Environmentally-friendly vehicles have come a long way in terms of technological advancement and efficiency, but as with anything, there’s always room for improvement. The Automotive Innovation Fund (AIF) is a new program that aims to do just that by providing funding for vehicle and powertrain assembly operations associated with significant automotive innovation to support large-scale research and development (R&D) projects to build innovative, greener and more fuel-efficient vehicles.

It’s no secret that the Canadian manufacturing sector has struggled in years gone by, which is why taking advantage of programs like AIF is so important. The program benefits automotive companies by contributing to the long-term economic benefit for Canada, including job creation and retention. With the fund providing automotive firms $250 million over five years, this will be a much needed boost for Canada’s automotive companies; however, in order to obtain funding companies must adhere to strict qualifying activities that provide extensive automotive innovation and R&D initiatives to develop greener, more fuel-efficient vehicles including:

• new product development (e.g., advanced emissions technologies, energy-efficient engines and transmissions, advanced materials, including engineered plastics, and lightweight components and materials);
• leading-edge engineering and design, and prototype development;
• advanced product testing that ensures cleaner, more efficient automotive performance, and reduces greenhouse gases;
• development of new production methods and process technologies, including advanced flexible manufacturing techniques;
• new or expanded facilities to produce leading-edge and more energy efficient vehicles and powertrains;
• substantive investments in new flexible manufacturing processes; and
• introduction of other new transformative production technologies to substantially increase productivity and efficiency (e.g., robotics and advanced IT systems).

While Canada is certainly not the worst offender in terms of fuel-consumption, averaging about 34 MPG in 2010 compared to the United States’ 26 MPG, we are still far behind Europe and Japan’s values of 47 and 43 MPG, respectively. Given time, the Automotive Innovation Fund may be Canada’s answer to bringing our numbers in-line with the current leaders in the fuel-economy arena.

This past weekend, I went away on holiday. Or rather, I went away for four days of intense, overwhelming-to-all-the-senses, crazy obsessive fangirlish journey to San Diego. San Diego ComicCon 2010 was happening, and I was determined to have my first experience of the four-day-long scifi/comic book/etc convention.

And it was crazy, and awesome, and intense, and all kinds of brilliant.

One of the most exciting parts was walking around the exhibition floor, seeing all the different toy and collectible manufacturers with new products that they are bringing out in the near future. Some of these items will be available in the upcoming year, but some of them are just preliminary prototypes that the companies will be modifying and improving on before bringing out the finished products.

The process for manufacturing toys and collectibles, if you look at the basic steps, isn’t too different than manufacturing anything else. And having prototypes can be a great benefit to your Scientific Research and Experimental Development claim.

Developing a prototype is a part of the iterative process that SR&ED projects typically follow – design, prototype, testing, redesign, prototype, testing, and so on, until the final objective is reached. By keeping these prototypes that you have made, you have evidence for the CRA (should a review occur) that there was systematic investigation and experimentation done during your SR&ED project.

The general purpose of market research is to provide the organization with relevant, accurate information about it’s consumers and the competitive environment. This benefits a company in many aspects of the business, and can ultimately save the company time, effort and money.

Benefit #1 – You get to know your customer
When first starting a business, or launching a new product, you first need to determine if there is a market for this product or service. This is where market research comes in. By completing surveys, collecting statistics and product testing, you will learn who will use your product, where they are, what they like, and where to advertise that will get their attention. Often if you test the product with your target consumer, you will discover ways that consumers use your product that you hadn’t even considered – which in turn builds your marketing and aids in advertising endeavors.

Benefit #2 – Referrals
In completing your market research, you will have developed a database of names, addresses and phone numbers. Not only are these people that participated in your surveys, these are your customers, and your sales people! After completing a survey if you were to send out a simple “thanks for participating” postcard, you’ll leave an impression with this consumer. Not only will this make them more likely to buy from you, either for the first time or again, but if your product is successful, they will refer friends and family to it. Word of mouth is a wonderful thing, and market research is another way to get your name out there.

Benefit #3 – Enhanced Products
Market research can help you to determine more about your consumer, but it can also tell you more about your product. What would your customers change about your product? Is the packaging keeping the product safe, and yet still appealing to them? Is there something missing from the instructions? Market Research can help lead you to product development, and continue to better your company and products.

Benefit #4 – You can save money!!
Market research can save you from making a poor investment. While market research is an investment in itself, spending the time to learn that no one really wants to use aerosol toothpaste isn’t such a bad idea. When you consider the costs of market research, think of it this way – You COULD pay whatever it costs for market research, OR you could spend the money to produce the aerosol toothpaste, it’s packaging, as well as put money into storage, shipping to stores, sales people to find the stores to distribute, and the advertising and marketing campaigns. Which do you think would be more cost effective? Saving yourself from a failed product launch, or dealing with the aftermath?

Remember to keep your market research on the priority list. Some things that appear to be good ideas, are easily rejected by the consumers, and can end up being very costly. While I personally have nothing against clear cola, the market likes what it likes, and brutally rejects what it doesn’t.

Lines of credit have almost completely dried up in this recession, and it’s harder than ever for businesses to fund their new development projects.  Ontario’s Advanced Manufacturing Investment Strategy (AMIS) is a great venue for Ontario manufacturers to pursue. What’s more, AMIS is available to companies from all manufacturing sectors in Ontario. The $500 million dollar provincial program focuses on:

• industrial R&D
• design/prototyping/engineering
• new/ advanced products/materials
• advanced manufacturing processes
• robotics/software development
• waste reduction
• energy conservation

AMIS, when granting a loan, can provide up to 30% of the total eligible costs of a project (up to a limit of $10M). This funding is given in the form of a repayable loan. The loan is interest free and principal free for up to five years, providing the company receiving it meets job and investment targets mutually agreed upon between the company and the province. After that period, the repayment rate is the province’s cost of borrowing, plus an additional 1%.

To be eligible, projects must create and/or retain at least 50 jobs. Alternatively, the projects must invest $10 million over the 5 year period. The costs eligible for the loan (excluding ongoing costs of production or operations) include:

• research and development
• equipment and machinery
• materials
• construction/facility improvements
• training
• overhead
• labour (one time only)

The terms for the loan are negotiated individually. After completing the application process, most companies receive word of the province’s decision within a relatively speedy 45 calendar days. This sometimes may take longer for the more complicated applications. The Minister of Finance, along with the Minister of Economic Development, approve or deny applications based on the guidelines of the AMIS Assessment Committee.

What’s more, for those manufacturers who regularly claim for SR&ED, receiving an AMIS loan has no impact on SR&ED eligibility. The AMIS loan is not affected if a business has already received an SR&ED return or income tax credits.  Companies that have received AMIS funding often include extra cash procured by SR&ED towards their projects. In fact, any business that has received SR&ED credits is more likely to be meeting the AMIS eligibility requirements.

For more information about AMIS, visit http://www.ontariocanada.com/ontcan/en/progserv_amis_en.jsp

Hello Readers,

On Thursday, January 29th, 2009 Northbridge Consultants will be holding our very first free breakfast seminar, to provide a meaningful information session on the SR&ED program. There will be a free, fully catered breakfast  buffet, and the seminar is of no cost to attend.

The primary focus will be to provide a complete, thorough understanding of the SR&ED process, and how companies can use this to take advantage of Investment Tax Credits for work performed within Canada.

The seminar on January 29th will be held at the Cambridge Hotel & Conference Center, in the Dorset Room. The address is 700 Hespeler Road in Cambridge, ON.

Breakfast will be served at from 7:30am, and the seminar will run from 8:00am to 9:30am (with an intermission at the 45 minute mark to allow for a break). The Northbridge team will be staying after the seminar for you to approach us with questions.

The speakers at this event will include:
Sol Algranti, President & CEO of NorthBridge Consultants
Ajay Sinha, VP of Operations of NorthBridge Consultants
Gerry Fung, Account Manager with NorthBridge Consultants
Ashley Demers, Sales & Marketing Specialist with NorthBridge Consultants

also in attendance will be our special guest speakers:
Ken Lancaster, Tax Principal at MacGillivray Chartered Accountants & Business Advisors
Larry Vokes, Community Development Advisor with EMC Canada

To register, or for more information, contact:
Ashley Demers at (519) 623-2486 x 231 or ashley@northbridgeconsultants.com

You may also feel free to pass this information on to anyone you feel may be interested in attending.

Register soon, as seating is limited.

We hope to see you there!