Technology Partnerships Canada Year in Review 2002-2003

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Investing in Canadians with Great Ideas

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Cat. No. Iu155-2003
ISBN 0-662-67852-4


In This Report You Will Learn About

  • Technology Partnerships Canada's (TPC's) mandate and track record for making smart public investments in new technology projects to support innovations that benefit Canada and Canadians.
  • How TPC helps companies develop innovations in Canada and become world class in key technology areas.
  • TPC's growing portfolio, which this year included the most new investments in a single year since TPC was established in 1996.
  • The challenges and achievements of TPC's client companies in 2002-2003.
  • The status of repayments in TPC's portfolio in 2002-2003.
  • The benefits TPC's investments have produced by stimulating private sector investments in innovation and technology solutions that boost productivity and help Canada achieve important quality-of-life goals.
  • The innovation challenges Canada faces, and how TPC plans to evolve to further support innovation and help make Canada a world leader in developing leading-edge technologies and processes.

Investing in Canadians with Great Ideas

Technology Partnerships Canada (TPC) representatives meet with inventors,entrepreneurs and business people from all parts of the country and allsectors of the economy, who bring forward exciting investment opportunities inCanadian research and development. Fundamentally, TPC invests in people -energetic and visionary Canadians who dream about how to solve problems, savelives, protect the environment and change the world for the better. Thesebrilliant, hard-working Canadians, who are determined to produce and bring tomarket the innovations that will help Canada's economy grow, create jobs andimprove our day-to-day lives, are TPC's clients. On behalf of the Governmentof Canada and all Canadians, TPC is proud to be able to help them turn theirideas into solutions that benefit us all.

Message from the Minister

As the new Minister of Industry, I am pleased to release the Technology PartnershipsCanada Year in Review 2002-2003.

Over the past year, Canadians have learned that their economy has the strength andresilience needed to withstand extraordinary global shocks and economic turbulence.Building on success, Canada must confidently continue to improve its position.The Government of Canada has set the goal of moving from 14th to among thetop five countries in the world in research and development performance.

We have made great strides in strengthening Canada's science and technologysector through the funding of basic research during the past decade. My goal is tocontinue these efforts to ensure that Canadians enjoy the best quality of life, andthat Canadian companies get the maximum economic benefit. Innovative Canadiancompanies continue to face great challenges in bringing their products into themarketplace. We will be more aggressive in our efforts to move intellectual propertythrough the pre-competitive stages to commercialization. We are encouraging theprivate sector to lead, with the Government of Canada as a catalyst for turninggreat Canadian ideas into real-life applications.

A high quality of life requires an innovative economy, smart government and smartprograms. The Government of Canada is creating an environment where Canadianbusiness can easily bring new methods and ideas into the marketplace in a timelymanner, and where government supports commercialization of university researchand small business access to markets. Technology Partnerships Canada (TPC) is acritical part of this environment.

TPC seeks out creative technologies wherever they occur. Risk is part of innovationin the global economy, but the greater risk is not being at the forefront of innovation.It is only through new discoveries and new technologies that we will solve problemsand protect and enhance our health, our environment and our quality of life.

In 2004, I intend to launch the TPC Strategic Review. The Review will ensure TPCis meeting its current objectives, and will identify the outcomes of its efforts. Itwill also ensure TPC is able to provide sufficient support to emerging new strategictransformative technologies in areas such as biotechnology, nanotechnology, andenvironmental and health sciences.

Lucienne Robillard
Minister of Industry and Minister responsible
for the Economic Development Agency of Canada for the Regions of Quebec

Message from the Executive Director

Through the Government of Canada's Innovation Strategy, Canadians and Canadiancompanies have confirmed their strong support for the work of TechnologyPartnerships Canada. They expect us to do more and to concentrate our effortswhere they matter most to Canadians.

We made more investments in 2002-2003 than in any other single fiscal year sinceTPC's inception. At the same time, we enhanced our support to small and medium-sizedenterprises (SMEs) - 92 percent of the projects we supported were with SMEs.Repayments have more than doubled relative to those received in 2001-2002 andwill continue to grow significantly over the next several years.

As I mentioned last year, we are taking concrete steps to improve our program deliveryand our decision-making processes. We are streamlining our procedures and processesto accommodate the constraints and operating realities facing our clients. As well,our assessment of results has moved beyond focussing on jobs and dollars to lookingat other important public benefits for Canadians.

We at TPC are expanding our focus to better include transformative technologies withthe potential to revolutionize processes in everything from health care to farming.We have also extended our reach into all regions of the country, to increase both ouraccessibility and the diversity of the innovation projects we support. Meanwhile,we will continue to support world-class Canadian companies in maintaining theirglobal leadership positions, while seeking strategic opportunities for Canadiancompanies in traditional industries to help these industries' successful transitionto the new economy.

Our main goal of supporting pre-competitive innovation excellence in Canada hasnot changed - we are strengthening our capacity to capture opportunities forCanadians and to ensure that the benefits of innovation extend throughout Canada'seconomy.

Jeff Parker, Executive Director
Technology Partnerships Canada

Continuum of Investment in Innovation by the Government of Canada

Basic Research Applied Research Technology Development Research Production and Marketing
  • Universities
  • CFI
  • Granting Councils
  • Federal Labs
  • NRC
  • CSA
  • R&D Tax Credits
  • TPC
  • IRAP
  • Regional Development Agencies
  • BDC
  • EDC
  • CCC
  • BDC - Business Development Bank of Canada
  • CCC - Canadian Commercial Corporation
  • CFI - Canada Foundation for Innovation
  • CSA - Canadian Space Agency
  • EDC - Export Development Canada
  • IRAP - Industrial Research Assistance Program
  • NRC - National Research Council Canada
  • TPC - Technology Partnerships Canada

Our Mandate and Portfolio

"This TPC investment will have far-reaching benefits. Pratt & Whitney Canada has forged strong partnerships with more than a dozen universities across Canada in the various fields of research and development that exist in Canada. This is an important, essential element that is at the heart of existing research and development in Canada." Nabil Esmail, Dean of the Faculty of Engineering and Computer Science at Concordia University

Our Mandate

TPC makes strategic investments inprecompetitive development projects.We invest in the great Canadian ideasand innovations that are key to Canada'seconomic health and prosperity.

TPC is a modern instrument forinnovation, with the flexibility to captureemerging investment opportunities, whereverthey occur, for the economic, social andenvironmental benefit of all Canadians.

Canadian industries take the lead inbringing innovation forward to the marketplace.TPC acts as a catalyst, investingstrategically to accelerate the successfuldevelopment of key technologies that willbenefit Canadians in their everyday lives.

The TPC program complementsother Government of Canada programsto help Canadian industry overcome thehurdles involved in bringing proof-of-conceptideas to the marketplace. Theprogram is an important instrument inassisting Canadian industries across a widespectrum of technological development.

Our Portfolio Approach

TPC invests in a wide array of good ideasin many sectors of the economy. Thisportfolio-based approach allows it to dotwo important things: manage risk bydiversifying its activity in the economy; andselect projects where there are significantbenefits for both economic growth andquality-of-life enhancements.

Supporting technology is inherentlyrisky. How and when even the most brilliantideas become profitable is determined bya number of factors, including: the generalperformance of the economy; the willingnessof other investors to support the testing,manufacture and marketing of the innovation;and, market demand for the productor process.

TPC manages risk by investing in ashare of the costs of research and development(30 percent on average) in differentprojects spread across sectors ranging fromenvironmental technology and biotechnologyto aerospace, marine and wirelesscommunications. Some investments deliverhigher returns than expected; others performon target, and a few do not. But a diversifiedand well-managed portfolio of investmentsmeans TPC protects the public's interestssince risks are contained within the portfolio.

The portfolio approach means TPCcan be strategic and target technologieswhich offer significant growth opportunitiesin terms of commercial activity and jobs, aswell as broader public-policy benefits. Forexample, backing promising new technologieswith the potential to improve the efficiencyof production processes in traditional sectorsmeans TPC's investments contribute to theGovernment of Canada's efforts to improveproductivity performance across the entireeconomy. TPC also helps speed up theintroduction of innovations that can improveindustrial competitiveness such as innovationsreducing toxic waste and emissions, andenabling workers to gain new skills so they canperform higher-value and more rewarding work.

At the same time, TPC supportsinnovation in emerging technologies, wherecompanies in Canada have the potential tobecome world class. There are enormouspotential quality-of-life benefits that can beachieved in many of these technologies. Forexample, in biotechnology, TPC supports anumber of projects that promise a newgeneration of less-invasive approaches fortreating diseases prevalent among theelderly, such as cancers, respiratory ailmentsand Alzheimer's. These innovations wouldnot only mean better and more-effectivetreatments for patients, but would havea positive impact on the affordability ofCanada's universal, publicly-fundedhealth care system.

TPC also looks for opportunities tosupport projects that are associated withan existing or emerging industrial cluster.Clusters are typically found in a communitywhere there is at least one established publicresearch institution (such as a university,government lab or research hospital), astrong entrepreneurial base, and a networkof interdependent firms all working in arelated industrial field. While highlylocalized, the result is a critical mass ofinnovative capabilities and entrepreneurshipwith extraordinary potential to growand compete in a specific niche in theglobal economy.

TPC exercises a rigorous process ofdue diligence in selecting and evaluatingprojects, which means the agency learnsabout the technologies Canadian companiesare developing, what these companies need toexcel, and where and how government canplay a supportive role.

For a country with Canada's comparativelysmall population but an open, dynamicknowledge-based economy, and highlyeducated workforce, TPC is an internationalmodel of a public instrument encouraginginvestment in innovation.

Furthermore, TPC selects projectsbalancing a range of potential benefits andconsiderations beyond just commercialviability and the creation and maintenanceof high-quality jobs. Advancing Canada'sknowledge base, improving the technologicaland strategic positioning of firms involvedin R&D, strengthening the Canadian innovationsystem, broadening and deepeningCanada's R&D capacity, and makingadvancements in health and safety are buta few examples of key policy benefitstargeted by the TPC program. This focus helpsensure that innovation in Canada supportsimportant areas and has lasting effects,which will, in turn, contribute to improvingindustrial productivity and competitiveness,sustainable development, quality of life, andthe quality of our environment.

Key Drivers for TPC Investment Decisions:

  • The potential to strengthen Canadian capabilities in critical strategic sectors, such as aerospace and defence, where companies developing innovations in Canada are already considered, or are becoming, world class.
  • The potential to meet key goals that affect quality of life in areas such as climate change, sustainable development and health.
  • The potential to attract investments in areas that can lead to productivity improvements and innovation in other sectors of the economy - for example, boosting agricultural production through biotechnology, and improving production and distribution processes through the rapid exchange of large amounts of data via broadband wireless communication technologies.

Project Investments and Client Achievements

"This cooperation will help transform our research into concrete, economicallyviable energy alternatives." (re: TPC investment in Westport Innovations Inc.)Dr. Philip Hill, Professor Emeritus, Department of Mechanical Engineering at UBC

TPC Investments in 2002-2003

TPC investments were critical in helpingkeep Canada's R&D activities going througha difficult year. For example, the lack ofavailable risk capital had an impact acrosshigh-technology sectors. Here, TPC made asignificant contribution in sustaining thepace of R&D in Canada. As a result of TPC'ssupport, many Canadian companies thatmight not have persevered through thedownturn are now poised to capitalizeon the long-awaited high-technologymarket recovery.

During the 2002-2003 fiscal year, TPCapproved 120 multi-year R&D projects, withinvestment commitments of $431 million.Through these investments, TPC was ableto leverage an additional $1.4 billion ininnovation spending from its privatesector partners.

In 2002-2003, TPC continued todeliver on its commitment to support SMEs.TPC made investment commitments of$145 million to 110 SME projects -92 percent of the total number of projectsit supported during that period.

TPC approved 49 projects inWestern Canada in 2002-2003, with amulti-year investment commitment of about$78.8 million and approved 33 projects inOntario, worth a total of $164.5 million.A further 27 projects totalling $127.3 millionwere approved in Quebec, while 11 projectsin Atlantic Canada received a total investmentcommitment of $60.2 million.

Over the life of the investmentsmade during the year, it is projected thatmore than 7600 high-quality jobs will becreated and/or maintained.

Total repayments to TPC in the2002-2003 fiscal year amounted to$19 million, almost $11 million more thanthe previous year's repayment of $8.3 million.

The table on pages 18-21 lists theinvestments TPC made in 2002-2003(excluding TPC-IRAP investments*) andidentifies the companies and their locations,the innovations supported, and the valuesof the investments.

* For more information on TPC-IRAP projects, visit thewebsite:

TPC Portfolio Investment Highlights
(from Inception to March 31, 2003):

  • 537 projects (TPC and TPC-IRAP)
  • $2.3 billion in TPC funds approved for investment
  • Total public and private investment of $11.9 billion
  • Every dollar of public investment leveraged more than $4 in private investment
  • About 87 percent of TPC projects are with SMEs and account for 34.7 percent of total funds invested
  • More than 75 percent of projects are in environmental, information and communications technologies, and biotechnology fields
  • Total cash repayments to the Crown = $49.3 million
  • Forecasted job creation and maintenance (not including spin-off jobs) = more than 43 000 jobs.




Companies and Locations Advances in technology and innovation $ = AUTHORIZED INVESTMENT VALUES
Advanced Processing Inc.
Concord, Ont.
Developing advanced nondestructive testing, anodic coating, cadmium plating, and other specialized aerospace-related coatings services. $367 335 SDI
Aérospatiale Hemmingford Inc.
Hemmingford, Que.
Enabling the company to expand from a manufacturing source to an integrator of turbine-engine subsystems in the aerospace industry. $330 750 SDI
Ceyba Corp.
Kanata, Ont.
Developing super high-speed optical network components for the long-haul data market that will reduce long-haul network capital and operating costs. $9 000 000
(Project cancelled
- no disbursements made)
Aéro Mécachrome Inc.
(formerly Atelier d'usinage Aéro Ltée.)
Montréal, Que.
Improving the quality of the company's products with the implementation of a quality management system that makes the company a Tier 3 supplier to the aerospace industry. $177 300 SDI
AeroMechanical Services Ltd.
Calgary, Alta.
Advancing airborne automated flight information systems and flight data management systems for the aerospace industry. $127 415 SDI
Atlantic Turbines International Inc.
Summerside, P.E.I.
Undertaking R&D in state-of-the-art engine repair techniques in gas turbine maintenance and restoration. $5 085 300
Avcorp Industries Inc.
Delta, B.C.
Developing the design and engineering skills necessary to create advanced flight control surface structures such as wings, centre wing box structures and vertical stabilizers with rudders. $3 193 215
Composites Atlantic Limited
Lunenberg, N.S.
Updating design and manufacturing processes to accommodate production of advanced, large, complex geometrical composite panels for aircraft interior panel linings. $877 950 SDI
CS Communication & Systems Canada Inc.
Montréal, Que.
Enabling the company to set up world-class resource management, quality control, design and production systems to supply systems integration and software in the aerospace industry. $246 000 SDI
Aero-Safe Technologies Inc.
Fort Erie, Ont.
Developing and applying an automated chemical finishing system and laboratory for treatment of aerospace components. $664 472 SDI
Canadian Shipbuilding & Engineering Ltd.
St. Catharines, Ont.
Developing a state-of-the-art, specialized multi-purpose vessel design to replace and modernize the Great Lakes fleet of ships. $4 950 000
DALSA Corporation
Waterloo, Ont.
Developing a standard for digitally-captured motion pictures for the emerging digital cinema market replacing the existing standard for 35mm. $1 738 070
Electrovaya Inc.
Mississauga, Ont.
Developing small-format batteries for portable wireless communication devices, and large-format batteries for electric vehicles, helping reduce air and land pollution. $9 870 498
Firebird Technologies Inc.
(formerly Firebird Semiconductors Ltd.)
Trail, B.C.
Producing a new crystal - the indium antimonide wafer - for use in materials for industrial and military infrared imaging and seeking systems. $1 143 894
Futuretek-Bathurst Tool Inc.
Oakville, Ont.
Developing an integrated manufacturing system that allows the company to expand and become a full aerospace support services company. $871 875 SDI
GMA Cover Corp.
Guelph, Ont.
Developing lightweight multi-spectral strategic camouflage screens for advanced military camouflage equipment using infrared and thermal applications to allow users to reconfigure their camouflage to suit changes in background as users move from location to location. $4 758 750
Inco Limited
St. John s, Nfld. & Lab.
Developing Hydromet technology to enhance the nickel production process and reduce emissions that cause acid rain. $60 000 000
Intrinsyc Software International, Inc.
Vancouver, B.C.
Developing hardware for advanced enterprise network devices, and software to link devices with enterprise systems and each other. $6 371 351
Likro Precision Limited
Mississauga, Ont.
Developing the capacity to become an integrated supplier of component parts to the aerospace and defence industry. $998 514 SDI
MacDonald, Dettwiler and Associates Ltd.
Richmond, B.C.
Providing R&D for small, more affordable satellite systems, thereby opening up a range of application opportunities for using satellite technology in areas such as forestry or agriculture. $9 853 681
March Networks Corporation & Mitel Networks Corporation
Kanata, Ont.
Developing hardware that converges voice, video and data over a single high-speed network to accelerate the adoption of broadband multimedia communications. $60 000 000
McLeod Harvest Inc.
Winnipeg, Man.
Developing a highly innovative harvester and milling unit that is safe, flexible and priced competitively compared to the traditional combine. $3 013 500
MDS-PRAD Technologies Corporation
Summerside, P.E.I.
Developing an environmentally-friendly, erosion-resistant coating for gas turbine engines to make them safer, more durable and more fuel-efficient. $3 060 660
NGRAIN (Canada) Corporation
(formerly i3Dimensions Inc.)
Vancouver, B.C.
Refining a compression technology that enables common personal computers to modify and manipulate complex three-dimensional data in real time. $7 000 000
Novatronics Inc.
Stratford, Ont.
Designing and developing three new technologies and advanced manufacturing processes for highly specialized aerospace electromechanical components. $1 300 683
PCI Geomatics Enterprises Inc.
Richmond Hill, Ont.
Developing three prototype virtual GeoCapacity centres focussing on mapping, the environment and disaster management for public security. $5 563 240
Pratt & Whitney Canada Corp.
Longueuil, Que.
Enabling R&D for the next generation of smaller, lighter, more fuel-efficient, more reliable gas turbine aircraft engines. $99 400 000
PyroGenesis Inc.
Montréal, Que.
Developing vacuum-plasma, spray-forming technology to create complex metal, ceramic and composite aerospace and defence components that are safer to use, lighter and can operate in extremely severe environments. $5 594 200
Raytheon Canada Limited
Richmond, B.C.
Developing advanced technology for air-traffic management products to provide increased safety to passengers, and air and ground crews. $5 599 110
Rolls-Royce Canada Ltd.
Lachine, Que.
Making medium-sized industrial gas turbine engines that combine competitive unit costs, high thermal efficiency and reduced emissions. $30 000 000
St. John s Dockyard Limited
St. John s, Nfld. & Lab.
Conducting R&D on advanced design and production for subsea structures for the oil and gas industry and developing the in-house capacity to design, engineer and service these structures. $4 042 500
TFI Aerospace Corporation
Orangeville, Ont.
Helping the company evolve into a fully integrated supplier of advanced aerospace fasteners. $460 300 SDI
Thales Avionique Canada
St. Laurent, Que.
Enhancing small jet navigation precision and safety through the development of advanced avionics and "fly-by-wire" flight control systems for use in regional jets and smaller aircraft. $9 900 000
Premier Tech Ltd.
Rivière-du-Loup, Que.
Developing products to enhance plant growth, improving mobile and fixed waste-screening systems, and improving decentralized waste-water treatment systems. $9 990 000
SNC Technologies Inc.
(formerly Les Technologies industrielles SNC Inc.)
Le Gardeur, Que.
Developing non-toxic training ammunition (eliminating the use of lead and heavy metals) to reduce the quantity and toxicity of hazardous emissions into the atmosphere and on land. $2 626 196
Vanguard Aviation Corp.
Calgary, Alta.
Enhancing composite repair, overhaul capability and non-destructive testing processes for specialized services to the aerospace industry. $117 580 SDI
Vistar Telecommunications Inc.
Ottawa, Ont.
Developing a satellite-based telematics system for wireless asset tracking and data-transfer applications in the marine, trucking and automotive industries. $5 250 000
Westport Innovations Inc.
Vancouver, B.C.
Developing a new diesel engine that operates on natural gas but retains the power and fuel efficiency that has made diesel the dominant engine technology for work vehicles around the world. $18 912 010
Wi-LAN Inc.
Calgary, Alta.
Developing wireless telecommunications equipment to deliver "last mile" broadband data services to homes and businesses, including those in remote and rural areas. $8 754 648

SDI: The Aerospace and Defence Supplier DevelopmentInitiative (SDI) is part of a program that assists SMEs in the aerospace anddefence sectors in developing and incorporating world-class business andmanufacturing practices and technologies.

TPC Client Innovation Milestones in 2002-2003

The most important indicator of the success of the TPC program is the success of its clients.In 2002-2003, many of TPC's client companies reached important milestones in theirR&D projects.

The following pages include some examples of the innovation achievements of firms inCanada, who, with TPC's support, are turning great Canadian ideas into solutions that willbenefit all Canadians and put Canada on the map as a world-class centre for innovation.

"This TPC investment recognizes the advanced technology inherent in shipbuilding, and the need for continuing research and development in the industry."
(re: TPC investment in St. John's Dockyard Limited)
Peter Cairns, President of the Shipbuilding Association of Canada

Aventis Pasteur

In 2002, six years after the official start of TPC's investment in the company, vaccines beingdeveloped by Aventis Pasteur Limited for melanoma and colorectal cancers moved into PhaseII clinical studies. Melanoma is a highly malignant cancer of the skin, and colorectal canceris the second-leading cause of cancer-related deaths in North America.

In 1997, TPC invested $60 million to support a project with the Toronto company, a divisionof France-based Aventis, to develop the therapeutic vaccines. Also called immunotherapy,cancer vaccinations work like any other vaccine: by stimulating the body's own immunesystem to produce a natural defence to fight cancerous tumours. In some cases, immunotherapyhas been found to work better than chemotherapy. Today, there's more hope than ever thatsafe, non-toxic alternative treatments that can significantly improve cancer patients' chancesfor positive outcomes are on the horizon.

Bristol Aerospace

In 2002-2003, Winnipeg-based Bristol Aerospace Limited successfully completed componentsfor the Canadian Space Agency's SCISAT satellite, the first all-Canadian satellite to belaunched in more than 30 years. Bristol Aerospace's components included the GyroWheel(tm),a highly innovative attitude-control device that keeps a satellite extremely stable and pointingprecisely in its earth orbit, which is critical for gathering accurate data. Weighing only sixkilograms, the GyroWheel(tm) eliminates the need for multiple momentum wheels and gyros,significantly reducing a satellite's mass, size, power consumption and cost.

In April 2000, Technology Partnerships Canada invested $1.6 million in a project with BristolAerospace to develop the satellite components needed to help a team of Canadian and internationalscientists improve their understanding of the depletion of the ozone layer, includingthat above Canada and the Arctic. The satellite was successfully launched into space in August2003. Depending on its performance, Bristol Aerospace's GyroWheel(tm) could soon becomea standard component for other Earth-pointed satellites specializing in atmospheric science,communications and remote-sensing surveillance.


On July 2, 2003, Saint-Laurent, Quebec-based Neurochem Inc. announced that its ClinicalAdvisory Board for Alzhemed(tm), made up of leading scientific authorities from both NorthAmerica and Europe in the fields of aging and dementia, had reviewed the promising preliminaryfindings of the drug's Phase II trial and given its unanimous recommendation to proceedwith Phase III efficacy studies, pending regulatory approvals for the initiation of such trialsin the United States, Canada and Europe. If successful, Alzhemed(tm) will not only preventand stop the progression of Alzheimer's Disease (AD), a debilitating disease for which nocure exists, but will also place Canada at the forefront of AD research.

Although the causes of AD are not well understood, one of its hallmark features is amyloidplaque. In January 2000, TPC invested $7.9 million to help Neurochem take its new amyloidtherapy, the investigational drug Alzhemed(tm) for the treatment of patients with mild tomoderate AD, through Phase I and II clinical trials, and to prepare for critical Phase III trials.Alzhemed(tm) is expected to act on two levels: preventing and breaking up insoluble deposits ofproteins that cause plaque and binding to soluble protein, to prevent the inflammatoryresponse associated with amyloid build-up in AD. Currently, about 4 million North Americansare afflicted with AD and other related dementias, significantly impeding related quality oflife of the sufferers and their loved ones. The health care costs in Canada alone, estimated to be nearly $4 billion annually, are expected to grow by 10 percent annually as the proportionof Canada's population that is elderly increases over the next several decades.

Offshore Systems

As of 2002-2003, North Vancouver-based Offshore Systems Ltd.'s electronic navigationsoftware for warships, Electronic Chart Precise Integrated Navigation System - Military(ECPINS(r) - M), is pre-eminent in the field. It is now on active duty on Canadian,American, Danish and New Zealand naval ships and vessels of the Canadian and U.S. CoastGuards. The company is also in negotiation with the Royal Australian Navy after beingselected as preferred tenderer. ECPINS(r) - M's subsurface navigation capability - a featurethat has strengthened Canada's competitive position in the world electronic navigation market- is helping to navigate Canada's new submarine fleet.

In 1999, navigational errors accounted for about 46 percent of marine casualties and65 percent of pollution-causing incidents. In the same year, Offshore Systems, with the helpof a $4 million investment from TPC, began researching ways to improve the safety and efficiencyof marine military navigation, which requires higher standards than commercial vesselsto meet high-performance mission requirements. ECPINS(r) - M combines informationfrom ship sensors, satellites and other position-fixing sources with a sophisticated electronic chartdata base to provide accurate, real-time displays of a vessel's current position and progress.Today, the Canadian Coast Guard reports that using ECPINS(r) has resulted in significant costsavings through accident avoidance. And there's a bonus: improved navigation is reducingthe use of fuel - not only saving money, but helping to reduce greenhouse gas emissions as well.

Research In Motion

In August 2003, Waterloo, Ontario-based Research In Motion (RIM) Limited signed dealswith T-Mobile USA and U.S. telephone giant AT&T to offer the newest BlackBerry(tm) 7200series, featuring a crisp, high-resolution colour screen and international roaming. Until theBlackBerry(tm) came along, being able to use the same device for wireless voice and e-mailconnectivity while travelling globally had only been a dream for business travellers. Now,"sent from my BlackBerry(tm)" is becoming a common tag at the end of business e-mails. Thehand-held wireless device, which also functions as a mobile phone and personal organizer,allows users to stay connected anytime, anywhere with secure, wireless e-mail, short messagingservice that lets users exchange short text messages without adding e-mail messages to aninbox, and gives them access to corporate data and the Internet.

Recognizing the potential of e-commerce to significantly change the way both business andgovernment operate, TPC invested $33.9 million in April 2000 to help RIM accelerate itsR&D in wireless Internet platform technologies and enhance the performance of its next-generation,hand-held communications devices. The BlackBerry(tm) is just one of a numberof award-winning wireless mobile communications products, services and embedded technologiesbeing developed by this Canadian company.

Diversified Metal Engineering

In 2002, Diversified Metal Engineering (DME) Limited, based in Charlottetown, PrinceEdward Island, became a finalist for a Canadian Innovation Award for SustainableDevelopment, presented jointly by the Canadian Manufacturers & Exporters, and IRAP.The honour recognized the company's work developing a wet muffler, called theEco-Silencer, to clean up exhaust from diesel engines used on ocean-going ships. The technologynot only extracts soot and acidic gases from exhaust fumes, but reduces engine-noiselevels as well. It employs a turbulent mixing process, where seawater is mingled with thegases until the pollutants are absorbed, eliminating the black plumes typically produced byengines, boilers or incinerators. Sulphur dioxide, one of the more noxious components ofthose plumes, is deposited overboard in the form of sulphides and sulphates, which are amongthe most common naturally occurring compounds in the marine environment. Moreover,these compounds are filtered through a carbon and sand filter, so that they enter the waterin as pure a state as possible.

In 2001, TPC-IRAP invested $495 000 in DME to support precommercial research, includingtrial installations aboard the Canadian Coast Guard icebreaker Louis S. St. Laurent, andMarine Atlantic's ferry from Sydney, Nova Scotia to Port Aux Basques, Newfoundland andLabrador. These installations helped successfully hone the Eco-Silencer's performance. Theequipment offers several advantages to commercial operators, including the ability to runengines while in port, reduce deck-cleaning expenses, and enable the use of low-cost, high-sulphurfuel while still complying with international environmental regulations. Passengers,meanwhile, appreciate the reduction of exhaust smells, diesel soot and ambient noise.

Benefits for Canada and Canadians

"This TPC investment will spawn growth in the broadband technology cluster andwill benefit information technologies researchers, universities, and SMEsacross the region." (re: TPC investment in MarchNetworks Corporation & Mitel Networks Corporation)Jeffrey Dale, President and CEO, Ottawa Centre forResearch and Innovation (OCRI)

TPC Program Benefits

The value of TPC in terms of benefits forCanada and Canadians is assessed in two ways.

The first set of measures is thequantitative benefits themselves. Theseare the high-quality jobs TPC investmentsmaintain and/or create, the additional investmentleveraged from the private sector,including foreign investment, and, finally,the repayments TPC investments generate. Asillustrated on pages 27 and 28, TPC investmentsin 2002-2003 continued to deliversignificant returns in these key areas.

The second set of benefits isqualitative and longer-term. They make asignificant contribution to building Canada'sinnovative capacity for the future, and include:increased technological capabilities of firmsand their partners; enhanced competitivenessand productivity of firms and/or users ofthe technologies that TPC helps bring intothe marketplace; and the well-being andquality-of-life benefits that flow from theinnovations TPC invests in, such as bettertherapeutic alternatives for treating life-threateningdiseases, or reduction oftoxic emissions.

For example, as of March 31, 2003,TPC invested almost$357 million in 25 climatechange-related projects,which have leveraged $1.8 billion in privatesector R&D spending. These investmentsrepresent one of the largest program contributionsyet made by the Government ofCanada to enable a smooth transition toa more innovative, energy-efficient, andless-emission-intensive society.

In addition, TPC has investedin technology with profound potentialenvironmental and humanitarianbenefits, including$39.1 million in clean-watertechnology.

Benefits from these types of investmentsare by their very nature harder to measure,but no less important in assessing the overallvalue of the TPC program to Canadians.TPC has identified a number of key resultareas to reflect these qualitative benefits,and is in the process of developing andimplementing specific indicators to measurethem. The system is expected to be in placein 2003-2004.

Quantitative Benefits 2002-2003 Cumulative to March 31, 2003
Jobs forecasted to be created and/or maintained over the life of the projects more than 7600 * more than 43 000 **
Forecasted additional investment leverage $1.4 billion $9.6 billion
Forecasted foreign direct investment (excluding TPC contributions) $92.5 million $1.2 billion
Cash repayments received $19 million $49.3 million
Value of accepted warrants at time of receipt $27 million $34 million

* Jobs estimated to be created and/or maintained over the life of the projects contracted in 2002-2003.

** Jobs estimated to be created and/or maintained over the life of all projects contracted since the program's inception in 1996.

As TPC matures, cumulative repayments are climbing, as illustrated in the graph below:

Cumulative Repayments to 2003

Chart - * Repayments in 1998-1999 include the sale of warrants, with proceeds totaling $9.3 million, and the negotiated settlement of a TPC agreement with proceeds of $3.5 million.

Program Management Improvements

"With an overall investment in R&D of approximately $1.5 billion, the aerospace and defence sector is one of this country's top investors in innovation. TPC investments are critical to this industry and will help sustain Canada's technological leadership while creating new opportunities for growth across the country." Peter R. Smith, President, Aerospace Industries Association of Canada (AIAC)

In TPC's 2001-2002 Year in Review, fiveareas were identified where TPC would beworking in 2002-2003 to maximize itscontribution to building a more-innovativeCanada. First, TPC said it would sharpenand focus its program by asking some toughquestions about value and developing newmeasures that more effectively capture theimpact TPC has on its clients, the benefitsof its investments and the value deliveredfor tax dollars.

TPC conducted detailed consultationsthrough a business model review processwith about 30 of its clients and theirindustry associations to find out how tobetter align TPC's contractual requirementsand measurements of success with theirbusiness realities and their assessments ofthe benefits that matter most.

TPC confirmed that its investmentsin R&D projects deliver many benefits toCanada directly in line with the mandateand objectives of the program, but recognizedit is not systematically recording thefull breadth of these benefits, for example:

  • increased technological capabilities and expertise;
  • growth through partnerships with universities and other research institutes;
  • expansion of R&D facilities; and,
  • employment of highly skilled personnel, reducing and, in some cases, reversing the brain drain.

These findings will help TPCimprove its tracking of project outcomes,and enable it to provide more completereporting to Canadians in the years aheadon the benefits delivered by the program.

TPC also said it would increase itsregional presence. Enhancing deliverycapacity is essential to keeping in stepwith the evolving needs of a client basethat will be increasingly dominated bySMEs, and will extend across both emergingand traditional sectors of the economy.In 2002-2003, working with IndustryCanada's regional offices, TPC established15 TPC innovation officer positions acrossthe country to promote TPC and otherfederal innovation programs.

Also in the 2001-2002 Year in Review,TPC identified the need to improve thecommunication of its vision, in particularby providing tangible examples of theimportance of innovation to Canada's future,and the need to invest in this innovation.TPC said it would improve how it informsCanadians about the rationale for itsinvestment decisions, and would be moretransparent about the process used to makethese decisions and the results of investments.

Client companies who share theconcern that the value added by TPC toCanada has not been fully communicatedhave offered to become active participantsin delivering this message. They have agreedto highlight TPC's role in supporting criticalresearch projects in the announcementsthey make about their subsequent successes,in everything from opening new buildingsfor expanded R&D programs andannouncing new business partnerships inCanada, abroad and with universities forcollaborative R&D, to receiving regulatoryapproval for the further development orlaunch of a new vaccine or therapy.

As part of fine-tuning its processes,TPC is continuing to examine its prioritization,due diligence and approval processes,and is developing a more consistentapproach for all TPC components.

Furthermore, in consultation with itspartners, TPC is developing benefit-reportingguidelines for recipient firms to help themarticulate and report the contributions theirprojects make to policy benefits of primaryinterest to the Government of Canadaand Canadians.

Finally, TPC said it would work tobuild partnerships for the future by fosteringstronger relationships with other key playersin the innovation process, particularly withother federal departments and agencies.These relationships have significant potentialto leverage more benefits from TPC investments,enhance its access to technicalknowledge to strengthen the strategic valueof the program, and help ensure TPC supportsother institutions in fulfilling their mandatesto promote innovation.

By working more closely with otherfederal organizations, such as the BusinessDevelopment Bank of Canada, the CanadianSpace Agency and the Canadian Institutesof Health Research, TPC has alreadyimproved its capacity to make strategicinvestments and pursue collaborativefunding opportunities with these partners.This saves time in terms of review andassessment, and supports more efficientuse of federal resources.

Our Priorities

"When business and government work together as partners, good things happen. This is exactly the kind of collaboration that is increasing Canada's success, both in business and as a country." (re: TPC investment in NGRAIN (Canada) Corporation - formerly i3Dimensions Inc.) Shahid Hussain, President and CEO of the New Media Innovation Centre

Our Priorities

TPC is an active investor in a range ofsectors where there is significant potentialto fuel innovation that will deliver economicand social benefits to Canadians. TPC'sinvestment officers work hard to stay on topof research and technological developments,many of which are moving at breakneckspeed. They analyze the potential of thesedevelopments to advance Canada's competitiveness,productivity and quality of life.

The following are highlights ofsome of the types of innovative processesand technologies that TPC will focus onsupporting in the coming year:

  • eco-efficient and clean production technologies that embody the principles of pollution prevention, waste reduction and sustainable development;
  • key platform technologies in the field of biotechnology, such as genomics, proteomics and bioinformatics, which are essential to growth;
  • technologies that advance both wire-line and wireless broadband communications;
  • core information and communications technology development in photonics, microelectronics and software development;
  • advanced manufacturing and processing technologies and materials, including nanotechnology, for the resource and processing sectors;
  • technologies that advance core capabilities in aerospace and defence; and,
  • projects with significant potential to contribute to the implementation of the Climate Change Plan for Canada and help accelerate the commercialization of technologies that address climate change.

At the same time, as part of TPC'sforward-looking investment strategy, TPCwill examine how its program can best actas an instrument to support innovation in awider variety of sectors, including traditionalsectors, by improving manufacturing anddistribution processes, and using bestpractices to enhance competitiveness.

To Contact TPC National Network

TPC has 25 investment officers in Ottawa and 15 TPC innovation officers acrossCanada to provide helpful advice on accessing support from TPC and other federalprograms. These officers draw upon Industry Canada expertise on trends in industries,sectors and markets, and information available from industry associations and outsideanalysts in order to assess project submissions. TPC officers also consult extensivelywith a network of appropriately qualified experts in other Government of Canadadepartments and agencies such as Natural Resources Canada, Health Canada andEnvironment Canada, and experts in universities across the country. Through theseconsultations, TPC can provide the best assessment of the technical merits of anyproposal it receives.

In addition, through the TPC-IRAP partnership, TPC taps into a network of morethan 260 Industrial Technology Advisors located in 90 communities across Canada.These advisors are chosen for their experience in business, and their skills in technologyand science. In addition to advising on potential TPC support, they help SMEsincrease their innovative capabilities by offering advice on financial services, programs,information tools and resources offered by governments, industry associations, theprivate sector, R&D institutions, technology brokers and technology transfer centres.

Tel.: 1 800 266-7531
Web site: 
Tel.: 1 877 994-4727
Web site:

TPC National Network

TPC National Network - Land Map
Alberta and Northwest Territories:
639 - 5th Avenue S.W., Suite 400
Calgary, Alta. T2P 0M9

250 Karl Clark Road,
Edmonton, Alta. T6N 1E4
British Columbia and Yukon:
2000 - 300 West Georgia Street
Vancouver, B.C. V6B 6E1

3250 East Mall
Vancouver, B.C. V6T 1W5
Manitoba and Prairies:
435 Ellice Avenue
Winnipeg, Man. R3B 1Y6
Newfoundland/Labrador and Nunavut:
10 Barter's Hill, 10th Floor
St. John's, Nfld. A1B 3R9

Memorial University Campus
PO Box 12093
St. John's, Nfld. A1B 3T5
Nova Scotia and Maritimes:
1800 Argyle Street, 5th Floor
Halifax, N.S. B3J 2V9

1411 Oxford St.
Halifax, N.S. B3H 3Z1
151 Yonge Street, 3rd Floor
Toronto, Ont. M5C 2W7

200 Town Centre Court, Suite 1101
Scarborough, Ont. M1P 4X8
5, Place Ville-Marie, 7th Floor
Montréal, Que. H3B 2G2

75 de Montagne Blvd., Suite P-101
Boucherville, Que. J4B 6Y4
123 - 2nd Avenue South, 7th Floor
Saskatoon, Sask. S7K 7E6

Financial Statements

STATEMENT OF OPERATIONS ($000) (For the year ended March 31, 2003)
TPC 2002-2003 2001-2002
Regular salaries 5 136 4 205
Employee benefits 1 027 841
Total Salary 6 163 5 046
Transportation and communications 360 461
Information 832 851
Professional and Special Services 1 909 2 052
Other 1 412 1 412
Total Non-Salary 4 513 4 785
TPC Operations 10 676 9 831
TPC-IRAP 2002-2003 2001-2002
SALARY 1 688 1 413
NON-SALARY 661 620
TOTAL OPERATIONS 13 362 12 146
STATEMENT OF CONTRIBUTION FUNDING ($000) (For the year ended March 31, 2003)
  2002-2003 2001-2002
Environmental Technologies 37 602 33 428
Enabling Technologies 82 070 72 412
Aerospace and Defence 179 872 184 022
Industrial Research Assistance Program (TPC-IRAP) 28 226 29 711
Total Contributions under TPC 327 770 319 573
Defence Industry Productivity Program 0 84
Total Contributions Under Sunsetted Programs 0 84
Total Contribution Disbursements During Fiscal Year 327 770 319 657
Funds Carried Forward to Future Years 41 498 40 611
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007
ANNUAL PROGRAM FUNDING: 300 000 300 000 300 000 300 000 300 000
Funding from Other Government Departments (1) 15 378 15 000 15 000 15 000 15 000
Allocation for Program Operations (13 362) (10 500) (10 500) (10 500) (10 500)
Funds Reprofiled to Future Years 76 359 41 092 41 379 20 400 400
Funds Lapsed in 2002-2003 Carried Forward (41 498) 0 23 274 18 224 0
Repayments (2) 6 410 16 500 23 600 52 200 110 100
Transfers to DND/DFAIT (367) 0 0 0 0
Program Reductions (6 000) (6 000) (6 000) (6 000) (6 000)
Transfer for Innovation Strategy (12 000) 0 0 0 0
Other Adjustments - Operations Actual/Proposed 2 850 (9 127) (10 619) (10 619) (10 619)
AVAILABLE CONTRIBUTION FUNDING 327 770 346 965 376 134 378 705 398 381
COMMITMENTS UNDER TPC as of March 31, 2003:
Environmental Technologies 37 602 61 276 58 306 45 152 14 812
Enabling Technologies 82 070 65 938 57 993 32 296 34 406
Aerospace and Defence 179 872 156 925 92 096 40 028 25 638
Industrial Research Assistance Program (TPC-IRAP) 28 226 19 288 1 840 0 0
TOTAL COMMITMENTS UNDER TPC 327 770 303 427 210 235 117 476 74 856
  0 43 538 165 899 261 229 323 525

Note (1) Includes funds for the Canadian Landmine Fund and the National Research Council Canada's Industrial Research Assistance Program (TPC-IRAP).

Note (2) Figures are one year after receipt: for 2002-2003 and 2003-2004, the amounts are net of the operating portion for the administration of repayments. For 2004-2005 and future years, the amounts include the operating portion, to be determined at a later date. Financial Statements