Investments in Forest Industry Transformation

Frequently asked questions

What is the purpose of Investments in Forest Industry Transformation?

The purpose of the IFIT program is to demonstrate and deploy new advanced technologies in the forest sector through investments in new installations, thereby supporting forest industry transformation through a more diversified portfolio of products and markets.

Who is eligible for funding under Investments in Forest Industry Transformation?

Eligible recipients are companies that produce forest products (products made from/with wood fibre) and own at least one existing forest product manufacturing facility located in Canada (i.e. open or closed pulp, paper, panelboard or engineered wood products mills). An applicant’s main industrial activities should be covered under NAICS codes 321 (Wood Product Manufacturing) or 322 (Paper Manufacturing). Projects will need to meet all mandatory criteria in order to be considered for funding.

How will projects be selected?

The Second Call for Proposals is now open and will run until September 28, 2011. Successful projects will be identified through a competitive process which will assess the technical and business viability of the proposed project against mandatory and evaluation criteria. Please see the IFIT Program Guide for more information.

What funds are available through the Second Call for Proposals?

Approximately $65M will be allocated to successful projects from the second call for proposals. The funds will be divided between the large (>$2 million) and small (≤$2 million) funding envelopes as the program sees fit in order to ensure the greatest dispersal among the highest ranked projects.

What is the duration of the program?

Investments in Forest Industry Transformation will end on March 31, 2014.

What is the definition of “partner”?

IFIT accepts a variety of partnership arrangements, given that the primary applicant to the IFIT program meets the Mandatory Criteria as outlined in the IFIT Program Guide. A party with an interest or investment in the project that extends beyond the sale and purchase of technology or services could be considered a partner. This would include an organization that is providing funding to the project. As an example, a technology provider whose equipment is being purchased by a company for a project, but who is also providing in-kind services in order to help facilitate the project's success, could be considered a partner. As another example, a funding organization investing in the project would be considered a partner (this could include other government funding programs or other investors).

The presence and quality of partnerships is a rated program criteria, not a mandatory criteria. Therefore, a project does not have to demonstrate partnerships in order to be considered eligible for funding (please see section 3.2.1 in the IFIT Program Guide). However, partnerships are encouraged under the IFIT Program, particularly between forest products producers and non-traditional industry partners, and therefore a project will benefit from demonstrating partnerships through rated criteria #3 (section 3.2.2).

Is there a maximum or minimum IFIT contribution for proposed projects?

The program intends to fund a range of project types and sizes, paying up to 50% of an eligible project’s costs. The program will also give preference to projects demonstrating a high proportion of total project costs leveraged from project partners or other programs, and thus anticipates that industry, the private sector and other government partners would make project contributions as well. The maximum amount that can be paid to any recipient for a proposed project is $10 million. There is no minimum value for project proposals.

Are the funds in the form of grants or loans?

IFIT provides non-repayable contributions to projects that are selected for funding by the program. The IFIT Program Guide provides details on the reporting required by these contributions (section 4.6).

Can a project proposal “stack” funding received from other federal or provincial programs with the IFIT contribution?

Yes. However, the total Canadian government assistance (federal, provincial/territorial and municipal) cannot exceed 100% of the total project costs. Applicants must also ensure that their funding request to the IFIT program does not violate the stacking limits required by other funding organizations involved in the project.

What financial models for projects can be followed under the IFIT program?

Project proposals will be evaluated through a competitive process, and thus stronger and more risk-mitigated financial arrangements will be considered favourably in the assessment of the business model in the evaluation process.

Will the IFIT Program provide applicants with a preliminary opinion on project proposals, in advance of the IFIT review panel evaluation?

Information on project eligibility and the IFIT assessment criteria is available in the IFIT Program Guide. If applicants have specific questions regarding the program or require clarifications relating to eligibility, they are encouraged to contact the IFIT Program (by email). Due to the competitive nature of the program, IFIT will not provide preliminary opinions on individual project proposals. Projects, once received, will not be opened or reviewed until after September 28th (deadline for all 2nd call program applications).

What are the restrictions associated with the production of softwood lumber?

Costs associated with the production or export of softwood lumber products are not eligible under this program. If the products are not subject to Softwood Lumber Agreement restrictions, however, and the project proposal demonstrates that the funds will not be used for the production or export of softwood lumber, then the project may be considered eligible for funding under the IFIT program. As part of its evaluation process, IFIT will be conducting, with the assistance of the Department of Foreign Affairs and International Trade, a trade review to ensure compliance with all trade obligations, including the Softwood Lumber Agreement.

Will the projects that successfully apply to the IFIT program be publicly announced?

Yes. The IFIT program intends to directly notify all applicants of their status following the evaluation of applications. The successful projects selected for funding will be publicly announced after the signing of contribution agreements.

Do I have to use the BDC template for my business plan?

The BDC template is provided solely as a guideline for applicants needing more information on how to develop a business plan. As such, it is not required that applicants follow the BDC business plan template. For example, if you have an existing business plan for your project then you may wish to provide us with that instead of following the BDC template. In that case, please ensure that a complete and credible business plan is submitted including financial indicators, financial forecasting, ability to mitigate risk, knowledge and accessibility of the market, and the project team’s experience in completing projects on budget and schedule.

While project applications to the $2 million and under-funding bracket do not require a business plan, including one could strengthen an application.

Note that regardless of the requested funding amount, all project applications are required to include a completed Financial Analysis Template as part of their application package.

What are the program considerations regarding the fibre supply information requested in the application form?

The IFIT program’s interest pertaining to fibre supply is to ensure that fibre which is currently being used in a sustainable manner will not be displaced by a proposed project. Preference will be given to projects that consume fibre from currently underutilized sources and/or to existing applicants confirming that the project will not divert fibre from existing uses.

Who do I contact for more information?

Please contact ifit@nrcan.gc.ca.