Pre-production Funding Stream - Applicant Guide

Applicant Guide

December 11^th, 2023

Purpose of this guide

This guide will:

• help you determine if your company and your project may be eligible for funding under the Market Growth Program - Pre-production funding stream (PPFS):
• provide information on various aspects of the PPFS.

Table of contents

• 1.0 About the Market Growth Program
• 2.0 About the Pre-production funding stream
  • 2.1 Eligible applicants
  • 2.2 Eligible activities
  • 2.3 Ineligible activities
  • 2.4 Funding and cost-sharing
  • 2.5 Eligible costs
  • 2.6 Ineligible costs
  • 2.7 Basis of payments
  • 2.8 Retroactivity
• 3.0 Application process
  • 3.1 How to apply
  • 3.2 Application review
  • 3.3 Application approval
• 4.0 Assessment criteria
  • 4.1 Criteria related to the expected outcomes of the investment
  • 4.2 Criteria related to the feasibility of the study
• 5.0 Intellectual property
• 6.0 Contact information

1.0 About the Market Growth Program

The PPFS is part of the Market Growth Program (MGP). The MGP aims to stimulate investments for long-term market growth in Canadian dairy processing by supporting sustainable and innovative investment projects with an emphasis on the use of milk solids non-fat (SNF). Its intended outcome is to accelerate and support investments which aim to reduce structural SNF surplus, support market growth, or process milk in regions with significant skim milk surplus/processing deficiencies.

The Market Growth Program is delivered by the Canadian Dairy Commission (CDC) on behalf of the Canadian Milk Supply Management Committee.

2.0 About the Pre-production funding stream

The Pre-production Funding Stream supports investments

• in additional processing capacity for milk solids non-fat; and
• in the creation of new products that add value to the SNF surplus.

Specifically, this stream supports the execution of studies during the planning stage of an investment, whether in a new plant or in an existing plant, including equipment replacement to increase processing capacity. This stream can reimburse the successful applicant up to 50% of the cost of approved studies.

2.1 Eligible applicants

Eligible applicants are for-profit dairy processors. Only projects related to milk from cows are eligible.

Applicants:

• must hold an active federal or provincial licence or permit to carry out activities with respect to milk processing.
• are Canadian milk buyers.
• are federally or provincially registered legal entities capable of entering into legally binding agreements.

2.2 Eligible activities

To be eligible, the studies must be required to obtain a licence, a permit, or financing for an investment. Eligible activities include the following pre-production studies performed by a firm external to the Applicant.

• Engineering plans
• Environmental studies
• Economic feasibility studies required by a third party for funding (e.g., lending institution or government programs)

Eligible studies must be related to an investment:

• That will increase the processing capacity to address the issue of the surplus of SNF.
• That has a positive impact on dairy farmers' global revenues.
• For which the following have already been identified: product(s), market(s), market environment, risks and mitigation measures, preliminary timeline, additional volume of milk required.

2.3 Ineligible activities

• Studies performed by the Applicant’s staff. 
• Research and development, as well as product testing.
• Studies related to evaluating market displacement.
• Studies related to the marketing or promotion of a product.

2.4 Funding and cost-sharing

• The funding available for the Pre-production Funding Stream is up to $5,000,000 per two-year cycle.
• The maximum funding is up to 50% of the eligible costs up to a maximum of $500,000 per Applicant per cycle.
• The funding cannot exceed the Applicant’s share of the study’s cost. Non-repayable funding from another source is not considered part of the Applicant’s share.

2.5 Eligible costs

The following cost type is eligible if it is reasonable and directly related to the study, the investment, and the objectives of the program:

• Professional or specialized services for which a contract is entered into to complete eligible activities. These include, but are not limited to, honorarium, travel costs, overhead/administration and project management costs invoiced by the firm or consultant.

2.6 Ineligible costs

Ineligible costs include, but are not limited to:

• Salary and benefits of the Applicant’s staff.
• Taxes such as the Goods and Services Tax, value added taxes.
• Travel costs of the Applicant’s staff.
• Project management costs of the Applicant’s staff.
• Administrative and office supplies expenses.

2.7 Basis of payments

Payments to recipients will be made based on the reimbursement of eligible costs that have been incurred and paid by the applicant as set out in the funding agreement. Once the project is completed, to receive a final payment, the applicant will need to submit to the Canadian Dairy Commission program administrator the consultant’s invoice and proof of payment of the invoice as well as pages from each study’s report, including the cover page, the table of contents and a summary of the findings. The Canadian Dairy Commission may request additional details about the study to validate the claim for reimbursement.

Professional or specialized service invoices must include:

• the name of the business or professional providing the services.
• the name and address of the client.
• the date of the invoice.
• the dates the services were rendered.
• a description of the services rendered.

2.8 Retroactivity

Should funding be approved, the program will consider costs eligible for reimbursement as of July 20, 2023. However, any costs incurred prior to the signing of a funding agreement would be incurred solely at the applicant's risk without obligation of reimbursement.

3.0 Application process

3.1 How to apply

Eligible applicants must complete and submit an Application Form to determine their study’s eligibility and alignment with program criteria and objectives. An applicant may apply for funding for more than one study at a time.

Please contact the program for help completing the Application Form.

Once you submit your application, the CDC will send you an acknowledgement notice and indicate whether your application is complete or if information is missing. If your application is incomplete, you will have 15 business days to provide the missing information before your file is closed. The following supporting documents are required as part of a complete application:

• Application form.
• Processing licence of the applicant.
• Certificate of Incorporation or Articles of Incorporation of the applicant.
• Certificate of Incorporation or equivalent for the firm or consultant or, if these are not available, a business licence.
• Detailed quotes, estimates and/or contracts that include a full description of services to be delivered to support the costs of the study as outlined in section 2.5 Eligible costs.
• A letter of support from the milk marketing board of the province where the investment will take place.

Deadline

The CDC will receive the applications up to February 16, 2024, 11:59 pm Eastern Standard Time. Intakes will take place every 6 months based on program funding availability. Studies must be completed within one year of the signature of a funding agreement. 

3.2 Application review

An assessment of your complete application against the objectives of the MGP and the Pre-production Funding stream will be carried out using the program’s assessment criteria (See 4 – Assessment criteria). 

The assessment will be conducted by the Canadian Dairy Commission staff. Recommendations for approval and/or rejection will be submitted to the P10 Investment Committee.

At any point after you apply, the Canadian Dairy Commission may contact you for more information.

3.3 Application approval

Should your application be approved, you will be invited to enter into a tripartite funding agreement with the provincial milk marketing board where the project will take place and the Canadian Dairy Commission. 

4.0 Assessment criteria

Once the eligibility of the applicant and study have been established, applications will be assessed on their overall relevance with respect to the objectives of the program and against the following criteria:

4.1 Criteria related to the expected outcomes of the investment

• A demonstrated need to conduct an eligible study
• Expected increase in SNF processing
• Expected impact of the investment on producer revenues
• Value added of the proposed finished product
• Potential to increase utilization of SNF
• Utilization of all milk components with an emphasis on SNF
• Location in an area with a known deficit in SNF processing activities
• The Applicant’s experience and track record in completing similar investments

4.2 Criteria related to the feasibility of the study

• The reasonableness of proposed activities and timelines for the study
• The reasonableness of the proposed costs for the study
• The expertise of the consulting firm hired to perform the study
• The relevance of the study to the project as a whole

5.0 Intellectual property

Any intellectual property created or developed by or for the recipient resulting from the activities undertaken and funded by the Pre-production Funding Stream will be owned by the recipient or by a third party, as may be negotiated by the recipient.

6.0 Contact information

For more information on the Market Growth Program - Pre-production Funding Stream, please contact the program by:

• Email: mgp-pcm@cdc-ccl.gc.ca
• Telephone: 1-866-366-0676

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