Innovation Superclusters Initiative: Letter of Intent Proposal Template (required) Lead applicant name: Agrium Inc.

Proposal Title: Smart Agri-Food Supercluster (SASC)

Instructions:

Please fill out this template as part of your Letter of Intent application to the Innovation Superclusters Initiative’s application process. See the Applicant Guide for further instructions on the required content of the proposal, as it is not detailed in this document. The Guide can be found at: https://www.canada.ca/en/innovation-science-economic-development/programs/small-business-financing-growth/innovation-superclusters/funding-superclusters.html Page limit: Proposal Section – maximum of 7,500 words / approximately 15 pages Section A: Maximum of 6 000 words / approximately 12 pages (current document) Section B: B1 only, maximum of 1,500 words / approximately 3 pages (current document) Page limit: Budget Section – 2 pages Section C (Budget): 3 tables (templates) + 500 words (current document) The proposal document cannot exceed 7,500 words / approximately 15 pages (excluding the Budget Section).

Completeness Checklist:

The following documents must be attached to the completed Innovation Superclusters Initiative Application Form in order to be assessed.

Completed proposal template, including budget pages (current document)

List of participating organizations (separate template)

Letter of commitment: one large firm (500+ employees)

Letter of commitment: one large firm (500+ employees)

Letter of commitment: one medium firm (100-499 employees)

Letter of commitment: one small firm (1-99 employees)

Letter of support: one academic or post-secondary institution

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 1 of 23

Section A: Impact and Strategic Importance: A1. Vision and mission for supercluster A1.1 Supercluster description and strategic need

Agri-food is a key contributing sector of the Canadian economy with the highest employment (2.3 million), responsible for 6.7% of our GDPi. Canada ranks 5th in the world for primary agriculture exports and 11th for agri-food exports, totalling $51.6Bii. (Figure 1.) Further, Canada is a trusted source of safe food with a significant resource base (arable land and water) and high productivity rates (e.g., crop yields, crop and livestock genetics). We have well-developed and well-regarded field and food safety systems and management practices, as well as research and development (R&D) and educational and knowledge leadership capacity. Canada is one of just five countries that will be a net food exporter in the years to comeiii. This is increasingly important as global demands for food are projected to grow 70% by 2050iv. Global surges in population and a mobile middle class in Asia are also driving explosive demand for higher-value food, especially proteins (vegetable and meat sources), amid global constraints in available land, water, energy, and carbon emissions. The 2017 Canadian Advisory Council on Economic Growth’s report “Unleashing the Growth Potential of Key Sectors” (the Barton Report) v ranked economic sectors by their potential to contribute to GDP growth, create resilient jobs, and respond to important global demand trends. It also remarked on notable but addressable barriers for projected growth. Barton identified agri-food as the sector with the most untapped potential to deliver positive impacts to Canada’s future economic prosperity. The Smart Agri-Food Supercluster (SASC) will galvanize the agri-food sector for growth by establishing an industry-driven Supercluster that will define, perform, and co-fund solution-driven research projects for agri-food production. SASC will seek digital and other emerging innovative solutions, either independently or in combination, to address economic, social, and environmental opportunities to cultivate Smart Agri-Food in Canada. SASC is a pan-Canadian consortium of producer groups, large and small companies, post-secondary institutions, and government agencies that are committed to a field-to-fork approach to innovation. We believe Canada’s agri-food is the best in the world. Our mission is to build on the quality, integrity, safety, and continuous innovation within Canadian agriculture and agri-food production continuum to drive transformative growth, diversification, and job creation in Canada’s agri-food industry. By coordinating the best people, resources, technologies, and infrastructure available, we will achieve our vision:

Canada: The preferred global supplier of sustainable high-quality safe food and nutrition. Addressing pinch-points for key agri-food sectors (crops, livestock, agri-food processing) will require approaches and diverse expertise ranging from: agronomy to genetics and genomics, engineering, soil science, remote sensing, breeding, data collection and distribution, best management practices, wireless technologies and communications, precision agriculture, artificial intelligence, traceability, machine learning, automation, and many other multidisciplinary fields. SASC’s strength is focusing on these opportunities and bringing stakeholders together to create solutions to transform the agri-food sector into a global leader,

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 2 of 23

“[SASC] investment…is expected to create new IP and over $1 billion in economic activity. [We] anticipate creating 75 direct new jobs and an additional 75 partner jobs.” ~Ron Osborne, Chief Strategy Officer, Farmers Edge Inc.

FarmersEdge is a Winnipeg-based world leader in digital agronomy and decision agriculture data management solutions.

building on regional strengths, enhance Canada’s global competitiveness, advance food manufacturing, increase production efficiency and productivity, and expand trade.

Arguably, many opportunities and approaches can achieve the transformational growth required to achieve Barton’s predicted $30B in economic activity by 2027; this is evidenced by the number of agri-food supercluster groups and their different approaches. The SASC approach is to link supply chains by building a data/information solution coupled with a digital backbone to develop new technologies and efficient practices that verifiably respond to economic, social, and environmental stewardship market demands. Connecting Canadian agri-food and digital clusters will accelerate innovation and transform the agri-food industry while building new markets for our digital multinational- and small-to-medium enterprise (MNE and SME) leaders and pioneers, resulting in new jobs and new companies. Increasingly, Canadian and global consumers are demanding foods that meet verifiable quality standards and are produced under ethical and environmental stewardship best practices. Sustainable growth cannot simply come from increasing the production of

commodities or more agri-food products; we must rethink the way that we produce and add value to food and ingredients. SASC is committed to building and strengthening Canada’s agri-food sector by supporting the development of globally applicable information tools to support sustainable intensification in Canada. SASC priorities will be guided by a “field systems approach” that identifies opportunities, challenges, and sustainability to unleash Canada’s agri-food economic potential. The Information Gap: Canadian agri-food faces a fundamental weakness: fragmentation and lack of connectivity. Canada is a world leader in production systems for both crops and livestock and value-added agri-food products. We are challenged by the fact that Canadian supply chain partners operate with relative independence, both domestically and globally, connected only by transactional relationships (e.g., quantity, price, delivery date). Consumer questions such as “How, who, or where is my food produced?” cannot be answered at the commercial scale. This is contrasted against the growing “local food movement” (non-GDP contributing, but still important) micro-economy, which encourages consumers to purchase directly from food producers with assured provenance. To translate this connectivity and information sharing to the commercial scale, which is crucial to develop step-wise advances in food production and verification, we must develop new technologies and robust digital tools to manage information from the farm gate to the food plate. Current crop and livestock digital products have varying levels of technology development, adoption, and value chain integration. Without improved information sharing, producers and processors cannot answer consumer verification questions, nor is the producer sufficiently informed of specific consumer demands or how well his/her production practices compare to benchmarks. This information gap is increasingly limiting and, if not addressed, Canadian agri-food products will not maintain competitive global positioning and demonstrate a Canadian quality guarantee. The Canadian agri-food industry needs new information and tools to maintain and enhance market access.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 3 of 23

SASC will focus on building a field systems approach linked by digital connectivity and quality verification platforms to address the emergence of informatics, connectivity, and traceability in both the crop and livestock agri-food sectors to advance new practices and report performance up and down the value chain relative to economic, social, and environmental outcomes. SASC will operate under the premise that every segment of the agri-food value chain, from inputs to primary production to the sale of finished products, faces a set of opportunities, external constraints, and pinch-points. This might include: data collection, equipment interfaces, connectivity, networks, sub-optimal nutrient use, the need for more efficient input-output ratios, food safety and quality factors, questions of sustainability, the need to automate, the availability and/or accessibility of data sets to achieve greater profitability, and market competitiveness. We believe a field systems approach, which reflects triple bottom line outcomes, will result in continuous improvements to production and enable partnerships that deliver innovative solutions to achieve growth in Canadian agri-food (Figure 2). The SASC approach begins with four pilot examples (digital backbone, crops, livestock, and food processing; discussed in detail in §1.2) focused on facilitating growth of the agri-food value chain: developing new markets, enhancing production practices, increasing farm and processor profitability, and creating jobs and growth. This will build unique Canadian capacity and expertise for digitally-enabled agri-food production, processing, and marketing that can be transferred globally. SASC’s coalition of agri-food and digital leaders will establish a hub at Olds and Calgary, AB that integrates both rural and urban perspectives, as well as nodes in other key Canadian agri-food cities for a pan-Canadian focus. This will mutually reinforce our agri-food strengths. The SASC approach was vetted through a series of cross-country interviews, focus groups, and discussion sessions where we engaged with over 50 stakeholders to identify the key challenges and barriers for smart agri-food. SASC strongly aligns with ISI objectives by linking Canada’s agricultural value chain clusters of expertise with our digital capabilities to generate solutions to enhance agri-food productivity, stewardship, connectivity, and value chain integration. As we increase leveraged business investments in R&D in this sector, we will see growth in cutting-edge research, technology adoption, and investments. Most importantly, Canada will be a world-class leader in Smart Agriculture and accelerate the transformational changes necessary to grow Canada’s global agri-food productivity and economic leadership. There is a strong recognition across the Canadian agri-food sector that collaboration is key. SASC will collaborate with all consortia that take a pan-Canadian, industry-led, systems-based approach to innovation in Canadian food and agriculture that is globally scalable. Towards this goal, SASC is exploring opportunities to build relationships with other agri-food innovation and digital ecosystems across the country. A pan-Canadian approach to innovation involving the entire agri-food value chain will secure Canada’s position as the trusted global leader in agri-food production and exports.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 4 of 23

A1.2: Supercluster Strategy To achieve our vision of “Canada as the preferred global supplier of sustainable high-quality safe food and nutrition”, the SASC strategy relies on building connectivity through a multi-stakeholder systems approach to empower productivity and traceability for crop, livestock, and food processing sectors via data/information solutions supported by a digital backbone. SASC will specifically address major opportunities (or constraints) in agri-food to build new or enhanced tools and technology to establish or augment verifiable quality management systems and align a wide range of genetic, agronomic, food safety, production and process, and other quality measures that respond to increasing demands for production, sustainability, quality, and ‘source’ requirements across the entire supply chain. “McDonald’s wants to trace the chain of custody from birth to burger. That’s important to us, and our consumers. However, we also want to return real value back to producers…[t]his flow of data up and down the value chain is really critical, and valuable to everyone who participates,” ~ Jeffrey Fitzpatrick-Stilwell, McDonald’s Senior Manager of Sustainability BIXSCo, an Alberta start-up, ran a pilot project for McDonald’s Verified Sustainable Beef. Their software tool BIXS tracked the chain of custody of 9,000 head of Canadian cattle from 200 producers. That’s equivalent to 2.4 million beef patties sold in McDonald’s Canadian restaurants.vi

The SASC entity will invest in three different types of portfolio projects: Strategic (10%), Enabling (50%), and Accelerator (40%). Strategic Projects will be SASC-driven and provide guidance specific to industry-wide opportunities (or constraints) facing stakeholders. Enabling Projects will focus on broad and enabling multi-stakeholder initiatives. Accelerator Projects will focus on developing SME-led solutions for producers or processors. A principal Strategic activity is a value chain mapping exercise to identify the informatics flows, opportunities, gaps, and pinch-points across the production processing market continuum for agriculture production and food processing industries. Clarification and prioritization of these will then set the focus for Requests for Proposals (RFPs). For example, there is currently a limited understanding of the data needs of various participants throughout the value chain and a lack of adoption due to cost and technological barriers. Without detailed data and digital platforms to enable information flow, we cannot offer “field to fork” quality guarantees for Canadian products. An exemplar Enabling project would the generation of common datasets such as field level maps or the ability to easily document and share field-level environmental farm practices from the farm to the processor/marketer. Accelerator projects would concentrate on advancing a single product, process, or service, e.g., modifying a product such as BIXS to address end user needs as identified via Strategic or Enabling projects. As SASC funding cannot benefit only one entity, Accelerator projects will require value chain partners. With a portfolio of project types and scopes, the value of projects may range from $20K-$20M and have completion timelines of months to years. Our focus will be on iterating quickly and moving the Canadian agri-food and smart ag digital industry forward to ensure that Canadian companies gain market position in the emerging global market and that Canadian agri-food benefits. Selection Criteria: With significant opportunities in the crop, livestock, and food processing sectors, we will focus projects on advancing the ISI theme criteria framework and eligible activities: building Canadian technology leadership, creating partnerships for scale, developing talent pools, increasing access to innovation, and creating Canadian global market advantage. These five ‘eligible activities’ (described as Themes of Activity in the Program Guide) will function as our framework for eligible activities and project selection weighting (see §C2).

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 5 of 23

SASC Driving Principles 1. Remove Pinch-Points. Identify opportunities and bring stakeholders together to advance solutions. 2. Shared Value Model. Adopt a systems based approach to allow for national and international scalability. 3. Industry-Led. Remain anchored by MNEs and SMEs, and supported by academic and public-sector leaders from agri-food and digital sectors. 4. Local and Global Benefits. Achieve economic impacts, as well as address environmental and social outcomes, e.g., empowering female entrepreneurs, validating GHG reductions, and bolstering public acceptance of agriculture practices. 5. Lasting Innovative Impact. Leverage other resources that support system implementation, to have a lasting impact beyond the five-year ISI program.

FarmersEdge and Agri-Trend have increased their staffing five-fold in the last 5-8 years to respond to demand for digital field and farm decision tools.

Ideally, projects will address a combination of criteria with the emphasis on science and technology leadership opportunities. SASC has already identified key technological and economic opportunities as ‘starting points’ for Enabling and Accelerator Projects within our themes. The strategic mapping activity will delve more deeply into value chain information flows to identify additional low-hanging opportunities for implementation and adoption. Governance is discussed in §A2.2. The Smart Agri-Food Supercluster will allow Canada’s agri-food sector to become a preferred supplier of sustainable, trusted, safe food and nutrition. Responding Agri-food’s digital adoption lags behind that of many other industry sectors. Should this not be addressed, the growth potential for Canada’s agri-food sector will be limited and, at best, Canada will remain a commodity supplier. The current SASC Steering Committee represents diverse agri-food value chain interests that reflect a cross-Canada and cross-sectoral approach. The initial pilots for SASC themes encompass the entire Canadian agri-food sector: 1. Enabling Data & Digital Backbone for Smart Agri-Food. Lead Members: MDA Corporation, Telus, City of Ottawa. This theme is fundamental to achieving transformational change in Canada’s agri-food sector. Canada has deep capacity and expertise in data management, satellite technology, machine learning, artificial intelligence, and wireless technologies. Partnership with the Ottawa ICT cluster (InvestOttawa, CENGN (Centre of Excellence in Next Generation Networks)) and other digital SMEs will create new jobs and products. An Enabling project is increasing narrow band wireless access and connectivity (Telus). Rural internet access is a real barrier to digital adoption at the producer level, as is the transferability of data between systems (data capture data modelling/processing discerning knowledge from the data outcomes). 2. Sustainable Stewardship in the Crop Industry. Lead Members: Agrium, Telus, Farmers

Edge, FarmLead, Agri-Trend. Numerous pinch-points in the crop supply chain represent opportunities for smart agri-food technologies and digital solutions. The primary driver for field system sustainability is profitability; producers will not adopt technologies without a positive economic outcome. An Enabling opportunity is building out key common datasets for Canadian producers, such as land maps, weather nodes, suitable genetics/decision tools, and improving sensors and networking to automate data collection to improve productivity and profitability. The systems approach will help build a more competitive and sustainable sector that is more profitable via reduced environmental costs and

increased production. It will also provide many linkages for the agri-food supply chain and across other allied sectors that require water, land, and bio-diversity resources. Finally, it will

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 6 of 23

Rapid growth in Asia’s middle class, particularly in China, is resulting in increased demand for high quality protein. The Chinese middle class is projected to soon exceed the population of the USA (>350M people). Chinese consumers do not trust domestic food; therefore, there is a significant opportunity to expand on the Verified Beef Production Plus (VSB+) brand.

enable the Canadian crop sector to move more crops and products into new markets and help address market access issues. 3. Building New Markets and Productivity for Canadian Livestock. Lead Members: Cargill Foods, BIXSCo, Canadian Cattlemen’s Association (representing Canadian beef farm businesses), AB Cattle Feeders Association, Canadian Roundtable for Sustainable Beef, Beef Cattle Research Council (BCRC). Transforming the Canadian agri-food sector from being just ‘another’ source of commodities on the world market to becoming the preferred and ‘first choice’ source of supply is no easy task. An Enabling project will focus on establishing a new market position for verified Canadian beef in Asia. The beef industry has invested sustained effort to build a sound environmental and social platform for the industry. With the right digital tools matched with consumer interest in high-quality beef products, Canadian producers will be able to access new markets. Cargill’s vision to work with supply chain partners brings together a convergence of interests and capabilities that is a first in the Canadian beef industry. This will stimulate significant growth within the Canadian beef industry. 4. Accelerating Advanced Food Manufacturing in Canada. Lead Members: Cargill Foods, Niagara College. Food and beverage processing is the largest manufacturing industry in Canada, but only consumes 50% of Canadian agricultural inputs. Any increase in value-added processing of agricultural commodities will boost Canada’s economy. In recent years, the food industry has been challenged by high transportation costs, fluctuating input costs, shortages of skilled labour, strong global competition, increasing energy costs, and a fluctuating Canadian-dollar exchange rate. SASC will enable the food processing industry by supporting the development of technologies and tools that respond to consumer demands for formal programs that focus on ethical treatment of animals, environmental sustainability, and healthier foods, and food safety processes. Genomics, metabolomics, and nanotechnology are emerging platform technologies in which Canada has considerable strength. These technologies can be applied to develop unique ingredients, foods, beverages, functional foods, and natural health products to give Canadian companies a competitive advantage in global markets. Links to Food Nexus Canada supercluster. Summary and Objectives: The SASC systems approach to transforming Canadian agri-food has the potential for significant and long-lasting impacts on the sector. The intersection of the agri-food and data/digital clusters of Canadian expertise will result in many innovative approaches and tangible economic outcomes. The goals or objectives for the Supercluster are to:

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 7 of 23

A2. Economic growth and industrial benefits A2.1: Ability to enhance competitiveness and productivity

Canada has an established reputation as a reliable supplier of agri-food products. With one out of every eight jobs linked to agri-food, ensuring the competitiveness and productivity of this sector is crucial to the Canadian economy and GDP growth. Agriculture and agri-food is a complex industry sector with many segments and sub-sectors; a primary challenge is the lack of connectivity between the producer and the final consumer. In a global marketplace, the means to connect supply chain partners and manage the links between them requires a systems approach. Consumers, retailers, processors, input suppliers, logistics, service providers, and producers each have specific information needs. Many companies are attempting to address the barriers of fragmentation and connectivity but have had limited success in large-scale technology adoption. From a producer perspective, the top five barriers to adopting ICT-enabled precision agriculture tools are price, internet speed/lack of cellular connectivity, lack of knowledgeable people, continuously evolving technology, or outdated farm equipmentvii. Many farmers are willing to adopt these technologies, and some have done so in the case of technology that provides a clear return on investment (ROI). Other technologies (such as those required for traceability) do not currently provide sufficient financial or regulatory incentives to warrant adoption. “Smart agriculture” or technology-enabled agriculture is poised to create a transformational shift in agri-food. The global market for smart agriculture technologies is projected to reach $14.5B+ by 2022viii. The key drivers for the development of these technologies are to improve the quality of food and increase the yield of farms in response to global food demands. Technology is also now more accessible due to the low cost of computing, increased capability to process ‘big data’, and other digital advances in monitoring, measuring, and digital decision-making tools. Shifts in producer demographics and farm sizes will catalyze demand for effective digital tools. On-Farm Innovation: Since the 1980s, Canadian producers have adopted zero- and reduced-till practices to reduce soil erosion and improve soil quality, but there are other benefits: direct seeding sequesters an estimated 0.38 tons of CO2 per acre per yearix. In certain regions and soil zones, producers can sell environmental goods (carbon offsets) by conservation cropping practices. Agri-food producers and processers are typically early adopters of technology especially when it presents a clear ROI. The lack of adoption and nationally scaled use of precision ag technology is likely due to the absence wireless connectivity and the difficulty in accessing value from big data.

The development of technologies that address Canadian production models can be transferred globally. Merging Canada’s technology leadership in agri-food with our digital and machine learning expertise and innovation is required to achieve the science and technology advances that will create transformational step changes in the agri-food sector and foster smart ag technology leadership in Canada. MNE partner MDA Corporation, a global communications and information company that provides space-based solutions for surveillance and intelligence gathering, sees the value in bringing stakeholders together. The ability to create collaborations between the data collectors (e.g., MDA), data users (producers/Ag input companies), and data miners (ICT/software) will result in smart products, processes, and services that produce meaningful impacts for the agri-food sector and build new market opportunities for our data and digital partners, both domestically and globally. Agrium is a Canadian MNE providing products, services, and solutions to help growers economically and sustainably increase crop yields through optimal application of crop nutrients. Agrium is committed to the United Nations (UN) Sustainable Development Goals (SDG) and US

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 8 of 23

Global Compact – the world’s largest corporate sustainability initiative. The Global 4R Nutrient Stewardship Framework is a science-based system for nutrient stewardship – applying the right source of nutrients at the right rate, right place, and right time – resulting in significantly reduced environmental impacts (e.g., leaching) from fertilizer use. It also reduces input costs and improves profitability. Agrium has invested considerable effort in mapping the field production system pinch-points for the 4R system. By developing technologies, best management practices and metrics that support producer implementation and verification of 4R, producers can reduce costs, increase yields, and boost their efficiency and competitiveness. Using digital-tools to verify high-quality production practices for Canadian beef will benefit Cargill Foods, an MNE livestock processor by allowing them to access new markets or increase share in markets such as China. This will also reduce the flow of live cattle currently being marketed to US processors and feedlotsx. Market growth will simultaneously increase the use of existing processing capacity and impact the livestock supply chain by increasing the use of feedlot capacity and encouraging cow-calf producers to grow production herds. BIXSCo, has established BIXS, their Beef InfoXchange System software tool, which is the emerging data backbone for Canada’s cattle and beef industry. By leveraging access to markets based on the implementation of this tool, and expanding and/or streamlining its utility through the system mapping activity, BIXS’ market penetration in Canada and beyond will increase. Tools to automate data entry will streamline opportunities for producers, and increasing data entry and BIXS shared data will create opportunities to unlock the potential for production practice improvement. This system-focused approach will result in the following triple bottom line outcomes:

By focusing on key outcomes and building the right technology, tools and software, smart agri-food will be able to demonstrate Verifiable Canadian Branding for Canada’s agri-food products, increasing their preferential global market opportunity. We envision a Canadian agri-food system with seamless data transfer and information sharing that provides Canadian and global consumers and retailers with confidence their food is produced in the most ethical, environmental, and economical ways possible. For producers, technology adoption will increase profitability, enhance time management, improve quality, reduce environmental impacts, and create new environmental goods and service, among other benefits. For processors, the ability to source high-quality verifiable raw material will create new processing opportunities and ensure Canada reaps the benefits of value-added agri-food production. The development of new hardware and software technologies and services to address the emerging smart agriculture market will also ensure that Canadian MNEs and SMEs can engage with this new global market.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 9 of 23

A2.2: Business Opportunities for Participants SASC presents a business opportunity for participants through several mechanisms: participation as a Member (Class A:MNE; Class B:SME; Class C:Others, such as academics, governments, and industry organizations); non-Member; or a value-chain Recipient. Recipients include agri-food consumers and non-agri-food/digital industry participants. Both Members and non-Members will have opportunities to respond to Calls for Proposals. Members will pay a fee (discussed in greater detail in C2: Budget and Financial Commitment) and have the ability to contribute to setting strategic direction, Board representation, and preferred project fees. SASC will be a not-for-profit incorporated under the Canada Not-For-Profit Corporations Act. SASC will either incorporate prior to ISI approval or use an existing entity incorporated under the same legislation with extra-provincial registration in at least Alberta and Ontario. The administration hub will be housed within the Werklund Growth Centre at Olds College a newly funded Smart Agriculture Leadership Centre that has a presence in Olds and downtown Calgary. The SASC entity will be governed by a Board of Directors (BoD) comprised of representatives from Member MNEs and SMEs, with additional independents with specialized subject matter expertise in relevant and suitable areas for the objectives of the organization. In addition to the BoD, the SASC will have an Agri-Food Advisory Council (AAC) comprised of subject matter experts and a Consumer Advisory Council (CAC). The advisory councils will act in a non-governance capacity, but will provide advice and guidance to the BoD and the Chief Executive Officer (CEO) with respect to certain decision-making matters. The AAC will, in part, consist of representatives from academic and government Members. In addition to the AAC and CAC, the BoD will have several committees, including Governance, Finance and Audit, Science and Technology, and others. Recognizing the potential for Conflict of Interest (COI) and Conflict of Commitment, SASC processes will use best practices of fairness, transparency, and independence with respect to funding of Members and non-Members for various projects. The SASC will develop a robust, transparent, and sophisticated process for identifying COI issues and dealing with them appropriately. The BoD will have the responsibility of administering and overseeing the implementation and proper execution of COI governance matters. The funding model implemented will follow the principles of transparency, fairness, independence, and best practice. The Supercluster will be led by a CEO, who will be supported by 4-6 additional personnel: Finance, Communications, Admin/Operations, Program Oversight, and Agri-food System Analysts/Economists. Rather than creating new processes and capacity for funding review, selection, and oversight, program delivery will be achieved through contractual agreement with one or more existing Canadian enterprises that have the experience, know-how, and infrastructure to deliver world-class science and technology development competitions. For example, SASC Member Alberta Innovates participates in administering the western Canadian ‘Agriculture Funding Consortium’, a one window approach that facilitates project selection and leveraging opportunities for 12 to 15 organizations. The multi-step and customizable process is managed by an online submission system maintained by the Government of Alberta that also enables the review, award, and post-award management (reporting) stages. SASC would use a portion of administrative and operating costs to sub-contract this important activity, which would use a trusted and transparent methodology for project selection, providing ranked lists of applicants to the BoD for review and final approval for funding.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 10 of 23

The SASC model includes an industry-led approach of supply chain system mapping to drive innovation investment into key pinch-point opportunities (for a digital or other solution). Co-creation of new solutions will be encouraged. SASC will adapt the best practice handbook from sources such as the EUREKA cluster programme Celtic-Plusxi, which is focused on developing European-led digital solutions for a “Smart Connected World”. This model has a track record for delivering excellent results for developing new ICT SME-led innovations in the European Union (EU). We envision an industry-driven Supercluster that will define, perform, and co-fund common research projects in the area of digitally-enabled agri-food production, focused on empowering the Canadian Smart Agri-Food system. The aim is to fund projects that develop technologies, products, processes, and services of key importance to the agri-food sector’s productivity and access to global markets. Templates for funding applications, operating policies, contracts, and tracking and reporting will be developed based on best practices from Alberta Innovates, IRAP, and Celtic-Plus. Matching funding (cash and in-kind) will be a requirement for all SASC investments and will count towards ISED reporting. Strategic and Enabling Projects will require multiple Members on issues of systemic importance and will involve a frictionless intellectual property (IP) license to the SASC Membership. Through a Strategic Project, we will develop a consensus-based ‘Open Data Charter’ for data access, sharing, standards, protocols, rights, and responsibilities. Data (layers and privacy) management will reflect Global Open Data for Agriculture and Nutrition (GODAN) principles and follow the Inter-Institutional Dialogue and Cooperation data governance model. The accessibility of datasets (public and private) will be a key enabler (and product) of technology development, and SASC intends to facilitate access to data “roads and bridges” wherever possible. Accelerator Projects will involve a few industry partners and will be focused on a discrete opportunity. SASC will not own IP; IP ownership will be determined by applicable Canadian law and contractual agreements. Members will retain their generated IP and Members/non-Members who collaborate on projects will use best practice frameworks for co-created IP for product commercialization. All Members must ensure sharing of generated IP for the purposes of future research and training. Participants will gain value through participation in annual roundtables and knowledge dissemination events that will share outcomes and work towards expanding Membership for future SASC sustainability. Business Opportunity: With a global market outlook for smart agriculture products, processes, and services projected to reach $14.5B+ by 2022, there is a significant opportunity for participants developing ag tech products. SASC digital participants with expertise in smart-agriculture hardware (sensors, displays, transceivers, gateways) and software, services (integration, implementation, maintenance, consulting), and solutions (remote monitoring, supply chain management, quality assurance, data analytics, connectivity) will provide business opportunities for this emerging Canadian and global market. Canadian agri-food producers, with access to the right data, will have the knowledge necessary to make informed decisions regarding effective use of resources, thus reducing production costs, increasing productivity, and ensuring that Canadian agri-food can be the preferred global supplier of sustainable high-quality safe food and nutrition. Canadian food processors will be able to maintain, expand, and penetrate new markets because of access to data that validates Canadian production standards and builds a preferred Canadian brand for their products.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 11 of 23

A2.3: Benefits for the Canadian Economy Canada’s agriculture and agri-food system is a complex, modern, integrated, and competitive supply chain that is important to the Canadian economy. It is a dynamic and resilient system that constantly adapts to changing consumer demands, advances in technology, and globalization. It encompasses input and service suppliers, primary producers, food and beverage processors, food retailers and wholesalers, and foodservice providers. The activities along this supply chain generate significant economic benefits at both the national and provincial levels. Canada’s vast geography features differentiated agricultural production (Figure 3). Each region

produces a wide array of products (not fully depicted in the figure) that match the land resource base and market demands. Prime farmlands are concentrated in the Prairies and southern Ontario, but are present in all provinces and territories. Both primary agriculture and agri-food processing are key parts of the agri-food sector value chain. The Barton report, suggested Canada could increase primary agricultural share of the global export market from 5.7 to 8% by 2027xii. This would make Canada the 2nd largest food exporter after the USA. Further, Barton suggested we could double our

global share of processed agri-food market from 2.8 to 5.6%. To achieve these goals, which will generate an additional $30B in economic value or nearly 2% GDP growth, agri-food needs to transform. This step changes would have a huge beneficial impact on the Canadian economy, spur company creation, and result in new direct and indirect jobs in the agri-food and digital sectors. Increasing agri-food processing would have a significant impact. Agri-food processing generates the highest economic contribution to provincial GDP in all provinces, except for AB, MB, and SK where primary production is the key contributor. The food and beverage processing industries are primarily clustered in ON (33.3%) and QC (21.4%), with significant activities in AB (13.4%)xiii. The food and beverage processing industry continues to grow, with the value of its shipments almost doubling between 1995 and 2014 to $103.4B. More than half the value of total agri-food processing exports is attributable to meat, dairy, and beverage products. Focusing on one segment of the agri-food sector (food processing) will not be sufficient to achieve the important transformational change necessary to achieve Barton’s predicted growth potential. Advanced food processing and food manufacturing are reliant on primary agriculture and processing to produce high quality raw materials. Further, population growth trends are going to increase demands for our primary agri-food products. Only a multi-faceted approach will allow us to achieve Canada’s place as the preferred global supplier of sustainable high-quality safe food and nutrition.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 12 of 23

The SASC systems approach addresses the entire value chain, identifying pinch-points and addressing producer stewardship systems (i.e., 4R or Verified Sustainable Beef Plus, VSB+) to ensure we develop new technologies and practices that verifiably respond to economic, social, and environmental stewardship market demands. By creating a common language and opportunity for both agri-food and technology stakeholders, there is greater opportunity to achieve step changes in production and practice at the field level. Further, this model enables continuous improvement through feedback loops, ensuring Canadian agri-food and smart agri-food enabling technologies continue to be world leaders (Figure 4). Canadian Roundtable on Sustainable Beef (CSRB), Integrated Pest Management (IPM), Environmental Farm Plans (EFP).

In addition to increasing exports of agri-food products and smart agri-food technologies, opportunities will exist to export Canadian know-how and expertise, thus creating new jobs. For example, 4R has been adopted internationally and it is likely, as this system becomes more defined that Canadian companies can monetize and export the system and management tools from a knowledge perspective. SASC will strengthen Canada’s agri-food and digital smart agri-food cluster by encouraging innovative thinking and positioning Canada’s firms for global leadership. “It is not common to find collaboration across a supply chain …TELUS …can only solve a part of the problem. Collectively, TELUS, Agrium, Cargill, Zedi and other Supercluster members can develop solutions that support these use cases with scale, low cost and high reliability, the benefits of which have an amplification effect. First, the farmer who can now afford to deploy environmentally friendly monitoring technology that increases crop production and lowers input cost; second, the SME who can export that sensing and data insights technology to farms around the world; and third the researcher who can use the data to develop new models for predicting weather and informing intelligent irrigation planning starting a new cycle of innovation.” ~ Telus

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 13 of 23

Current research at the Olds College Livestock Technology Access Centre involves the use of infrared thermography to detect which animals have a higher likelihood of dark cutting due to transport stress. Producers get deductions for dark cutting animals because of reduced shelf life. Waiting to process animals reduces dark cutting.

Infrared thermography can also be used for early detection of illness in cattle. Early detection = early treatment = healthier animals. Healthy animals are better at feed conversion, reducing GHG production.

Agri-Trend currently employs >200 people. This Alberta company was recently acquired by US farming data giant Trimble, but continues to operate independently. The company provides agrology consulting, precision farming data management, and other services to North American producers. The company developed their customized Agri-Data Solution software that manages over 50M acres, including data layers for precision irrigation, soil composition, and other information to help producers increase productivity and profitability.

Section B: Capabilities and Assets B1: Innovation Ecosystem Potential The SASC approach merges Canada’s agri-food innovation ecosystem with our Canadian digital innovation ecosystem to leverage the expertise of both clusters to respond to the ISI challenge of creating a supercluster that delivers new commercial and global opportunities for growth and competitiveness in the agri-food and digital sectors. We will accelerate the growth of a Canadian smart agri-food industry that attracts cutting-edge research, investment, and talent and that positions our digital and agri-food sector firms for global leadership while boosting productivity, performance, and competitiveness of Canadian agri-food producers, processors, and products. Our business-led response to the important industrial challenge of maintaining and growing Canada’s share of the global agri-food market responds to important economic, social and stewardship market drivers and will generate new companies and new products, processes, and services that are positioned to scale and integrate with global value chains. By fostering a critical mass of collaborating private, public, and academic/government partners focused on these multidisciplinary challenges and driven by a consumer/market systems approach, we know that we will enhance each cluster’s pool of resources, capabilities, and knowledge. Agri-Food Innovation Ecosystem: Canada has made significant investments in the well-established agri-food innovation ecosystem. The federal and provincial governments support

regional research centres, universities, and colleges. For example, Agriculture and Agri-Food Canada (AAFC) has 19 research centres across the country. Canada has made major investments in Canada Excellence Research Chairs, Canada First Research Excellence Research Funds, Networks of Centres of Excellence, College-led Technology Access Centres and Industrial Research Chairs that focus on agri-food opportunities and challenges. In Canada, government represents the largest funding source for agri-food R&D. For 2015-16, public funding of research was $649.5Mxiv. Trend wise, Canadian public R&D expenditures are decreasing and, compared against gross farm receipts, Canada’s commitment to agri-food research is currently lower than Australia but higher than the USAxv. In 2014, business expenditures for agri-food R&D (BERD) were three times lower than the economy’s averagexvi. It is important to note that BERD data may have limitations because Statistics Canada does not capture expenditures from essential and related “input” industries, such as seed developers, chemical companies, machinery companies, contract service providers, and biotechnology companies. The significant R&D that occurs in

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 14 of 23

“Canada’s fate in the knowledge-based era rests on the nation’s ability to continuously improve its communications infrastructure and talent pool. CENGN is creating an ecosystem with the necessary knowledge to leapfrog Canada into a world leadership role in Next Generation Networks.” ~ Mathieu Lemay, CEO, Inocybe Technologies, CENGN Member

Growsafe Systems (Airdrie, AB) uses intelligent systems to measure bio-metric and environmental inputs in livestock production environments, continuously monitoring animal health and performance status. This Alberta company has expanded to the US, Australia, and Brazil and provides a product solution for livestock producers to use science and technology to monitor and improve animal well-being and farm profitability.

these companies has a substantial impact on the agri-food sectorxvii. To foster more industry-led research activity, several initiatives have aimed to increase collaboration and target federal R&D investment, such as AAFC’s Value Chain Roundtables. AAFC leads Growing Forward 2 (GF2) (a federal-provincial joint program) targeted at positioning Canada’s agriculture and agri-food sector for growth and prosperity. Amongst the many GF2 programs, the Canadian AgriInnovation Program is highly relevant to this proposal as it includes the Agri-Science Clusters Initiative, which emphasizes science and innovation to enhance sector productivity, profitability, and competitiveness. Fourteen agri-science clusters were funded: Beef, Organic, Pulse, Dairy, Wheat, Barley, Canola, Bioproducts, Agri-Food Innovation, Poultry, Horticulture, Swine, Ornamental, and Field Crop Genetic Improvements. SASC will leverage all of the knowledge generated through this research. Canadian R&D quality, intensity, and productivity demonstrate Canada’s strong contribution to agricultural innovation. The majority of peer-reviewed literature focuses on agricultural sciences, while most agricultural patents are related to food processing.xviii Industry has benefited from this R&D, for example, innovations in food safety and preservation (e.g., HACCP systems and flash freezing), inventory control (i.e., just-in-time inventory), and sensor systems have had significant impact on the food processing industry. With so many cluster silos focused on their unique value chain needs, there is a need to link and leverage them together. The SASC approach of linking supply chains through data/information technology solutions will develop new technologies and efficient practices that verifiably respond to economic, social, and environmental stewardship market demands and continue to

build on Canadian agri-food strengths. Digital Innovation Ecosystem: Canada excels in digital innovation. Our academic R&D output regularly generates significant advances in computer science, machine learning, computer vision, and wireless signal processing. There are emerging clusters in Ottawa, Waterloo, Toronto Montreal, Edmonton and Vancouver representing over 500 start-ups, numerous research labs, incubators, business accelerators and targeted venture capital fundsxix. SASC partner CENGN (Ottawa, ON) brings together a consortium of industry partners to strategically fill the gaps identified in the Canadian telecommunications commercialization ecosystem. Basic and applied researches have resulted in some significant Canadian breakthroughs in deep learning and

reinforcement learning, linchpins for the development of artificial intelligence. The ICT and telecom industry has remained the most research-intensive sector in Canada with an average of 9.65 cents spent on R&D per $1 of GDP since 1994. This is over eight times higher than the economy average ($.01.19) and double the ratio of manufacturing, which is the country’s second most research-intensive sector.xx The Canadian computer technology sector has

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 15 of 23

“Space-based hyperspectral remote sensing provides a step function improvement in the quality of data by providing much higher fidelity in the spectral domain which enables subtle changes in crops, pastures and rangelands to be measured and detected. This revolutionary big (really big!) data source would feed into the sophisticated mathematical models and information communication networks enabling a leap forward in Smart Ag." ~MDA Systems Ltd.

a higher frequency of patenting than other industries. xxi This inclination to innovate and patent digital technologies coupled with Canada’s agri-food powerhouse expertise will lead to a significant global leadership position for agri-food and digital Canadian firms. Global Agri-Food Examples: Netherland’s Food Valley is regarded as the world-leading centre of food innovation and collaboration. The region is host to a high concentration of businesses (12 of the world’s top 40 food and beverage businesses), numerous research centres, and over 15,000 professionals working in food-related sciences, technology development, and food manufacturing.xxii This concentration of activity is likely a result of Netherland’s geographic reality. Over 170M consumers live within 500 km of the valley and, when the radius is expanded to 1,300 km, the population nearly triples to 800M. Immediate access to this sizeable market is a key feature that attracts businesses to work in this cluster. Another example of government-industry collaboration to produce shifts in agri-food activity is Australia’s Food and Health Dialogue. The Dialogue works with industry partners to reformulate food products, adjust portion sizing, and develop consumer messaging targets to meet public health objectives. Both of these examples highlight the importance of industry engagement to produce shifts in economics and population health outcomes. Canada’s geographic reality indicates that we cannot replicate Netherland’s example, but we can learn from it. These global examples confirm that successful initiatives depend on well-resourced, collaborative action by researchers, government, intermediary organizations, and especially the food industry. Pan-Canadian Ecosystem: SASC envisions a conceptual hub and node model, recognizing that there are many cities in Canada with significant and important capacity in the agri-food and digital sectors (Figure 5). Conclusion: Smart agri-food digital technologies and tools can support the growth of the agri-food sector by $30B by 2027. In order to achieve this, we need to engage a full value chain systems-led approach that is geared towards economic, social and environmental outcomes. Without this approach, smart agri-food technologies risk being “a hammer in search of a nail” and the agri-food sector will remained challenged to fully adopt technologies that could have a step change impact on inputs, production, and processing segments. By ensuring that solutions are pinch-point opportunity focused, we will ensure that we develop technologies that immediate experience demand-pull market entry, rather than technology-push. The solutions may be digital, but they may also be genetic, automation, or a whole host of other technologies. By leveraging the existing clusters of expertise and technologies available in Canada, we can develop solutions that are relevant, impactful, and exportable for Canadian agri-food and the Canadian Smart Agri-Food Technology sectors.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 16 of 23

B2. Collaboration and Engagement - See Participant List Spreadsheet

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 17 of 23

Section C: Budget and Financial Commitments C.1 Budget and Financial Commitment Table Expenditures/Proposal Budget Theme 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Total Technology leadership ISI $15,000,000 $15,000,000 $15,000,000 $15,000,000 $15,000,000 $75,000,000

Industry $15,000,000 $15,000,000 $15,000,000 $15,000,000 $15,000,000 $75,000,000

Other $750,300 $750,300 $750,300 $750,300 $750,300 $750,300

Total $30,750,300 $30,750,300 $30,750,300 $30,750,300 $30,750,300 $30,750,300 Partnerships for Scale ISI $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Industry $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Other $125,050 $125,050 $125,050 $125,050 $125,050 $625,250

Total $5,125,050 $5,125,050 $5,125,050 $5,125,050 $5,125,050 $25,625,250 Diverse and Skilled Talent Pools ISI $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Industry $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Other $125,050 $125,050 $125,050 $125,050 $125,050 $625,250

Total $5,125,050 $5,125,050 $5,125,050 $5,125,050 $5,125,050 $25,625,250

Access to Innovation ISI $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Industry $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Other $125,050 $125,050 $125,050 $125,050 $125,050 $625,250

Total $5,125,050 $5,125,050 $5,125,050 $5,125,050 $5,125,050 $25,625,250

Global Advantage ISI $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Industry $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $5,000,000

Other $125,050 $125,050 $125,050 $125,050 $125,050 $625,250

Total $5,125,050 $5,125,050 $5,125,050 $5,125,050 $5,125,050 $25,625,250 Total $51,250,500 $51,250,500 $51,250,500 $51,250,500 $51,250,500 $256,252,500

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 18 of 23

Revenues/Sources of Funds for Proposal Source of funds

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Total

ISI $25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000 $125,000,000

Class A & B Member Fees (MNE and SME)

$400,000 $425,000 $450,000 $475,000 $500,000 $2,250,000

Projected SASC Project Fees

$660,000 $660,000 $660,000 $660,000 $660,000 $3,300,000

Lead Applicant Agrium TBD Partner Applicants

Telus TBD Farmer’s Edge

$8,000,000 $8,000,000 $8,000,000 $8,000,000 $8,000,000 $40,000,000

BIXSco $60,000 $60,000 $60,000 $60,000 $60,000 $300,000 Olds College

$0

Industry Participants

A&L Canada Laboratories

$5,000 $5,000 $5,000 $5,000 $5,000 $25,000

ABB Canada

$1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $5,000,000

FarmLead $200,000 $200,000 $200,000 $200,000 $200,000 $1,000,000 Indian Business Corp.

$2,000 $2,000 $2,000 $2,000 $2,000 $10,000

MDA Systems

$500,000 $500,000 $500,000 $500,000 $500,000 $2,500,000

Zedi $44,000 $44,000 $44,000 $44,000 $44,000 $220,000 Unsecured Industry Matching Cash (@ LOI)

$7,879,000 $7,854,000 $7,829,000 $7,804,000 $7,779,000 $39,145,000

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 19 of 23

Other Participants (ineligible for matching cash) Class C Member Fees (Academic, Gov’t, NFP) – ineligible for ISI matching

$20,000 $25,000 $30,000 $35,000 $40,000 $150,000

Niagara College

$50,000 $50,000 $50,000 $50,000 $50,000 $250,000

Total 43,820,000 $43,825,000 $43,830,000 $43,835,000 $43,840,000 $219,150,000

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 20 of 23

Value of in-kind contributions/Sources of contributions for Proposal Source of contribution

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Total

Lead Applicant Agrium TBD Partner Applicants

Telus $500,000 $500,000 $500,000 $500,000 $500,000 $2,500,000 Farmer’s Edge

$2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $10,000,000

BIXSco $60,000 $60,000 $60,000 $60,000 $60,000 $300,000 Olds College $100,000 $100,000 $100,000 $100,000 $100,000 $500,000 Industry Participants

A&L Canada Laboratories Inc.

$45,000 $45,000 $45,000 $45,000 $45,000 $225,000

ABB TBD Agri-Trend/ Trimble

$200,000 $200,000 $200,000 $200,000 $200,000 $1,000,000

Alberta Clean Technology Industry Alliance

$1,000 $1,000 $1,000 $1,000 $1,000 $5,000

AVAC $50,000 $50,000 $50,000 $50,000 $50,000 $250,000 Canadian Institute for Biological Carbon Canada

$5,000 $5,000 $5,000 $5,000 $5,000 $25,000

Cargill TBD FarmLead $40,000 $40,000 $40,000 $40,000 $40,000 $200,000 Indian Business Corp

$500 $500 $500 $500 $500 $25,000

Lystek International

$10,000 $10,000 $10,000 $10,000 $10,000 $50,000

MDA Systems

$200,000 $200,000 $200,000 $200,000 $200,000 $1,000,000

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 21 of 23

PAMI (Prairie Ag Machinery Institute)

$20,000 $20,000 $20,000 $20,000 $20,000 $100,000

Weather Innovations

$50,000 $50,000 $50,000 $50,000 $50,000 $250,000

Zedi $56,000 $56,000 $56,000 $56,000 $56,000 $280,000 Unsecured Industry Matching In- Kind Commitments

$3,012,500 $3,012,500 $3,012,500 $3,012,500 $3,012,500 $15,062,500

Other Participants

Carleton University

$48,000 $48,000 $48,000 $48,000 $48,000 $240,000

Lakeland College

$50,000 $50,000 $50,000 $50,000 $50,000 $250,000

Niagara College

$102,500 $102,500 $102,500 $102,500 $102,500 $512,500

Sask Polytechnic

$100,000 $100,000 $100,000 $100,000 $100,000 $500,000

University of Calgary

$50,000 $50,000 $50,000 $50,000 $50,000 $250,000

University of Lethbridge

$200,000 $200,000 $200,000 $200,000 $200,000 $1,000,000

University of Manitoba

$520,000 $520,000 $520,000 $520,000 $520,000 $2,600,000

Total $7,420,500 $7,420,500 $7,420,500 $7,420,500 $7,420,500 $37,102,500

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 22 of 23

C2: Budget and financial commitment description As an incorporated national not-for-profit, SASC operates under a Membership model. Entities will have the option to participate by purchasing a Membership. Membership allows participants to contribute towards setting the strategic priorities for SASC and participating in governance or special interest groups. Members will also have preferred access to IP and datasets generated in collaborative projects. We envision at minimum three membership classes with the following fees: A:MNE $50,000 per annum; B:SME $5,000 pa; and C:Others $1,000 pa. SASC will derive matching revenues for administrative and operating costs from both membership fees and project fees to match ISI contributions to operations. The SASC Project Fee will be calculated based on the industry cash commitment to projects. This Project Fee will be calculated prior and in addition to any overhead fees charged by service providers. Both Members and non-Members will have the ability to participate in Funded Projects, which will require 75% cash and 25% in-kind commitment to meet matching requirements. Members would receive a preferred SASC Project Fee (2%). Non-Members will be incentivized to become Members and avoid the non-Member fee of 15%. The membership and project fee projections are included in the revenue source table above. We anticipate we will see moderate growth in membership over the course of the ISI mandate and expect that any fees collected in excess of the 15% administration expense cap will flow into RFPs and help build SASC sustainability.

At the time of LOI submission, we do not have a full private sector commitment of $125M cash and in-kind to match the requested $125M from ISED. However, the momentum that has built through the development process will continue to carry forward. Should SASC be invited to lead or be a part of a consolidated agri-food supercluster full proposal, we are confident that private sector support will meet and possibly exceed funding goals. Throughout the consultation process, we have seen growing interest. At this time, industry commitment has been limited due to the participation risk hurdles of the LOI phase, clarity regarding funding process models, governance, roles and responsibilities of Members, and other operational unknowns. This LOI builds upon an industry-led response to the Barton Report, which identified agri-food as a key economic development opportunity for Canada.

SASC will have a portfolio of projects: Strategic (10%), Enabling (50%), and Accelerator Projects (40%). Funded projects must address ISI themes and eligible activities: building Canadian technology leadership (60% weighting), creating partnerships for scale (10%), developing talent pools (10%), increasing access to innovation (10%), and creating Canadian global market advantage (10%). Project Calls would be administered by an entity with a well-established track record and process for pre- and post-award administration and ensure that RFPs operate under the principles of transparency, fairness, independence, and best practice. We expect a minimum of two RFPs per year.

As noted in our Participant List, we have several non-industry participants who recognize the transformational and crucial shift SASC represents for the agri-food and smart agri-food technology sectors. Members will be encouraged to seek broader funding, as these non-matching contributions will expand SASC outcomes.

Innovation Superclusters Initiative: Letter of Intent Proposal Template (required)

Page 23 of 23

i Barton, D. “Unleashing the Growth Potential of Key Sectors”, Advisory Council on Economic Growth, February 6, 2017. Available at http://www.budget.gc.ca/aceg-ccce/pdf/key-sectors-secteurs-cles-eng.pdf ii Statistics Canada (2016), Census of Agriculture. Available at: http://www.statcan.gc.ca/eng/ca2016 iii United States of America Central Intelligence Agency (2012) World Factbook 2012. Available at: https://www.cia.gov/library/publications/download/download-2012/ iv Food and Agriculture Organization of the United Nations (FAO) (2009) Global agriculture towards 2050. Available at: http://www.fao.org/fileadmin/templates/wsfs/docs/Issues_papers/HLEF2050_Global_Agriculture.pdf v Barton, D. “Unleashing the Growth Potential of Key Sectors”, Advisory Council on Economic Growth, February 6, 2017. Available at http://www.budget.gc.ca/aceg-ccce/pdf/key-sectors-secteurs-cles-eng.pdf vi Wilson, Deborah (2016) McDonald’s pilot spotlights the value of information sharing. Available at: http://www.bixsco.com/mcdonalss-pilot-spotlights-the-value-of-information-sharing vii Steele, Dale. (2017), Analysis of Precision Agriculture Adoption and Barriers in western Canada. For: Agriculture and Agri-Food Canada. Available at: https://www.realagriculture.com/wp-content/uploads/2017/04/Final-Report-Analysis-of-Precision-Agriculture-Adoption-and-Barriers-in-western-Canada-April-2017.pdf viii Research and Markets (2017) Smart Agriculture Market by Agriculture Type (Precision Farming, Livestock Monitoring, Fish Farming, Smart Greenhouse), Hardware (GPS, Drones, Sensors, RFID, LED Growth Lights), Software, Services, Application, and Geography – Global Forecast to 2021. Available at: https://www.researchandmarkets.com/reports/4143579/smart-agriculture-market-by-agriculture-type#pos-3 ix McConkey, B., et. al. (2000) Measuring Soil Carbon Change on Cropland: The Prairie Soil Carbon Balance Project. Available at: http://www.usask.ca/soilsncrops/conference-proceedings/previous_years/Files/cc2000/docs/posters/018_post.PDF x Over the past five years between 750,000 and 1 million head of cattle move annually to the USA to be finished and processed. This represents a major economic loss to both Canadian based feedlots and processors xi Celtic-Plus (2013) Handbook: Celtic-Plus Project Manual Version 3, 2013. Available at: https://www.celticplus.eu/celtic-plus-handbook/ xii Barton, D. “Unleashing the Growth Potential of Key Sectors”, Advisory Council on Economic Growth, February 6, 2017. Available at http://www.budget.gc.ca/aceg-ccce/pdf/key-sectors-secteurs-cles-eng.pdf xiii AAFC (2016), An Overview of the Canadian Agriculture and Agri-Food System. Available at: http://www.agr.gc.ca/eng/about-us/publications/economic-publications/an-overview-of-the-canadian-agriculture-and-agri-food-system-2016/?id=1462288050282 xiv ibid xv ibid xvi Savine, Kirill. (2014) Exploring the Variation in R&D –Intensity Across Canadian Industries. Available at: http://deepcentre.com/blog/exploring-the-variation-in-rd-intensity-across-canadian-industries xvii OECD (2015), Innovation, Agricultural Productivity and Sustainability in Canada, OECD Food and Agricultural Reviews, OECD Publishing. Paris. xviii ibid xix Gagne, J.F. (2017) Top Plauers in the Canadian Artificial Intelligence Clusters. Available at: http://www.jfgagne.ai/blog/2017/4/24/mapping-the-canadian-ai-ecosystem xx Savine, Kirill. (2014) Exploring the Variation in R&D –Intensity Across Canadian Industries. Available at: http://deepcentre.com/blog/exploring-the-variation-in-rd-intensity-across-canadian-industries xxi Savine, Kirill. (2015) Canada’s Innovation Performance: A Scorecard. Available at: http://deepcentre.com/wordpress/wp-content/uploads/2015/03/DEEP-Centre-Canadas-Innovation-Performance-March-2015.pdf xxii Conference Board of Canada (2013) Alberta Unbound—Research and Innovation Opportunities in Alberta’s Food Sector. Available at: http://bio.albertainnovates.ca/media/61384/conference_board_-_alberta_unbound__2013-11-18__final_report.pdf