Aerospace Regional Recovery Initiative (ARRI) in the Prairie provinces

The stronger you are, the better Canada is. Let’s build a stronger Prairies economy together!

Here is what we can do to help:

• We invest in your projects that create a stronger, inclusive economy in the Prairies. 
• We connect you with other key players to create mutually beneficial business relationships.
• We can help pathfind your project to other sources of funding and expertise to help grow your business and get your products or services to market.

Are you an organization in the aerospace sector that is exploring opportunities to expand? To improve your productivity, green operations, strengthen supply chains or train more people for the aerospace sector? Are you all about inclusivity and building a stronger Canada? Do you need more resources to accelerate your growth goals?

The Aerospace Regional Recovery Initiative (ARRI) will help the Canadian aerospace sector emerge from the pandemic with the capacity to compete on the global stage. The Initiative will support small and medium-sized enterprises (SMEs) in the following 3 objectives:

1. to green their operations and adopt environmentally sustainable practices
2. to improve productivity
3. to strengthen commercialization while furthering integration into regional and global supply chains

With a total budget of $250 million over 3 years (until March 31, 2024), this initiative is being delivered by Canada's regional development agencies (RDAs). It complements support for the aerospace industry provided through Canada's COVID-19 Economic Response Plan and by Industry, Science and Economic Development (ISED) through the Strategic Innovation Fund.

Eligible applicants

Businesses operating in the aerospace industry, as well as the organizations that support them, are eligible to apply. This includes:

• SMEs
• not-for-profit organizations providing services to SMEs, including municipalities, post-secondary institutions, provinces and Indigenous organizations

Indigenous applicants

Indigenous businesses and organizations are invited to apply through the process described below. Under the initiative, Indigenous applicants may receive funding that exceeds the thresholds outlined in the Assistance available section below.

Assistance available

• Applications are eligible for a maximum of $10 million on any one project.
• Commercial projects may be eligible to receive up to 75% of eligible project costs. Eligible businesses can receive interest-free repayable loans. Repayment normally starts one year after the project is completed with 60 equal monthly payments. Early repayment is permissible.  
• Non-commercial projects are not repayable and may be eligible to receive up to 90% of eligible costs. 10% of costs must be from non-government sources.
• Applicants will be required to disclose all sources of funding with their completed application.
• Costs may be eligible on a retroactive basis up to 12 months prior to the receipt of a project application.

Eligible activities

The following are examples of activities for each objective that will be supported by the initiative:

1. the transition towards greener products and operations or environmentally sustainable practices, such as adoption and commercialization of clean tech products and services or electrification to support a lower carbon footprint
2. the improvement of productivity, such as advanced manufacturing and Industry 4.0, scale-up of high potential firms, artificial intelligence and cybersecurity or workforce and skills development
3. the commercialization of innovative products and services
4. the integration of new start-ups and new technologies in key aspects of the value chain
5. targeted support for specific groups in the economy, including women, Indigenous peoples, youth, and visible minorities, to promote a greater level of inclusion by addressing  barriers
6. workforce development to help SMEs address labour and skills shortages (e.g., indirect support via not-for-profits offering business counselling/support services or directly to SMEs for training, upskilling or hiring activities) in respect of regional and provincial jurisdictions
7. technical assistance for the adoption of technologies and management efficient practices best adapted to a SME’s specific needs
8. capital investments up to $10 million to bridge the gap with ISED’s Strategic Infrastructure Fund (SIF), and support more transformational projects and high profile emerging and expanding SMEs in the pre-SIF phase
9. strategic application of procurement tools, such as Industrial and Technological Benefits Policy, to leverage support to SMEs and new technologies

Priority will be given to projects that contribute to at least one of the following:

• transitioning towards greener products and operations or environmentally sustainable practices
• generating important economic benefits and promoting business development in regions, while improving resilience and international competitiveness of the aerospace sector
• improving diversity and inclusion to address barriers faced by certain groups
• supporting digital adoption by the aerospace industry and enhanced cybersecurity

Eligible costs

Costs must be incremental and essential to the project. Examples include:

• capital costs (equipment, machinery)
• labour (wages and benefits)
• marketing
• costs related to intellectual property
• technology development and commercial demonstrations
• professional, advisory and technical services

Ineligible costs

These are costs that are deemed unreasonable, non-incremental and/or not directly related to project activities. For example:

• basic and applied R&D (Technology readiness level 1-6)
• land and buildings
• salary bonuses and dividend payments
• entertainment expenses
• refinancing of existing debt
• amortization or depreciation of assets
• lobbying activities
• donations, dues and membership fees
• goodwill
• the purchase of any assets for more than fair market value
• any cost deemed unreasonable, non-incremental or not directly related to project activities

Assessment process

Applications will be evaluated on their ability to achieve the program objectives and on their relative strengths. Only the strongest applications will be funded.

The evaluation considers the following areas:

• alignment with the objectives of the program
• the eligibility of the applicant, project activities and project costs
• clear, measurable economic benefits that are a direct result of the project (for example, revenues or the number of jobs created relative to the funding request)
• strength of the management of the applicant
• financial capacity of the applicant to complete the project
• for corporate projects, the company’s financial strength and ability to repay based on historical financial reporting and logical projections
• leveraging from other funders
• strong market demand for the product or service
• technology readiness

Confirmation of funding

Applicants must provide confirmation of the balance of funding at the time of application.

Examples of confirmed funding include:

• current bank statements detailing the existing cash balances or the unused portion of lines of credit
• official letter from a third party confirming funding
• funding agreements
• signed term sheets

The following will not be accepted as confirmed funding:

• forecasted revenues from future activities
• accounts receivable
• commitments to raise equity or to obtain future bank financing
• Scientific Research & Experimental Development (SR&ED) credit receivables

Submitting an application

Canada's regional development agencies are now accepting applications on an ongoing basis until funding is fully committed. For more information on this initiative, please contact us at 1-888-338-9378.