Making the Case for a Canadian SBIR (CSBIR): Will Canada’s New Innovation Minister Take the Lead?
July 13, 2016

Bains.jpgCall for federal CSBIR Innovation Leadership

Ottawa, ON...CATAAlliance (, Canada's One Voice for Innovation Lobby Group, is calling on the federal government, led by the Minister of Innovation, Science and Economic Development, the Hon. Navdeep Bains, to adopt a Canadian version of the U.S. SBIR (Small Business Innovation Research) Program, as part of a new incentive model to help small companies in Canada bridge the innovation gap.

The proposal is part of the CATA competitive innovation nation Campaign comprised of a number of Advocacy Initiatives to help advance Canada’s innovation and competitiveness ranking to number one from middle of the pack.

CATA CEO, John Reid, said,  “ A Canadian SBIR (CSBIR) Program would allow new and small businesses to use government funding to develop early stage technologies to the point that they can be evaluated and supported by private capital markets,” adding,  “By overcoming market failure in the development and financing of early stage technology, a CSBIR program will foster new commercial activity and help produce otherwise absent innovations that benefit society.”

Background on the U.S. SBIR Model

The U.S. Small Business Innovation Research (SBIR) Program supports Research and Product Development in small companies with fully-funded grants and contracts.  Phase 1 is a proof-of-principle stage ($250,000 for six months), Phase 2 (up to $1M for two years) supports development of a commercial prototype, and Phase 3 is funded by the company with SBIR help for raising funds.  Over half of the projects that complete Phase 2 actually reach the marketplace.  Since its birth in 1977, the program has grown until today $2.2B is set aside annually to support the program.  Overhead for the program is less than 5%, so most of these funds support panel-reviewed projects inside small companies.  Multiple awards are possible and not uncommon.  The SBIR program is called “America’s Seed Fund” for good reason!

CSBIR projects are chosen for funding by sector-related panels composed of representatives of business, industry, academia and government.

A majority of the research and product development should be performed inside the company and all research funded by the grant should be performed inside Canada.  Overhead should be limited to 5%, and this can be accomplished by using the NSERC model, inside an over-arching Industrial Research and Innovation Council, as proposed by Jenkins et al in “Innovation Canada, A Call to Action”.

The SBIR program has served as a model for the establishment of similar programs in Australia, Finland, Japan, the Netherlands, South Korea, Sweden and the UK.


Potential Benefits to Canada

A CSBIR Program would unlock the value in Canada’s world-class university and institutional R&D in many ways, such as:

  • Supports founding high-tech companies

  • No matching funds requirement making it much easier to start a company

  • Fits into the already-existing network of Accelerators for commercializing hardware-based inventions

  • Government has already supported PhD-level R&D in universities and institutes – this continues that support into industry

  • Increases the number of PhD-level scientists working in industry and the quality of industrial research and product development

  • Increases BERD (Business Expenditures on R&D)

  • Supports development of “tool” companies – those that make hardware-based products, e.g. optical instrumentation, medical imaging instruments, etc., increasing Canada’s manufacturing strength and improving healthcare

  • Enables university-based researchers to found a company without having to give up equity rights from the start

  • Helps the Canadian VC industry by providing more mature companies with at least a partial management team and a first product, perhaps even a first customer, before their first investment

TEDdixson.jpgTechNOW interview on CSBIR with A.E. (Ted) Dixon, a business leader and CATA National Innovation Leadership Council member

Dan Wasserman, Founder,
Mammoth Health Innovation Makes the Case for a Canadian SBIR Case Dixon, concluded, “ A CSBIR Program would go a long way to grow research inside small companies, would increase the number of PhD-level company researchers (only 18% of Canadian companies that performed R&D used PhD-level scientists according to a recent survey), and would increase the number of startups based on already-funded university research.”

++ Action Item

Mobilization & Engagement: If you have an individual or organizational interest in collaborating with CATAAlliance to advance a Canadian SBIR Program, please contact CATA CEO John Reid at  

Please socialize this communique to your network of social and business contacts, including media.

About CATAAlliance

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The Canadian Advanced Technology Alliance (CATAAlliance) is Canada's One Voice for Innovation Lobby Group, crowdsourcing ideas and guidance from thousands of opt in members in moderated social networks in Canada and key global markets. (No Tech Firm Left Behind)

Contact: CATA CEO, John Reid at