Government Funding Opportunities

Don Van DykeBusiness Development Consultant

Ontario Ministry of Economic Development & Trade

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

AGENDA

Where is Ontario?Where is Ontario?

Exceptionally LocatedExceptionally Located

• Ontario gives access to over 135 million consumers within 500 miles • NAFTA gives Ontario based companies easy access to the US market• Less than a 2-hour flight from major U.S. life science centers

Life Science in Ontario

Biopharmaceuticals Medical Equipment

Healthcare IT

• Pharmaceuticals– 16,250 employees– Includes global giants such as AstraZeneca, Bayer, Eli

Lilly, GlaxoSmithKline and Pfizer – Revenues of more than $7 billion

• Medical devices– 22,000 employees – 600+ companies – Revenues of $4 billion-plus

• Biotech– 5,200+ employees – 140+ companies, more than any U.S. state except

California or Massachusetts, including global giants such as Amgen, Genzyme and Sanofi Pasteur

– Revenues of more than $2.7 billion

Life Science in Ontario

Medical Devices in Ontario

• Employs 22,000 people

• Includes more than 600 Device companies >60% of Canada’s Device industry

• Includes GE Medical Systems, Siemens, Abbott Point of Care (iSTAT) and Johnson & Johnson Medical Products

• Includes Ontario-founded MDS Sciex, SciCan, CME Telemetrix & Tm Bioscience

• Revenues greater than $4 Billion

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

9

Ontario’sNext Generation of Jobs Fund

• NGOJF is a $1.15 billion program over five years– This compares favorably to U.S. State programs

– Part of a larger “Innovation Agenda” of $3 Billion over 8 years

• The fund supports innovative investments in technology, research, development and commercialization across industries

Next Generation of Jobs Fund - 3 Programs

Cash Flow

Cash FlowNGOJF

GrantProject

Expenditures

1. 20% Advance upon signing funding agreement 20% of Grant Company expenditures to

earn the advance

$3M $0$20M

2. Further disbursements 60% of Grant reimbursed

incrementally based on 15% of project expenditures

$9M $60M

3. 20% Holdback released after 100% investment commitment certified 20% of Grant

$3M $20M

Total $15M $100M

Project Investment Commitment - $100M. NGOJF Grant - $15M (15%)

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

$205-million Ontario VC Fund

• Ontario’s contribution to the fund is $90 million.

• Between 80 per cent and 100 per cent of the capital invested in Ontario VC funds.

• Up to 20 per cent of the capital will be available for direct co-investments in companies.

• The $205 million Ontario Venture Capital Fund is the biggest fund of its kind in Canada

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

Ontario has broad definition of R&D

New product development

Development of new or improved materials

Manufacturing process improvement

Tax Savings for R&D in OntarioTax Savings for R&D in Ontario

• Ontario’s provincial tax credits, combined with Canadian federal tax credits can cut the cost of a $100 R&D expenditure to less than $44

• Every dollar is deductible, not incremental

• Not just tax relief – Refundable cash benefit of 30 – 45%– No revenue stream required– $3 Million in R&D spending gets a check

from the government of up to $1,350,000

• These R&D tax credits are the most generous of any G-8 nation

Tax Savings for R&D in OntarioTax Savings for R&D in Ontario

R&D Conducted @

Company

R&D Conducted @

Research Institution

GROSS RESEARCH EXPENDITURE $100.00 $100.00

Ontario Innovation Tax Credit (OITC) – 10%

(10.00) (10.00)

Ontario Business-Research Institute

Tax Credit (OBRITC) – 20%

(20.00)

Federal Investment Tax Credit – 20% (18.00) (14.00)

Tax Deduction ($72 * 36.12%) (26.01) (20.23)

Ontario Exemption of Federal

Investment Tax Credit ($18 * 14.0%)

(2.52) (1.96)

ACTUAL COST OF $100 R&D $43.47 $33.81

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

Advanced Manufacturing Investment Strategy - AMIS -

A $500 million incentive loan program

Targeted at innovative activities in advanced manufacturing:

– Industrial R&D

– Design, prototyping and engineering

– New or advanced materials and products

– Advanced manufacturing processes

– Technology innovation

– Robotics/software development

– Waste reduction or energy conservation

AMIS Loans

• Loan of up to 30% of eligible project costs (max $10 million)

• Provided at Ontario’s cost of borrowing plus 1%

• Repayable loans are interest free for up to 5 years provided the firm meets milestones and performance targets

• The loan must be secured and the principal repaid, but the terms are negotiable including term length

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

Public OfferingsToronto Stock Exchange (TSX)

TSX is one of the best markets in the world for raising public equity capital

– 2nd in the world by number of listed public companies

– 5th in the world in total equity raised

– 8th in the world by total listed company market capitalization

TSX Group Niche

Pre-Clinical Pre-Clinical Phase IPhase I Phase IIPhase IIPhase III/Phase III/

Regulatory Regulatory ApprovalsApprovals

TSX Venture Candidates

TSX Candidates

NASDAQ Candidates

AIM Candidates

• Where is Ontario?• Life Science in Ontario• Medical Devices in Ontario• Direct Government Funding• Ontario VC Fund• Tax Savings & Rebates• Government Loans for Advanced

Manufacturing• Public Offering Funding• Additional Resources

Additional Resources

• Business Immigration Services

– Personal consultations, networking opportunities, and introductions to other service providers.

– Success Stories http://www.2ontario.com/bi/bi_successstories.asp

– Multinational Employee Transfer Guide

– Business Start-up Resources

• Canada-Ontario Business Service Centre

• Small Business Enterprise Centres

• Streamlined on-line business registration

Additional Resources

• R&D Program

• Export Alliance

• Information Exchange

• Education Program partnerships

• MAT partnerships

• MAT funding opportunities

• How to: Roadmaps (i.e. Competitive Intelligence and Regulatory approval)

Don Van DykeRaleigh, NC

Business Development ConsultantOntario Ministry of Economic Development & Trade

dvandyke@nc.rr.com(919) 345-2838