Program Guide

Centres of Excellence for Commercialization and Research (CECR) - 2016

 Program Guide

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• Background of CECR program
  • Program objectives
  • Expected results and outcomes
  • Program criteria
    • I. Benefits to Canada
    • II. Track record and potential of the applicants
    • III. Strength of the business plan
• CECR program competitions
• CECR program requirements
  • Centre eligibility
  • Management and key resources
    • Board of directors
    • Centre director
    • Financial Manager
    • Communications
  • Administrative offices of the centre
• Use of CECR funds
  • Eligible expenses
  • Stacking provisions
  • Support for capital expenditures
  • Equipment
  • Centre staff/ management or applicant-owned companies
  • Contracts with partners
• Administration of CECR grants
  • Funding agreement
  • Transitioning from the grant
  • Policies
• Monitoring and guidance
  • Reporting requirements
  • Major changes.
  • Audit framework
  • The Access to Information Act and the Privacy Act
• Contact us
• Appendix A: CECR eligible expenses
  • Calculating In-Kind Contributions
• Appendix B: Conflict of Interest and Policy Framework
• Appendix C: Environmental Review Requirements and Examples for Centres
• Appendix D: Benefits to Canada
• Appendix E: Principles on the management of funds
• Appendix F: The Access to Information Act and the Privacy Act (ATIP)

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Background of CECR program

The Centres of Excellence for Commercialization and Research (CECR) is a federal grants program designed to support the operation of centres of excellence that bring together people, services and research infrastructure to position Canada at the forefront of commercialization of innovations in priority areas. 

The CECR program is overseen by a tri-agency steering committee (NCE Steering Committee) made up of the Deputy Minister of Industry Canada, the Deputy Minister of Health Canada, the presidents of the three granting agencies [Natural Sciences and Engineering Research Council (NSERC), the Social Sciences and Humanities Research Council (SSHRC) and the Canadian Institutes of Health Research (CIHR)] and the president of the Canada Foundation for Innovation (as an observer).

Day-to-day administration of the CECR program is provided by the Networks of Centres of Excellence (NCE) Secretariat.

The NCE Secretariat runs periodic national competitive processes through which the NCE Steering Committee selects successful centres on the advice of international peer review and a Private Sector Advisory Board (PSAB).

Program objectives

The goal of the CECR program is to create internationally recognized centres of excellence in commercialization in the areas of priority for the Government of Canada to deliver economic, social, health and environmental benefits to Canadians.

The CECR Program funds centres that can build on Canada’s Research and Development (R&D) landscape by matching clusters of academic research expertise with the needs of business, health practitioners and other end users.  The emphasis of the CECR program is commercialization and the ability to become a centre that is sustainable beyond the CECR grant.

In the context of the CECR program, commercialization is defined as the spectrum of activities needed to turn knowledge and/or technology into new or improved goods, processes or services that result in positive socio-economic, health and environmental impacts. Sustainability means that centres are able to continue their core activities beyond the CECR funding by establishing a strong business model and partnerships. Centres have used a range of models to help them toward sustainability, such as partnerships, memberships, other governments’ support, and other revenues generated by a diversified portfolio of new technologies, products and services.

Expected results and outcomes

The aim of the program is to build on existing infrastructure, networks and resources to enhance commercialization capacity by investing in a portfolio of centres that have a strong sustainability plan and that yield the following benefits: 

• Brand Canada as the host of internationally recognized centres of excellence that will yield economic, social, health or environmental benefits to Canadians;
• Draw on existing research and commercialization strength, infrastructure, networks and funding capacity to enhance their impact;
• Attract, retain and provide training to highly qualified personnel (HQP), and internationally recognized business leaders;
• Open up new opportunities for Canadian researchers and firms to access world-class equipment, facilities and networks;
• Create, grow and retain companies in Canada that are able to capture new markets with breakthrough innovations;
• Accelerate the commercialization of leading edge technologies, goods and services in priority areas where Canada can significantly advance its competitive advantage;
• Attract investment (including foreign direct and venture capital investments); and
• Strengthen domestic collaboration and ensure that benefits spill over to a wide array of firms, organizations, sectors and regions of the country.

Program criteria

Applications from new centres, and the ongoing operations of existing centres are assessed against the three selection criteria outlined below.

I. Benefits to Canada

• The extent to which the centre’s research and commercialization activities address issues of high priority for Canada;
• The likelihood that the centre will create sufficient scale and focus to brand Canada as the host of an internationally recognized centre of excellence in its area of priority;
• Evidence that the centre will help accelerate the commercialization of leading edge technologies, goods, services in priority areas where Canada can significantly advance its competitive advantage.

II. Track record and potential of the applicants

• The achievements of the applicants and their ability to contribute to the centre’s research and commercialization objectives;
• The ability of the applicants to attract investment sufficient to meet the program matching requirements and to encourage investment in partner firms.
• The ability of the applicants to support partners, firms and researchers with advice, analysis, training and business services to advance their commercialization objectives.

III. Strength of the business plan

• Excellence, focus and coherence of the research and development and commercialization program;
• The effectiveness of the plan to manage, protect and exploit intellectual property resulting from centre-supported innovation;
• A credible demonstration of how this investment will result in the creation of a self-sustaining, productive centre of excellence;
• The quality of the proposed organizational structure with appropriate representation on the board of directors and management team;
• Evidence that the applicants have in place an accountability framework likely to result in effective leadership, sound financial planning and decision-making. 

 

CECR program competitions

Competitions for CECR funding are launched from time to time. Details about the competition process are available here.

The CECR program uses a comprehensive multi-step review process in which applications are peer-reviewed by Canadian and international experts in specific fields and sectors.

Applications submitted to the CECR program undergo a detailed review by expert panels, comprised of Canadian and international experts. These panels are established by the NCE Secretariat and will evaluate an application according to program criteria, meet with applicants, and produce in-depth written assessments of strengths and weaknesses.

Subsequently, the Private Sector Advisory Board (PSAB), a board of strategic advisors made up of respected Canadian industry leaders, will review the applications and related expert panel reports.  The PSAB provides the NCE Steering Committee with funding recommendations.

The NCE Steering Committee makes the final decisions. There is no appeal process.

 

CECR program requirements

Centre eligibility

Centres must remain not-for-profit corporations and adhere to the CECR funding agreement to continue to be eligible to receive CECR funds. 

Management and key resources

Each centre must have an administrative structure capable of managing a complex research and commercialization organization. The particular structure varies according to the needs and size of the individual centre and will be monitored by the NCE Secretariat.

Board of directors

Centres must appoint a board of directors that has the overall responsibility for its management, strategic direction and financial accountability, including the approval of annual audit and annual/final reports submitted to the NCE Secretariat. The board of directors of the centre is accountable to the NCE Steering Committee for the CECR funds it manages.

The board of directors must consist of no fewer than 12 members. The membership of the board of directors must reflect the interests and concerns of the various stakeholders involved in the centre and also include members with the skills needed to govern the centre effectively.  A majority of the members of the board of directors shall be from the industrial sector and/or the centre’s user community; and a minimum of one-third of the board of directors shall be composed of independent members.

The names and affiliations of the members of the boards of directors and its committees are considered public information. An NCE staff member has observer status on the board of directors of the centre and also attends meetings of the centre's committees. In exceptional circumstances, the NCE Steering Committee may recommend one voting member (not a staff member of a granting agency) to the board of directors.

The centre must advise the NCE Secretariat of any changes in membership of the board of directors during the term of the funding agreement.

Centre director

Each centre has a director or chief executive officer (CEO) who reports to the board of directors. The centre director is responsible for operations and implementation of the business plan of the centre. Other duties may include providing annual and financial reports approved by the board of directors to the NCE Secretariat, recruiting and managing centre personnel, acting on behalf of the centre with the NCE Secretariat and promoting the centre’s objectives and activities to all relevant stakeholders, including the general public.

Financial Manager

The centres are not-for-profit organizations that need robust financial management systems.  The centre is expected to have effective financial monitoring in place.  Centres are evaluated annually on the strength of the detailed financial plans and the robustness of their risk adjusted revenue projections. The financial plan is a key component of a successful centre.  

Communications

The competent management of communications is critical to the success of a centre and the program as a whole. Centre activities, results and accomplishments should also be conveyed to external audiences, including potential participants from all sectors, public policy makers, the media and the general public. Each centre should develop a communications plan with a set of comprehensive objectives and activities designed to enhance interest in the centre and its activities, and to promote the centre and the CECR program to the broad spectrum of sectors that may benefit. Centres are encouraged to produce their publications in both official languages.

The centre's communications activities and messages must be consistent with, and complementary to the CECR program objectives. Centres must acknowledge the contribution of the federal government, and the fact that the three federal granting agencies are partners in the CECR program.

Centres are expected to collaborate closely with the NCE Secretariat communications manager for their communications activities directed to an external audience.

Administrative offices of the centre

The centre must ensure that the administrative centre has suitable accommodation, as well as access to appropriate computer, communications and financial administration systems needed to serve as the administrative secretariat of the centre.

Rental costs and office space can be acquired through partnership contributions, or by securing a host organization. If the centre has a host organization, the host must ensure that the centre has the appropriate accommodation and resources to serve as the centre’s administrative secretariat. These elements can be set out in separate agreements between the host, partners and the centre (as applicable).

 

Use of CECR funds

The centre will follow the rules of the CECR program guide and the rules of the  Tri-Agency Financial Administration Guide.  In the case of inconsistency or conflict between the requirements of the Tri-Agency Financial Administration Guide and those of the CECR program guide, the requirements of the latter shall prevail to the extent of the inconsistency or conflict. The centre will contact the NCE Secretariat to obtain a ruling on specific cases where clarification is required.

Eligible expenses

The CECR program will provide support for the following eligible expenditures:

• operating costs
• salary costs
• knowledge mobilization costs
• commercialization costs

Please refer to Appendix A for a detailed list of eligible and ineligible expenses.

The CECR program is a matching program that requires centres to generate revenue and secure partner contributions to leverage the CECR funding. Contributions over the duration of the funding agreement are in the form of cash and in-kind, and must come from non-federal sources. CECR grant funds used for eligible commercialization costs must be matched by a ratio of 1:1 ; i.e. every one CECR grant dollar spent on eligible commercialization costs must be matched by one dollar of non-federal contributions (in cash or in-kind). CECR grant funds for other eligible costs must be matched by a ratio of 3:1, i.e., every three CECR grant dollars spent on other eligible costs must be matched by one dollar of non-federal contributions (in cash or in-kind).

Stacking provisions

A stacking limit defines the maximum level of total government assistance (federal, provincial, territorial and municipal funding).  The maximum level (stacking limit) of total government assistance for this grant will not exceed 100% of eligible expenses. In the event total government assistance to the centre exceeds the stacking limit, it will be necessary for relevant federal agencies to adjust the level of assistance so that the stacking limit is not exceeded.

CECR funding is administered in the following environment:

• For each grant, the CECR program funds only a portion of the expenditures of the centre to ensure engagement of multiple partners. Centres must seek other sources of funds to finance their work and reach sustainability.
• When a centre is successful in attracting other funding, it will use the additional funds to complement CECR funded activities by conducting additional work, hiring more personnel, or by widening the scope of its activities.
• Centres must have a control framework to ensure that expenditures charged to its accounts are for the purpose intended by the grant.
• Centres must also ensure that the matching contributions required to meet multiple programs are not double-counted 

Centres must provide a statement of other sources of funding with their application, and on a yearly basis. There must be no duplication of funding for the same items. However, when centres are supported by multiple sources, the additional benefits of CECR support must be well explained and justified. The onus is on the centre to provide sufficient information for the NCE Secretariat to monitor the relationship with other sources of support (held or applied for) and to ensure no duplication of funding. The consequence of not providing adequate information could be reduced funding.

Support for capital expenditures

Where centre activities involve capital expenditures that are vital to the success of its commercialization plan, the cost will be considered an eligible CECR expense, provided: capital expenditures for which coverage is requested does not exceed $1 million; and, the total cost does not represent more than 20% of the total eligible expenses for commercialization over the full term of the grant. Expenses related to the construction, purchase, or lease of a building are not eligible expenditures and are not considered to be matching funds.

Equipment

Plans for the lease and ownership of equipment acquired with CECR funds must be included in the centre’s business plan and formalized through agreements and/or contracts. These provisions should detail how the equipment will be used by partner organizations during the funding cycle and if any revenues are expected through user-fees, and also indicate what will happen to the equipment when the funding cycle is complete.

Typically, centres should ensure that any piece of equipment that can be shared among partners have a clear ownership agreement.  The owner should select a fixed location for the equipment and, depending on the mobility of the piece of equipment, prepare a schedule for its accessibility.

Centre staff/ management or applicant-owned companies

Contributions made to the centre by a centre staff/management owned consulting company or sole proprietorship does not qualify as eligible matching funds to the CECR grant. Situations where the centre staff or management member is a part owner are reviewed on a case-by-case basis. The applicant must contact the NCE Secretariat to obtain a ruling on specific cases where clarification is required.

The company’s contribution to the centre and within centre-funded projects is usually considered eligible if the following conditions are met:

• There is significant investment by sophisticated investors, indicating there has been an objective assessment of the commercial potential of the centre’s activities and the company's viability.
• The company has its own facilities, physically separated from those of the applicant (e.g., located off campus or in a university incubator facility).
• The company employs its own professional staff, that is able to receive and incorporate the results of the proposed research, and/or commercialization activities into company operations.
• The company is under the effective day-to-day management control of someone other than the centre staff or management member.
• The company has a board of directors with external members (i.e., some of whose members, including the chair of the board, are at arm's length).
• The commercial activity conforms to the centre's established policies relating to the disclosure of commercial interest and conflict of interest.

Contracts with partners

CECR funds transferred to partners should be in the form of contracts. These contracts should use calls for proposals with all types of suppliers (private sector companies, universities, not-for-profit organizations, or research and development facilities).

 

Administration of CECR grants

CECR grants are administered through the NCE Secretariat. Grants are made for specific purposes. The NCE Steering Committee expects grant holders to use their grant for that purpose and in accordance with the program’s and their institution’s policies and guidelines. The NCE Steering Committee reserves the right to terminate or suspend a grant should the grant not be used for its intended purpose or should the centre cease to meet the terms of its funding agreement. Amounts paid after the expiry of eligibility, or on the basis of fraudulent or inaccurate application, or in error, are subject to recovery action. The NCE Secretariat may withhold an appropriate amount of the total grant payable to the centre until it is satisfied that the centre meets the eligibility criteria of the program.

Funding agreement

Following the announcement of the funding decision, and prior to the release of the award, a funding agreement is signed by representatives of the granting agencies and the centre director, and, if applicable, the designated representative of the host organization. The funding agreement outlines the terms and conditions for funding under the CECR program.

In the event that centres fail to demonstrate adherence to the program’s matching, governance and financial management requirements of either the funding agreement or the CECR program guide, the CECR award may be interrupted or terminated.

Given the multi-disciplinary nature of the centres, funding for a given centre generally comes from more than one granting agency. The NCE Secretariat will be the primary point of interaction for all centres throughout the duration of the funding agreement. Funding disbursements will be managed by the NCE Secretariat and disbursed to the centre against a funding agreement under the legal authority(ies) of the relevant granting agency(ies) NSERC, and/or SSHRC and/or CIHR.

Transitioning from the grant

At the end of the CECR award, centres may be given an extension in time to complete outstanding activities. Funds cannot be committed beyond the term of the funding agreement.

Policies

The Board of Directors is responsible for ensuring that the centre is managed according the rules and regulations of governing a not-for-profit organization. Additional activities specific to an incorporated entity, such as the performance of audits and annual reports to the Canada Revenue Agency, are not under the purview of the CECR program and will be the responsibility of the centre.

The board is responsible for ensuring that the centre obtains appropriate certification for activities that involve agency requirements and legislation for the conduct of certain types of research and development.

The board must ensure adherence to the following policies:

Policies of the Granting Agencies

•  Tri-Agency Framework on the Responsible Conduct of Research.
•  Tri-Agency Financial Administration Guide

Policies of the CECR Program (further details are provided below)

• Conflict of Interest;
• Current or former public office holders or public servants;
• Environmental Assessment;
• Intellectual Property and Benefits to Canada; and
• Management of funds

Conflict of interest

The centre shall adopt a code of conduct in its by-laws for directors, officers, employees and committee members designed to prevent real or perceived conflicts of interest. The code shall be no less stringent than the NCE Conflict of Interest Policy Framework attached as Appendix B.

Current or former public office holders or public servants

Centres that employ or retain the services of individuals who are current or former (in the last 12 months) public office holders or public servants are asked to certify compliance with the Conflict of Interest and Post-Employment Code for Public Office Holders and disclosure of the involvement of former public servants who are subject to the Value and Ethics Code for the Public Service.

Environmental assessment

The board of directors of each centre receiving NCE funds must establish a process for environmental assessment which is comparable to the process established by NSERC in fulfillment of its obligations pursuant to the Canadian Environmental Assessment Act, 2012. Centres should refer to Appendix C of this Guide for an example of the environmental review process. All research and activities approved for funding by the board of directors and that will receive NCE funds shall be reviewed for potential adverse environmental effects.

Intellectual property and benefits to Canada

The centre shall adopt a policy that encourages and facilitates commercialization for the greatest benefit to Canada.

The granting agencies make no claim to ownership of intellectual property from the projects they fund.

Sharing of benefits and costs

Agreements made regarding the ownership of the intellectual property resulting from centre-funded activities must take into account the program objective of creating partnerships. This implies a sharing of eventual benefits between the partners.

Commercialization and benefits to Canada

The industrial partners' contributions to the centre must be recognized by allowing them access to the commercial exploitation of the intellectual property under terms commensurate with the nature and level of their contributions. The arrangements with each corporate partner must be addressed in an agreement.

A key CECR program long-term objective is to advance Canadian economic and social development. Accordingly, every effort must be made to have the results of centre-funded activities exploited in Canada, for the benefit of Canadians. Benefit to Canada is defined as incremental Canadian economic activity and improved quality of life in Canada. Maximum benefits would be derived from the creation of high-quality jobs in Canada, which should be an important goal of any commercialization activity.

The owners of intellectual property resulting from centre-funded activities, or the agent acting on their behalf, will consult with relevant stakeholders on issues of commercialization. When selecting a receptor company for the exclusive license of the commercial rights of intellectual property resulting from centre-funded activities, the agent or owners of intellectual property will use reasonable and thorough efforts to maximize benefits to Canada, including the possible development of new Canadian receptor companies. If there is evidence of negligence on the part of the centre in performing the due diligence, the NCE Steering Committee reserves the right to impose sanctions as it deems appropriate. The Benefits to Canada Working Guidelines are in Appendix D.

Management of funds

Expenditures
The board must ensure that the centre respects the program’s guidelines for Use of CECR Funds.

Uncommitted funds
The CECR funding is provided to the recipient as a grant, which implies that the funds are expected to be used in their entirety over the funding period of the grant. In principle, centres that decide to invest the portion of the funds not yet engaged to cover operating or commercialization expenses (including investment in technologies or spin-off firms) must do so in accordance to investment policies, standards and procedures that a prudent person would exercise in making investment decisions regarding property belonging to others. Centres should refer to Appendix E for the full policy on the principles of the management of funds.

 

Monitoring and guidance

The centre's operations and activities are subject to general overview and monitoring by the NCE Steering Committee through the NCE Secretariat. NCE staff may participate in the resolution of technical, financial or administrative difficulties, and may also provide advice and guidance related to the interpretation of the granting agencies and CECR program's objectives, rules and guidelines. Assistance may also be provided in the coordination of the centre's activities with those of other centres or of other government-sponsored initiatives, including the diffusion of centre achievements.

The granting agencies will designate a staff member to participate, as an observer, in meetings of the board of directors and its committees.  The staff member designated by the granting agencies will provide the board of directors and its committees with clarification on relevant program information related to the CECR program and other programs of the granting agencies.  The centre shall give the granting agencies the same notice as is provided to the members of the board of directors and its committees in advance of each meeting.

The progress of the centre will be assessed annually against the program criteria of the CECR program by a monitoring review process. A monitoring review may result in continued funding, further review, or phasing out of funding to the centre.  In instances where further review is necessary to determine whether to issue continued funding, there may be a requirement for the centre to undergo an in-depth assessment by a panel of experts assembled by the NCE Secretariat who will assess the performance of the centre against the CECR program criteria.

The NCE Steering Committee may, in its absolute discretion, terminate the funding agreement and provide no further funding if the results of the annual review are not to its satisfaction.

Reporting requirements

Centres are asked to provide annual reports to the NCE Secretariat. These reports will be used to determine whether grants are being used for the intended purpose and to monitor progress against objectives.

The granting agencies are accountable for reporting to the Treasury Board and Parliament with respect to the funding they have received for the centres. The CECR program has developed a Performance Measurement Strategy to provide for appropriate measuring and reporting of results which includes a logic model, related performance indicators and a program evaluation strategy. Annual reports collected from the centres will be used to monitor their performance and to inform CECR program evaluations, to produce the program’s annual report, and report to stakeholders and the Canadian public.

Major changes

Upon endorsement by the centre’s board of directors, any major change that would affect the general mission or key objectives outlined in the centre’s initial business plan must be submitted to the NCE Steering Committee for approval prior to implementation.

Audit framework

An internal audit and control framework, and periodic monitoring of the framework must be established by the centre as a function of risk.

The Access to Information Act and the Privacy Act

The CECR program is subject to the federal Access to Information Act and the Privacy Act. (See Appendix F for more details.)

 

Contact us

If you have any question or require additional information, you can reach us at:

Networks of Centres of Excellence
350 Albert Street, 16th floor mailroom
Ottawa (Ontario)
Canada, K1A 1H5

Tel: 613-995-6010
Fax: 613-992-7356
E-mail: info@nce-rce.gc.ca

 

Appendix A: CECR eligible expenses

CECR funds must be spent to further the objectives of the CECR Program and those stipulated in the centre’s Corporate Plan.  In order to assess the eligibility of costs, grantees should refer to the  Use of Grant Funds section of the Tri- Agency Financial Administration Guide. 

Given the specific goals of the CECR program, there are eligible and non-eligible expenses that differ from those found in the Tri-Agency Financial Administration Guide.  Those expenses are specified in the table below.  Eligible Expenses for the CECR Funds are channeled into supporting operating costs of the centre.  These include such expenses as, salaries for the centre’s staff and maintenance of offices in Canada. CECR grant funds used for eligible commercialization costs must be matched by a ratio of 1:1. Every one CECR grant dollar spent on eligible commercialization costs must be matched by one dollar of non-federal cash or in-kind. CECR grant funds for other eligible costs must be matched by a ratio of 3:1. Every three CECR grant dollars spent on other eligible costs must be matched by one dollar of non-federal cash or in-kind. The matching may be in the form of cash or in-kind and must come from non-federal sources.  Funding leveraged by the centres comes from multiple governmental and non-governmental sources.  There must be no duplication of funding for the same items; it is imperative that the additional benefits of CECR support are clear.

In case of doubt and before engaging any funds, please contact your NCE liaison for further guidance.

Calculation of In-Kind Contributions

For all Networks of Centres of Excellence Programs, in-kind (cash equivalent) contributions are defined as cash-equivalent goods or services that represent an incremental expense that the partner would not otherwise incur and which would have to be paid for with network/centre funds if not provided by a partner. In-kind contributions should be relevant and central to the activities or mandate of the network/centre, must be eligible expenses as per the program guidelines and cannot have been used to fulfill the leveraging requirements of other federal programs.

Reporting Guidelines

• The nature of an in-kind contribution and its valuation must be detailed. It is the responsibility of the board of directors to ensure that a proper accounting framework is created to ensure that the reported value for all items is reasonable. The NCE Secretariat may request justification in the case of questionable valuations.
• If there is doubt about the eligibility of an in-kind contribution, the network or centre must seek clarification from the NCE Secretariat. Each case is considered on its merits, and the Secretariat exercises discretion in making the final decision.

Calculation table

The table below is a non-exhaustive list of in-kind contributions, with an indication of how to calculate their value. If in doubt about a particular item, contact the NCE Secretariat.

 

Appendix B: Conflict of Interest and Policy Framework

Interactions between university researchers and the private sector are an essential feature of the CECR program. For the objectives of the CECR program to be achieved, many kinds of interactions among individuals participating in the centre must occur. These interactions may lead to gains and benefits to the individuals participating in the centre and are desirable and natural outcomes of being involved in the centre. Such interactions, however, may place individuals participating in the centre in a position of potential, apparent or actual conflict of interest.

The NCE Steering Committee is the body ultimately responsible to the government, and therefore to taxpayers, for the integrity of all the centres and their operations. The responsibility for implementing and managing the Conflict of Interest Policy Framework, to ensure that centre operations and decisions are not biased by conflict of interest, is that of each centre Board of Directors, which represents the highest authority in the management structure of the centre. The centre Boards of Directors are accountable to the NCE Steering Committee for the effective implementation and management of the Conflict of Interest Policy Framework. Individuals participating in the centre, such as members of the Boards of Directors and advisory committees who do not receive CECR funds, are recognized as playing a unique role in the centres. They bring an important perspective as a result of their particular knowledge, often as representatives of organizations in the field of interest of the centre. Nevertheless, they are still required to disclose any financial interest or position of influence, as described in Section 2.0, in any business in the same area of interest as the centre, other than that of their main employer.

The Conflict of Interest Policy is intended to enable the centre Boards of Directors and individuals to recognize and disclose situations that may be open to question and to ensure that such situations are appropriately resolved. The policy builds upon, and is complementary to, those of the organizations that make up the centre Boards of Directors, the centre investigators and the administrators.

1.0 Definitions

"Administrative Centre" means the central administrative offices of the centre.

"Avoidance" means refraining, or withdrawing, from participation in activities or situations that place an individual participating in the centre in a potential, apparent or actual conflict of interest relative to his or her centre duties and responsibilities.

"Board" means the centre Board of Directors that is responsible for the overall management of the centre and is accountable to the NCE Steering Committee.

"Conflict of interest" means a situation where, to the detriment or potential detriment of the centre, an individual is, or may be, in a position to use research knowledge, authority or influence for personal or family gain (financial or other) or to benefit others.

“CECR” means the federal centres of Excellence for Commercialization and Research program.

“Centre” means a corporation funded under the federal Centres of Excellence for Commercialization and Research program.

"Disclosure" means the act of notifying, in writing, the Board of Directors through the administrative centre of any direct or indirect financial interests and positions of influence held by an individual participating in the centre which could lead to a potential, apparent or actual conflict of interest.

"Divestment" means the sale at arm's length, or the placement in trust, of assets, where continued ownership by an individual participating in the centre would constitute a potential, apparent or actual conflict of interest with the participant's centre duties and responsibilities.

"Financial interest" means an interest in a business in the same area as the centre as described in Section 2.1 of this document.

"NCE Secretariat" means the secretariat through which the federal Networks of Centres of Excellence program, and the CECR program are delivered.

"NCE Steering Committee" means the committee comprised of the three granting agencies' Presidents and the Deputy Minister, Industry Canada, which has overall responsibility for the CECR program (with the President of the Canadian Foundation for Innovation serving as an observer).

"Centre Director" means the awardee of the CECR grant who is also a voting member of the centre Board of Directors.

"Position of influence" includes any position that entails responsibility for a material segment of the operation and/or management of a business.

2.0 Disclosure

Upon joining the centre, each individual is obliged to disclose in writing to the Board, through the administrative centre, any direct or indirect financial interests and positions of influence that could lead to a potential, apparent or actual conflict of interest (examples provided below). In addition, these submissions must be updated whenever the individual's circumstances change in a way that would necessitate a further disclosure. The individual also has the obligation to disclose any potential, apparent or actual conflict of interest when it arises during centre committee or Board meetings so that the committee or Board is aware of the situation and can take appropriate action.

Board members and members of other committees of the centre should identify their interests in all organizations working in the same sector as the centre.

2.1 Financial Interest

It consists of:

• any material stock option (e.g., one percent) or similar ownership interest in such a business, but excluding any interest arising solely by reason of investment in such business by a mutual, pension, or other institutional investment fund over which the person does not exercise control, or
• receipt of, or the right and potential to receive, any income from such a business, whether in the form of a fee (e.g., consulting), salary, allowance, interest in real or personal property, dividend, royalty derived from licensing of technology, rent, capital gain, real or personal property, or any other form of compensation or contractual relationship, or any combination thereof.

3.0 Management of Conflict of Interest

The Board or its conflict of interest sub-committee is charged with the responsibility of managing conflict of interest and determining and implementing the appropriate course of action. This management system is based on disclosure, as described in Section 2.0. All disclosures constitute confidential information that will be available to the Board, or a sub-committee thereof, for the evaluation and resolution of any conflict of interest or allegations of conflict of interest brought before the Board or its conflict of interest sub-committee.

While it is recognized that it may be difficult to completely avoid situations of potential, apparent or actual conflict of interest, complete avoidance or divestment may be required in certain cases. Such divestment should not consist of a sale or transfer of assets to family members or other persons for the purpose of circumventing the conflict of interest compliance measures as directed by the Board.

3.1 Principles

An individual participating in the centre who is involved with, or has an interest in, or deals in any manner with a third party which might cause a conflict of interest, will not be present and participate in any centre decisions, including committee decisions, if the declared potential conflict of interest could influence the decision or actions of the centre. It is the obligation of the individual to declare such potential, apparent or actual conflict of interest before discussions take place so that the committee or Board is aware of the situation, in order to ensure that the individual is out of the room when the discussion and decision process on the item in question are taking place. This course of action should be recorded in the minutes of the meeting.

Any question raised by an individual or company regarding the potential conflict of interest of an individual will be raised at the Board level and must be documented in writing. The Board will determine the extent to which the question should be pursued and in such cases will consult the individual in question. If necessary, the individual will be asked to respond in writing.

3.2 Non-compliance

If an individual is discovered to be in conflict of interest where disclosure and prior approval have not been sought or granted, the Board will require the individual to:

• account to the centre for any gain or benefit made directly or indirectly, arising from an involvement with, or an interest in, or from dealing in any manner with a third party that gives rise to a conflict of interest, and
• withdraw from the involvement, or withdraw from the centre, or
• take appropriate action as determined by the Board.

4.0 Review Process

An individual may request in writing, within 30 days, a review of a Board‘s decision on conflict of interest. In certain circumstances, the Board may arrange for an independent third party appointed by mutual agreement of the centre and the Board and, failing such mutual agreement, appointed by the NCE Steering Committee to act as an intermediary to scrutinize reports and budgetary information on project(s) in which the individual participating in the centre is involved. The intermediary would provide an opinion on the overall merit of the review, without divulging specifics of a proprietary nature to other members of the centre. The ultimate decision on the resolution of the review rests with the Board.

In cases where there is a concern with respect to decisions or actions of the Board itself, this concern should be submitted in writing to the NCE Steering Committee. The NCE Steering Committee may request the Chair of the Board to respond in writing to the Steering Committee. Following submission of the Chair's response, the NCE Steering Committee will decide on follow-up action.

Examples of Conflict of Interest

The following examples, although not comprehensive, illustrate situations that may lead to an indirect or direct conflict of interest:

• Employment in any capacity by another employer outside the participant's, administrator's or director's organization, corporation or company signing the centre agreement, including self-employment.
• Holding an office that puts the individual in a position to affect decisions, such as manager with executive powers, within a company, or member of a board of directors.
• Participating in a research contract, business contract or consultancy relationship with a company, or serving on the board of a company.
• Entering into a research contract and/or business contract with a company in which the participant, or a member of his or her immediate family, has a financial or other interest.
• Carrying out supplementary professional scientific or business activities in accordance with the disclosure requirements of the participant's or director's employing organization.
• Ownership of equity or other financial participation in a corporation (including stock options and shares). Participants, administrators and directors should abstain from activity in which they would have inside advantage (e.g., purchase of shares) based on the information they are privy to through membership in the centre.
• Accepting gifts (other than some minor hospitality) or special favors for the individual or a family from private organizations with which the centre does business.
• Influencing the purchase of equipment or materials for the centre from a company in which the participant, the administrator or the director has a financial or other interest.

 

Appendix C: Environmental Review Requirements for NCE networks, centres and recipient organizations receiving NCE funds

Requirements;

Where applicable,  NCE recipient organizations (e.g. organizations receiving IRDI, NCE, BL-NCE and CECR grants),  must comply with the  Canadian Environmental Assessment Act ( CEAA 2012) by ensuring that activities supported with NCE funds are not likely to cause significant adverse environmental effects  in areas within federal jurisdiction, and must develop a review process as follow:

• Boards of Directors responsible for approving the proposals to be funded must ensure that an environmental review is in place and is being implemented. NCE recipient organizations can establish their own process according to their own situation, e.g., a Board may choose to carry out the environmental review itself or to delegate this task, by appointing a sub-committee or hiring consultants who will submit their recommendations to the Board.
• New activities funded by NCE recipient organizations, or ongoing ones where the methodology has changed significantly during the course of the funding period, are subject to assessment or review under the  CEAA 2012 when they fall within the definition of either “designated projects” or “projects” ( sections 67-68, CEAA 2012).
• NCE funds shall only be released to applicants after proposals have undergone an environmental review and if it has been determined that no significant adverse environmental effects are likely.  If the environmental review has not taken place at the time of the grant approval by the Board, the grant can be made conditional on a favorable environmental review.
• An environmental report must be submitted annually by the NCE recipient organizations to the NCE Secretariat summarizing the environmental review process adopted by the Board and the results of the reviews done during the year (e.g. including information on new proposals, or on-going research or activities that required a more detailed environmental review, modification or cancellation).

Example:

• The self-identification process detailed in the  NSERC`s Guidelines on Environmental Review and Assessment, and the  NSERC’s Environmental Information Form or the  Form 101, Appendices A and B Environmental Impact checklists). can be used as an example of how relevant information can be collected from applicants.

 

Appendix D: Benefits to Canada

Working Guidelines

A key CECR program objective is to advance Canadian economic and social development. Accordingly, every effort must be made to have the results of centre research and/or commercialization activities exploited in Canada, for the benefit of Canadians. Benefit to Canada is defined as incremental Canadian economic activity and improved quality of life in Canada. Maximum benefits would be derived from the creation of high quality jobs in Canada and this should be an important goal of any commercialization activity.

The owners of intellectual property resulting from centre research and/or commercialization activities, or the agent acting on their behalf, will consult with relevant stakeholders on issues of commercialization. When selecting a receptor company for the exclusive license of the commercial rights of intellectual property resulting from centre research and/or commercialization activities, the agent or owners of intellectual property will use reasonable and thorough efforts to maximize benefits to Canada in a national and international context, including the possible development of new Canadian receptor companies. Due diligence in efforts to maximize benefits to Canada depends, in part, on the nature of the commercialization activities and on the window of opportunity. The agent/owners of intellectual property resulting from centre research and/or commercialization activities should take the following non-comprehensive list of possible benefits to Canada factors into consideration in exercising that due diligence:

• Existing company and/or not-for-profit corporation in Canada with receptor capacity.
• Expansion of an existing company in Canada.
• Formation of a new company and/or not-for-profit corporation in Canada.
• Joint ventures or strategic alliances with a company and/or not-for-profit corporation in Canada.
• Co-manufacturing involving a company in Canada.
• Cross-licensing or co-development with a company in Canada.
• Establishment of a new subsidiary in Canada (R&D, manufacturing, sales, marketing, distribution).
• Development and/or production in Canada by a foreign company (world
  product mandate).

Mechanism for Reporting Due Diligence

Within 30 days of a decision to pursue exploitation by a foreign company, and in advance of finalizing this decision, the agent/owner is required to report the decision to the centre Board of Directors, and through the centre Board of Directors, to provide the NCE Liaison with the rationale and circumstances that led to the decision. The NCE Steering Committee reserves the right to impose sanctions as it deems appropriate, if there is failure to comply with these reporting requirements or negligence in performing the due diligence, on the part of the centre.

 

Appendix E: Principles on the management of funds

The CECR funding is provided to the recipient as a grant, which implies that the funds are expected to be used in their entirety over the funding period of the grant.  In principle, the centres that decide to invest the portion of the fund not yet engaged to cover operating or commercialization expenses (including investment in technologies or spin-off firms)  must do so in accordance to investment policies, standards and procedures that a prudent person would exercise in making investment decisions regarding property belonging to others.

The Recipient shall ensure that the principal amount of the Fund that has not been disbursed or committed be invested in accordance with a Prudent Person Principle.  Investment decisions shall be made with the principal objective being the preservation of capital to meet future disbursement requirements.

The Investment policy of the centre and all investment decision fall under the purview of the centre’s  Board of Directors.  The Board shall regularly be made aware of any significant financial risks facing the centre, including the consequences of potential significant losses of investments of any of the Fund.  The Investment Policy of the centre shall be reviewed no less frequently than annually.  The centre’s policy should include the following components:

• long‑term return objectives and expectations;
• diversification policy of the Fund's investment portfolio, including various quantitative limits on investments;
• asset allocation strategy including specific range for short‑term fluctuation for each asset class and the long‑term targeted asset mix
• permitted investment instruments and trading activities;
• prohibited investment instruments and trading activities;
• liquidity policy outlining how the Fund's liquidity needs will be addressed;
• risk management policies outlining procedures to manage and mitigate various types of risks that the Recipient faces;
• policy on the lending of cash or securities; and
• performance measurement and monitoring procedures;

Conflict of interest concerning investment management.

(a) The Board shall ensure that all investment advisors or portfolio managers who are involved in the investment management of the Fund disclose in writing, on a timely basis, the nature and extent of his/her interest, including any material interest in any entity that is a party of a transaction with The Recipient

(b) The Board shall also ensure that The Recipient’s conflict of interest policies and procedures cover, among others, voting, prohibited transactions, continuing disclosure and avoidance standards. 

Borrowing.

The Recipient shall not encumber the Fund in any way, including, but not limited to, encumbrances in any way connected to (i) borrowing money; (ii) issuing any debt obligations or securities; (iii) guaranteeing any debt or other obligation of a person, mortgage or other entity; or (iv) pledging all or any portion of the Fund by way of security for payment to any creditor.

Investment holdings in foreign currencies.

The centre shall not invest in securities that are not denominated in Canadian dollars.

Permitted investments.

The Recipient may invest the Fund's assets in the following:

• Bank certificate of deposit;
• Banker's acceptance;
• Treasury bills, commercial paper and other short‑term securities, bonds and notes issued by the federal government, provincial governments, municipal governments and corporations;
• Asset‑backed securities; and
• Mortgage‑backed securities.

Prohibited investments and trading activities. 

The Recipient undertakes not to engage or invest the Fund's assets in the following:

• Equities or shares issued by any corporation;
• Hedge funds or funds of hedge funds;
• Fixed‑income instruments rated below A‑ by Standard & Poors or Fitch Ratings, A3 by Moody's or A‑ by DBRS;
• Derivatives or any instruments that have derivative holdings or features;
• Non‑marketable securities;
• Commodities;
• Repurchase agreements against securities which are not permitted to be held in the portfolio; and
• Margin transactions or any form of leveraging.        

 

Appendix F: The Access to Information Act and the Privacy Act (ATIP)

The Access to Information Act gives Canadian citizens and people present in Canada a limited right of access to information in federal government records. The Privacy Act gives these same individuals a limited right of access to personal information about themselves held in government records and sets out rules and fair practices for the management of personal information by federal institutions. All information collected and generated in the context of the Networks of Centres of Excellence (NCE) programs under the control of the NCE Secretariat and the granting agencies is subject to these laws.

It is important to remember that the Access to Information Act and Privacy Act (ATIP) is intended to complement, not replace, established channels of communication. The NCE Secretariat promotes open, informal communication with the research community and with the public. Contact the NCE Secretariat before using the acts.

The Access to Information Act

A requester seeking access to NCE Secretariat records under the Access to Information Act must write to the ATIP Co-ordinator at the Natural Sciences and Engineering Research Council of Canada (NSERC), providing a precise description of the records sought and enclosing an application fee ($5.00 at the time of this writing). Submitting a request does not guarantee that a requester will gain complete access to the requested records. The Act sets out specific exceptions and exemptions that apply in responding to such requests. For example, personal information about identifiable individuals or proprietary technical information submitted in confidence by researchers or companies would not be disclosed. Moreover, if a request requires a lengthy search or involves a large number of records, a requester could be asked to pay additional fees to help cover the processing costs.

More information about the Act can be obtained from the NSERC Access to Information and Privacy Co-ordinator (see below), the ATIP Web page (http://www.tbs-sct.gc.ca/atip-aiprp/index-eng.asp), or from Info Source, a published register of federal information holdings available in most large libraries and available at
 www.infosource.gc.ca.

The Privacy Act

The Privacy Act gives people in Canada certain rights with respect to personal information about them held by federal institutions. For example, institutions must inform people from (or about) whom they collect personal information, how it will be used, and to whom it will be disclosed. Personal information may be used only for the purposes for which it was originally collected or for uses consistent with that purpose. The Act also contains a procedure for requesting the correction of inaccuracies in personal information.

Making a request under the Privacy Act is similar to making one under the Access to Information Act, except that there are no fees associated with requests to access personal information. The Privacy Act sets out limits to the right of access similar to those contained in the Access to Information Act. For example, unless otherwise set out in advance, a person requesting access to personal information about themselves would not be given access to personal information about another individual.

Use and Disclosure of Personal Information Provided to the NCE Secretariat

The decision-making processes related to applications received by the NCE Secretariat are subject to more publicity than traditional grant or scholarship applications made to individuals. Applicants, co-applicants and other participants, including members of boards of directors, managers and other key players, should be aware that their names and affiliations will be accessible to the public. The NCE Secretariat routinely publishes and disseminates certain details about successful applications. These include the names and affiliations of applicants and co-applicants, the amount of the total award and any conditions attached to that amount, and summaries prepared by the applicant or by the NCE Secretariat for public reference. A summary of each application recommended for funding, is also publicly disseminated.

More detailed personal information about applicants and prospective administrators collected by the NCE Secretariat programs is used to review applications, to administer and monitor awards, and to promote and support research. Consistent with these purposes, applicants should also expect that personal information collected by the program might be used and disclosed in the following ways:

• As part of the review process, applications are disclosed to selection committees composed of experts recruited from the academic, private and public sectors. Applications may also be transmitted to external referees, to members of ad hoc review committees or to site visit committees for review. Individuals recruited by the NCE Secretariat programs to participate in these review activities are instructed to protect, and treat as confidential, all information entrusted to them.
• The substance of expert reviews and the comments of selection committees about an application are accessible to all co-applicants even though reviews may occasionally include comments about a particular co-applicant. Normally, NCE Secretariat staff provide these assessments as feedback to the principal applicant only; it is expected, however, that he/she will share it with co-applicants.
• The NCE maintains a separate database, for the information collected through the annual reporting mechanisms of the different NCE Secretariat programs. Information collected is available to members of the NCE Management and Steering Committees or their delegates who are affiliated with a granting agency or other partners of the NCE Secretariat including Industry Canada, Health Canada, the Canada Foundation for Innovation, the Canadian Institutes of Health Research (CIHR), the Social Sciences and Humanities Research Council (SSHRC), and NSERC.
• Because of the relationship between the NCE Secretariat and its partners, staff of the NCE Secretariat are usually aware of other applications submitted by the same applicants or groups to other programs within the partners. For the purposes of adjudication and award administration, selection committees may be provided with information of co-applicants' applications and awards in all programs. In cases when, for example, there is a question of possible overlap in the support of the same research activity by two or more programs, an application submitted to one program may be used during the review of an application submitted to another program. NCE Secretariat staff may also disclose the contents of applications to program staff in the agencies for the purposes of determining the most appropriate source of funding, jurisdiction, or to monitor overlap in federal support.
• The NCE Secretariat and its partners may use personal information about applicants in their files and databases to identify prospective committee members and reviewers for specific grant applications, planning and evaluation purposes, audits, and to generate statistics for these activities. The agencies may also use the information in their files and databases to generate distribution lists in order to disseminate publications and other information to the research community.
• Data on the gender of applicants is collected by the NCE Secretariat on a voluntary basis only. While gender data on specific individuals is not used in the adjudication process, it may be used by the NCE Secretariat or its partners to promote the increased participation of a specific group in programs and on committees.

Applicants and participants in the NCE Secretariat programs are subject to the  Tri-Agency Framework: Responsible Conduct of Research and their personal information may be used and disclosed consistent with this policy.

Information Provided to the NCE Secretariat

Information provided to the NCE Secretariat is subject to the Access to Information Act and the Privacy Act. Grant applicants and recipients are encouraged to separate information not related to the grant from meetings and documentation available to the NCE Secretariat and its representatives. Furthermore, applicants and recipients should adopt the practice of labelling information as confidential when the information contains:

• trade secrets;
• financial, commercial, scientific or technical information considered confidential;
• information that could result in a material financial loss or gain or impact a competitive position; and
• information that could affect contractual or other negotiations.

Annual Reporting Information

Throughout the grant period, recipients of grants are required to provide information to the NCE Secretariat. The information collected is consolidated across the relevant NCE program(s) to generate statistical information, update operational requirements and identify best practices that may be used by staff and committees. Information used in public reports and publications is discussed in advance with grant recipients.

Non-Disclosure and Confidentiality Agreements

Representatives of the NCE Secretariat will not enter into separate non-disclosure and/or confidentiality agreements.

For further information on the above acts, please contact:

ATIP Coordinator
Natural Sciences and Engineering Research Council of Canada
350 Albert Street
Ottawa, Ontario  K1A 1H5
Telephone: 613‑995‑6214
Fax: 613‑992‑5337

 

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Footnotes

1. The  Infrastructure Operating Fund (IOF) helps cover a portion of the operating and maintenance costs to ensure optimal use of CFI-funded infrastructure.