more persistent challenges,” he said. 

“Through Innovative Solutions Canada, we are asking entrepreneurs to develop new products and services that will help to solve these challenges, while also enabling these entrepreneurs as they work to expand to new markets and sell to new customers around the world.”

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