Direct and Indirect Research Costs
All researcher/business collaborative research projects have a relatively similar cost structure. First, the structure is based on direct research costs: scholarships for students or salaries for the analysts involved, material costs, publication and dissemination costs, etc. Secondly, this structure is based on indirect research costs that are intended to compensate the company for the use of university infrastructure during projects. These indirect costs vary according to the home universities of the researchers involved in a given project, but also according to the type of funding program chosen. In all cases, partnership contracts are the responsibility of the lead researcher’s home university and will determine the final costs of the project, the conditions for attribution of intellectual property, etc. Industrial partners may choose to fully fund a project or use a government funding source, as described below. To find out more, feel free to contact us.
The costs associated with collaborative research projects involving researchers and companies are extremely competitive and also benefit from strong support from the different levels of government. This support aims, on the one hand, to promote research and the competitive position of the local companies and industries taking part in the project, and, on the other hand, to train future researchers who can then be recruited by these companies or can pursue their careers in the university world.
There are many funding sources, whether federal or provincial, and these sources are complemented by specific programs on research areas deemed strategic for Quebec and Canada. All of these programs can be accompanied, integrated and complemented by funding sources more focused on the industrial side of projects, depending on the context. Several specialized organizations play this role, such as the IRAP program, Scale AI, etc.
In order to qualify for funding programs on the university side, research projects go through a peer review process. This process examines the relevance of the research project, its potential contribution to science as well as its relevance to the development of the sector concerned in Canada and Quebec. Naturally, the greater the amount of funding being sought, the more stringent the evaluation criteria applied by the program concerned. This evaluation has an impact on the temporal management of projects, as well the complexity of project follow-up. This is therefore a criterion to be considered when choosing a funding program. Finally, it should be borne in mind that several of these funding programs can be combined.
The main program at the federal level is centred on Option 1 of the Alliance grants program. This Canada-wide competitive program is open to university researchers collaborating with private-sector, public or not-for-profit organizations. The program provides funding of $20,000 to $1,000,000 per year for a duration of one to five years. The level of support offered ranges from 1:1 (50 %) to 1:3 (66 %) depending on the type of structure and organizations involved in the research project.
Option 2 of the same program allows for more specific support in the search for solutions to societal problems by making use of university expertise, while ensuring the commitment and collaboration of the community and people interested in the issue at stake.
Note that the Canadian government is now incorporating national security risk assessment into the evaluation of research partnerships related to the Alliance program.
At the provincial level, several programs of support are available, and are described on the Quebec Ministry of the Economy and Innovation website (in French). The leading programs are centralized and managed by Quebec industrial research sector groups or RSRI (in French).
Among these RSRIs, GERAD members regularly collaborate with Prompt (in French), which is dedicated to information, communication and digital technologies. However, other RSRIs may be involved in projects – particularly in research projects that combine data science and engineering, such as CRIAQ (aerospace), MEDTEQ (health technologies), InnovÉÉ (electrical energy), etc.
Membership is some of these RSRIs is required to access grants. However, this is not the case with Prompt, which in turn charges management fees out of the funds granted. The level of funding offered can be up to 40% of a partnership project, and can be combined with NSERC or Mitacs programs to reach 80% of total funding.
When a collaborative research project implicates little or no material costs or involvement of specialized professionals, the federal Mitacs program is particularly attractive for funding Master’s, Doctoral and Postdoctoral students. This is a flexible program which responds very quickly to funding requests. It allows for leverage of 50%-50% and up to 55%-45% for the most important programs. Moreover, it may be combined with other funding sources up to a maximum of 80% of grants.
Other Sources and Resources
- Several ad hoc programs call for projects on a regular basis in sectors deemed strategic for Quebec. For example, we note the funding program for artificial intelligence (PARTNAR-IA (in French)), the program related to development of 5G technologies (ENCQOR 5G (in French)), the program related to the reduction of greenhouse gases (INNOV-R), etc.
- Some organizations, such as IVADO, offer limited funding possibilities to certain categories of members for project start-ups.
- It is important to clearly define the level of technological readiness of the project you wish to have funded, since this information will often be used to define some of the funding conditions.
Federal and provincial tax credits are too often neglected in the decision-making process associated with implementation of university research projects. Yet, tax credits for scientific research and experimental development provide additional important support which, if properly managed, can make a significant contribution to development of research clusters in companies.
By combining the two levels of government (federal and provincial (details in French only)), Canadian-controlled private corporations (CCPC) can benefit from 27% to 55% tax rebates in the form of refundable credits or non-refundable credits, but which can be recouped over several subsequent years. Other kinds of business also receive an attractive level of support, primarily in the form of non-refundable credits. Contracts concluded with recognized research entities, equipment, and salaries of company personnel assigned to research and development projects are eligible costs when calculating these credits.
Finally, the combination of all these programs provides an extremely favourable landscape for the development of scientific research and experimental development in Canada.