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Canada’s New $100-Million Procurement Program for Technology Startups

Canadian startups are going to be tapped to solve challenges in the federal government as part of a new $100-million initiative.

The Globe and Mail reported the Canadian government is revealing a new program today that will see 20 federal departments and agencies setting aside one per cent of their annual R&D spending to reward contracts to early-stage companies.

Called Innovative Solutions Canada, the procurement program hopes to inject emerging technology into the federal government by purchasing innovative products and services from startups. The initiative also creates a huge market opportunity for early-stage firms who could grow their teams and see their technology commercialized.

While Canada has seen multi-million dollar investments into dozens of startups across the country through the government’s $40-million Build in Canada Innovation Program, departments aren’t required to source technology solutions from early-stage firms—until now.

Under the program, the Globe and Mail reported federal departments and agencies will fund up to $150,000 for a proof-of-concept study and $1-million to fund development of a prototype.

The government initially announced the program in March with a $50-million commitment. The anticipated announcement today will double the budget. The program was modelled after the Small Business Innovation Research (SBIR) program in the United States, a 34-year-old program that mandates federal departments and agencies to reserve part of their R&D budget for small businesses.

Under Prime Minister Justin Trudeau, the federal government has been pushing Canada’s innovation agenda this year, allocating new spending to programs that support entrepreneurs and focusing on keeping talent in the country.

At Google’s Go North last month, Trudeau spoke about Canada’s AI presence, and how investing in emerging technology is vital to the growth of the country as a global leader—and the government is backing their vision with dollars. In March, Ottawa announced a $125-million investment into a national AI strategy.

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