Innovative Solutions Canada: Annual Report 2020–21


Executive summary

2020 was a year like no other, with Canada being confronted by a serious public health crisis. On March 11, 2020 the World Health Organization declared COVID-19 a global pandemic. The Government of Canada quickly pivoted its work to ensure a quick and effective response to the pandemic, and Innovative Solutions Canada is proud to support this work.

This report highlights the activities and accomplishments of Innovative Solutions Canada (ISC) between April 1, 2020 and March 31, 2021 (fiscal year 2020–21), as well as priorities moving forward.

As the single largest purchaser of Canadian goods and services, the Government of Canada has a unique opportunity to support the growth of Canadian innovators and entrepreneurs. The program has two streams with funding dedicated to Canadian innovators who want to start, grow and get to market. Through the Challenge and Testing Streams, ISC supports the full spectrum of Research and Development (R&D) in Canada. ISC has five core objectives:

  1. Supporting Canadian SMEs and innovative Canadian businesses in commercializing R&D;
  2. Using R&D from Canadian SMEs and innovative Canadian businesses to meet the federal government's needs and help to address key government priorities;
  3. Stimulating technological innovation in Canada;
  4. Providing meaningful support to Canadian innovators prior, during, and after their ISC experience;
  5. Encouraging the participation of under-represented groups and better measuring program impacts on those communities.

11 key accomplishments that Innovative Solutions Canada achieved this year

Challenge Stream

The Challenge Stream supports early-stage research and development by supporting departments and agencies in releasing challenges – either for the department's operations or in Canada as a whole - which can be solved by innovative solutions. The program provides funding to assist businesses in creating a proof of concept, and if successful, a prototype.

  1. This year, 1,093 proposals were submitted in response to 35 challenges. The Challenge Stream Secretariat assisted 10 departments and agencies to launch new 19 challenges – including the first challenge issued by Indigenous Service Canada. 12 were related to clean tech, six to COVID, and seven related to plastics (many challenges have more than one theme). 
  2. For COVID initiatives, five departments and agencies mobilized to launch six challenges in 2020–21. This resulted in 350 proposals and 25 awards (19 Phase 1 awards and 6 Phase 2 awards).
  3. The first three businesses have completed the full Challenge Stream cycle by completing Phase 2. This means they are on their way to commercialization and creating specialized, high paying jobs, alongside helping departments achieve their mandate by using made-in-Canada innovations.
  4. ISC asks businesses to self-identify what percentage of business owners or directors are members of an equity-seeking group. For the Challenge Stream, 58% of funding recipients are owned in part by women, 71% are owned in part by visible minorities, 3% are owned in part by persons with disabilities, and 3% are owned in part by Indigenous persons.  

Testing Stream

The Testing Stream supports late-stage (pre-commercial) prototypes developed by Canadian companies of all sizes by matching them with federal government organizations willing to test their innovations in real-life settings and provide them with feedback to help them bring their innovation to market.. The program then works with PSPC to procure these prototypes to facilitate a sale with the Government of Canada and the testing/feedback process.

  1. Launched two Calls for Proposals (CFP), including a thematic COVID CFP that resulted in 44 funding awards worth over $29 million that were tested in 24 departments and agencies, and an open CFP in January 2021 that attracted a record of 991 proposals.
  2. Significantly reduced the overall time to contract awards under the Testing Stream by creating new processes. For the evaluation of proposals, 579 evaluations were completed in the first four weeks, compared to 185 in the first four weeks for the previous CFP. In terms of reaching contract award after evaluations had concluded, the average was reduced from seven months (with some outliers as high as 11 months) to an average of 5.5 months, with some contracts awarded as quickly as 2.5 months.
  3. Three GC organizations tested an innovation through the Testing Stream for the first time: the Canada School of Public Service, Federal Economic Development Initiative for Northern Ontario, and Jacques Cartier and Champlain Bridges Incorporated (a Crown Corporation).
  4. ISC asks businesses to self-identify what percentage of business owners or directors are members of an equity-seeking group. For the Testing Stream, 66% of funding recipients are owned in part by women, 75% are owned in part by visible minorities, 16% are owned in part by Indigenous persons, 19% are owned in part by persons with disabilities, and 39% are owned in part by youth (up to 30 years of age).Footnote 1  For the second Call for Proposals in 2020–21, new categories were introduced to track participation by businesses owned by LGBTQ2+ persons and gender diverse persons. These groups represented 21% and 22% of applicants respectively with funding awards to take place in 2021–22.


Innovative Solutions Canada as a whole – includes the Challenge Stream, the Testing Stream, and actions advanced by the ISC Secretariat.

  1. Awarded nearly 190 contracts and grants for projects starting in 2020–21, valued at approximately $77 Million.
  2. Introduced a Pathway to Commercialization procurement option for both the Challenge and Testing Streams. Moving forward, this framework will enable GC departments and agencies to purchase eligible and successfully developed / tested ISC innovations on a commercial basis, which will greatly increase the program's ability to support the growth and scale up goals and objectives of innovative Canadian SMEs.
  3. ISC is working to increase its partners to better support innovation testing and demonstration. In 2020–21, the program signed its first MOU with a provincial partner, Innovation Saskatchewan.

What we will do next

Supporting innovation and growth in Canadian businesses is essential to economic recovery.  ISC will continue to support departments and agencies to identify and issue new challenges, award contracts and grants to Canadian businesses, test pre-commercial innovations through the Testing Stream, and bolster research and development in Canada. In addition, several objectives have been identified as priorities for fiscal year 2021-2022, including:

  • Increasing support for underrepresented groups will result in more diverse solutions for tackling the Government of Canada's challenges. To attract more diverse applicants, the program will raise awareness by strengthening its outreach and bolstering its social media presence.
  • Implementing recommendations from the Goss-Gilroy program review undertaken in 2020, which include developing more tools to support the 21 departments and agencies enhance awareness of the program within their organizations and to increase participation in ISC.
  • Collaborating with new partners in order to advance the uptake of the cutting-edge research and development to solve complex problems. As part of this effort, ISC will prepare the operational processes for the Pathway to Commercialization to enable departments and agencies to access ISC innovations through procurement on a commercial basis.
  • Continue to grow the program and support Canadian innovators by undertaking efforts  to renew ISC until March 31, 2027, which would ensure continued program operations. This also supports plans for future Calls for Proposals, and advancing the integration between the Challenge Stream and the Testing Stream.

Program overview

Innovative Solutions Canada (ISC) was launched in December 2017, with the objective of supporting Research & Development (R&D) by leveraging Government of Canada procurement. In 2019, the Testing Stream (formerly the Build in Canada Innovation Program) was consolidated into ISC.

Through the Challenge and Testing Streams, ISC supports the full spectrum of research and development (R&D) in Canada. The program supports the operational needs of government, GC priorities for innovation, economic development, and social objectives. When firms have government as their first customer for a new innovation, this sends a strong signal to the market that their product is sought-after. Setting challenges and procuring innovations is also an important way for the government to shape markets and give direction to the innovation ecosystem. This support encourages innovators to focus on areas that are beneficial for Canada which the private sector may not have otherwise invested resources.

ISC is supported by 21Footnote 2 GC departments and agencies mandated to participate in the program's Challenge Stream. However, any GC organization may participate in either stream of the program. Each year, the 21 departments and agencies are required to set aside the equivalent of 1% of their 2015-16  intramural R&D and procurement budgets to support innovative Canadian SMEs to develop next generation technologies that have the potential to address their operational requirements and support government priorities. Annex B identifies these organizations and their required annual spending under ISC.   

ISC organizations are permitted to direct up to 30% of their required annual contribution to the Challenge Stream to fund the testing of innovative prototypes under the Testing Stream. This flexibility is intended to help ISC organizations more easily meet their annual spending commitment to the program and enable the program to respond to high and growing demand under ISC's Testing Stream.

ISC's total budget for innovation spending in 2020–21 was approximately $147.6 M. This is comprised of departmental funds set aside through the Challenge Stream ($113.8 M) and the Testing Stream's annual core innovation budget of $33.8 M. In addition to this, the National Research Council was allocated up to $15 M by Cabinet for COVID challenges.

Business size of 2020–21 awardees

Challenge Stream

100% awarded to SMEs

Testing Stream

99% awarded to SMEs


ISC secretariat

The ISC secretariat oversees the program's day-to-day operations, a core function of which is to assist ISC organizations to develop and release challenges and test promising prototypes. Officials at the National Research Council's Industrial Research Assistance Program (IRAP) and Public Services and Procurement Canada (PSPC) support ISC's  implementation and delivery. Industrial Technology Advisors (ITAs) from NRC IRAP review challenges to determine if the challenge will result in novel innovations or if commercially available solutions are available, alongside performing technical evaluations of proposals. PSPC - the R&D contracting authority for the GC - functions as ISC's procurement authority and assists participating GC organizations to navigate the policies and procedures associated with R&D procurement. 

Challenge Stream

Twenty departments and agencies are mandated to participate in ISC each year and to issue challenges based on desired outcomes rather than known products or process specifications. Departments and agencies contribute dedicated funds which are equivalent to 1% of their 2015-16 intramural R&D and procurement budget; these funds are set-aside specifically for ISC spending and cannot be used for anything else. At the conclusion of the fiscal year, unspent funds will lapse, i.e. they immediately become unavailable for future spending.

The program's Challenge Stream has three phases and is open to Canadian firms that meet the Challenge Stream eligibility criteria.  In Phase One (Proof of Feasibility), firms may receive up to $150,000 for up to six months to prove the scientific and technical feasibility of a novel solution to a given challenge. In Phase Two (Prototype Development), firms that successfully complete Phase One may receive up to $1M for up to two years to develop a working prototype for their solution. In Phase Three (Pathway to Commercialization), based on the success of the prototype developed in Phase Two, the federal department or agency that supported the R&D may opt to procure the solution, which would represent the first reference sale of the innovation for the firm.

In 2020, departments launching challenges seeking solutions in direct response to COVID-19 were afforded financial flexibility with expanded limits of up to $300,000 for Phase One and up to $2M for Phase Two if required.

Testing Stream

Under the Testing Stream, ISC prequalifies late-stage (pre-commercial) prototypes developed by Canadian companies of all sizes and then matches them with federal government organizations willing to test them and provide feedback to these firms. The program then works with PSPC to procure these prototypes to facilitate the testing/feedback process. Firms can receive a contract valued up to $550,000 for non-military innovations and up to $1.15 million for military innovations. The aim of this support is to help these firms to commercialize their innovations faster and more effectively than would otherwise occur. 38 departments and agencies and one Crown corporation have participated in ISC's Testing Stream (the former BCIP) to date, including three new partners in 2020–21. To support the response for COVID-19, the financial limits were temporarily increased to $2M for Testing Stream contracts.

Results and accomplishments for the year

ISC is emerging as an important tool in order to advance government priorities, through its unique approach of using both procurement and grants to support research and development in Canada. Both program streams have been leveraged in order to support horizontal initiatives to benefit economic and social outcomes.

Results achieved in 2020–21

Challenge Stream Testing Stream
  • 19 New Challenges Launched
    • 12 Clean Tech Challenges
    • 6 COVID Challenges
    • 7 Plastics Challenges
    • 1 Quantum Challenge
      * Does not sum to 19, challenges have multiple themes, e.g. both plastic and clean tech.
  • 83 awards for projects starting in 2020–21 valued at nearly $32.8M
    • 57 Phase 1 awards
    • 26 Phase 2 awards
  • Total disbursed funding valued at over $34.2M
    • Over 12M for Phase 1 awards
    • Over 22M for Phase 2 awards
  • Two Calls for Proposals Launched:
    • One COVID Call which received 591 proposals
    • One Open Call which received 991 proposals
  • 75 contracts awarded valued at over $44.5M
  • Total disbursed funding valued at over $32.1M
    • Over 19M for COVID-19 related projects
  • Over 13M for other types of innovations

Results from program launch in December 2017 to March 31, 2021

Challenge Stream Testing Stream
  • 91 Challenges Launched, with $64.4M in committed funding
  • 206 Awards
    • 169 Phase 1
    • 37 Phase 2
  • 551 contracts awarded, valued at over $281M
    • 112 Clean-Tech
    • 62 A.I. contracts

This is well illustrated with the federal response to COVID-19, where the Testing Stream launched its first thematic Call for Proposals (CFP) resulting in 24 departments and agencies testing innovations. Under the Challenge Stream, six departments and agencies mobilized to launch eight challenges in the past two years. This resulted in 529 proposals and 25 awards (19 Phase 1 awards and 6 Phase 2 awards). Six of those challenges were issued in 2020–21. The National Research Council (NRC) was a particularly important partner in launching challenges, in part because they were allocated an additional $15 million in ISC funding to support the COVID-19 response.

This year also saw ISC launching seven more plastics challenges, which were released in February 2020. This complements the additional eight challenges that have been launched since 2018 and represents another step Canada has taken to support innovation and grow Canadian capacity in an important and growing field.

Program-wide achievements

Pathway to Commercialization

Over the course of 2020–21, the program worked closely with PSPC to identify and pursue opportunities to streamline procurement from firms that successfully developed their R&D. In 2019-20, a process was put in place that enables departments and agencies to procure successfully developed solutions intended on solving operational needs under ISC's Challenge Stream. Solutions will be assessed at the conclusion of Phase 2 to determine if it is ready for commercialization. This added feature alleviates the need to re-compete this business.

In January 2021, the program launched an open CFP which introduced Pathway to Commercialization for the Testing Stream. This initiative enables GC departments and agencies to purchase innovations (that have been successfully tested through the Testing Stream) on a commercial basis. The objective of the Pathway to Commercialization for both ISC streams is to help grow Canadian small businesses and provide enhanced opportunities to contract with the GC. In order to participate, companies must have received and successfully completed an initial ISC Testing Stream contract, be a small business, and the proposed innovation must be ready for market. The Government of Canada may choose to conduct a competitive process for any requirement in the event that the same or similar solution or innovation exists in the marketplace. ISC will assess the results of this initiative and determine how best to use the Pathway to Commercialization moving forward.

Economic analysis of survey data

The Testing Stream surveys companies to understand the impact of investments on company growth and sales; these surveys are a regular part of program operation and have continued this year.

As more companies began the transition from Phase 1 to Phase 2 in 2019-20, understanding the impact of Challenge Stream funding on recipients will be an important priority. In 2020–21, the program conducted its first annual survey of firms that have completed their participation in the program's Challenge Stream, whether at the end of Phase I or Phase II. These firms will be surveyed annually for five years in order to seek information on company growth in terms of revenues and employees, sales of their solution, and efforts to protect their intellectual property.

ISC has commissioned a third party analysis to assess the survey data from both the Testing and Challenge Streams in order to determine the economic impact of funding delivered through the program to date.

Some key findings of this survey are as follows:Footnote 3

  • For every $1 million awarded by ISC resulted in approximately $3.1 million increase to Canada's GDP and 4 jobs sustained per year.
  • Testing Stream – Sample size of 291 businesses: 77% of companies were able to commercialize after ISC, and 67% of companies had exported their product. 948 jobs were created directly through TS contracts, including 746 jobs in STEM. The estimated jobs sustained from involvement in the Testing Stream is 453 jobs/year.
  • Challenge Stream – Sample size of 16 businesses: The estimated jobs sustained based on survey responses are 25 jobs/year. It is important to note that the Challenge Stream funding is awarded at an early stage of technology development, and as such projects will not be ready for commercialization, export or other potential impacts when compared with Testing Stream late-stage R&D contracts.
Economic assessment of survey data
  # of Awards ISC Funding ($M) Impact on GDP ($M) GDP Return Commercialization Rate Export Rate Jobs Created Direct from ISC Award Jobs Sustained/Year Estimated Rate of Tax Return
Testing Stream 291 114.8 365.0 3.2 77% 55% 1,319 453 1.4
Challenge Stream 16 2.2 2.1 0.96 N/A N/A 14 25 N/A
Total 307 117.1 367.1 3.1 77% 55% 1,333 478 1.4

Improving ISC's digital portal

The Testing Stream COVID CFP and multiple simultaneous COVID related challenges resulted in unprecedented traffic and activity to the system. This caused strain on the system that was not previously seen which allowed us to uncover serious limitations in the infrastructure. During the summer of 2020, ISED made significant changes to the system to better handle the exponential increase in traffic. This was deployed prior to the Testing Stream open CFP in January 2021, and the system infrastructure performed as expected, even as the number of applications reached a record high.

In addition, the work completed in 2020–21 included adjusting the digital proposal system to customize for the Testing Stream. This included building the CFP form online, ensuring the evaluation could be completed through the portal, and adding enhanced functionality for issuing debrief letters. For the Challenge Stream, enhancements were made to reporting, as well as the functionality around challenge development and evaluation. All these changes improved the user experience and facilitated reporting, which in turn created process improvements for data management and evaluation timelines.

In terms of security, ISC upgraded the system to a new cloud-based infrastructure for Identity Management. This represents an improvement in security, access control, digital identity management, data recovery, and maintenance.

Challenge Stream

Supporting the Government of Canada in launching challenges

One of the key pillars to the success of the Challenge Stream is enhancing the ability of departments to launch challenges. The ISC Secretariat hosted a number of sessions for departments and agencies throughout 2020–21, in particular:

  • Challenge Articulation Workshops with the Prototyping Lab at Bayview Yards
    • Full-day workshops for GC departments and agencies focused on how to apply design thinking to articulate problem statements related to their departmental mandates.
  • Lunch and Learn Series (launched in 2021) to create a space where departments and agencies can discuss their experience with the Challenge Stream.
  • This provides a forum for employees to collaborate on upcoming challenges with common themes – such as accessibility and plastics, and to discuss fully utilizing the program within their departments which may include internal process improvements.
Top 5 ISC Challenges by technology field March 2020 - March 2021
Top 5 ISC Challenges by technology field March 2020 - March 2021
Technology field Number of ISC Challenges being released
Environmental (Clean) Technology 12
Sensors 6
Information Technology 6
Biomedical 5
Chemical Technology 5

Environment and Climate Change Canada (ECCC) has been a strong partner of the Challenge Stream over the years. This year they spent higher than their mandated threshold on program challenges. Through ISC, ECCC is supporting Canada's vision of a future without plastics waste and net-zero emissions by 2050 by acting as a key collaborator, encouraging other GC partners to participate in launching plastics themed challenges.

Challenges by technology area

In 2019-20, ISC began tracking the technology fields captured by the various challenges released by federal departments and agencies.

The program decided to adopt technology topic fields used by the US National Science Foundation's SBIR program. This approach is based on what is written in the challenge notice rather than what is contained in proposals from eligible businesses. Often, multiple technology topic areas are covered by a single challenge. From April 1, 2020 to March 31, 2021, the top five technology topics identified in ISC challenge notices were: environmental (clean) technology (12), sensors (6), Information Technology (6), Biomedical (5) and Chemical Technology (5).

First businesses have completed Phase 2

The Challenge Stream was announced in 2017 and it takes some time for businesses to make their way through Phase 1 and 2. In 2020–21, the program has begun seeing the first businesses completing Phase 2 of the Challenge Stream. This means that their product is generally at Technological Readiness Level (TRL) 6 or higher. Innovations that are at TRL 7-9 can apply for a streamlined entry into the Testing Stream which may generate additional funding opportunities to test their innovations in an operational setting. Innovations that applied to contract-based challenges via the Challenge Stream after January 2020 can take advantage of our Pathway to Commercialization as these challenges are intended to solve an operational need identified by the sponsoring department.

As more companies enter Phase 2 and are able to create made-in-Canada innovations, it will support the Government of Canada in leveraging new solutions to meet operational needs and to fill a gap in the marketplace in line with a department's mission and mandate. Additionally, as businesses complete Phase 2, it will demonstrate tangible results which in turn, gives the Challenge Stream more credibility with departments in showing value to spend their mandated ISC budgets.

Challenge Stream Awards in 2020-2021 by Province
Challenge Stream Awards in 2020-2021 by Province
Provinces Number of awards Value of awards ($M)
Alberta 11 3.38
British Columbia 14 7.9
Manitoba 2 2
New Brunswick 1 0.17
Ontario 36 12.7
Prince Edward Island 1 0.17
Quebec 18 6.5
Grand total 83 32.7

ISC's COVID-19 response saw the NRC release several targeted challenges aimed at developing solutions to combat the pandemic. Although the Challenge Stream can take time, as companies move through Phase 1 and Phase 2 (where they undertake R&D activities and build a prototype) ISC has demonstrated how the GC can be agile in meeting pressing needs impacting Canadians.

The program sought flexibilities for its program parameters, allowing departments to award higher maximum values for Phase 1 and Phase 2 where required. This expansion of authorities recognized shortening delivery timeframes may require larger sums of funding to achieve the desired outcomes. As a result, the majority of COVID-19 related challenges launched with shorter Phase 1 and Phase 2 timeframes leading to expedited commercialization activities post-Phase 2 in some cases.

For example, Calgary company Roswell Downhole Technologies Inc. received Phase 1 and Phase 2 funding from the NRC to produce a filtration material for N95 masks. As of November 2020, they were producing sufficient amounts to create 58 million medical grade masks per month. See the news story here.

IP training

The Challenge Stream has a commitment to provide IP training sessions for companies. In fall 2020, the program organized numerous virtual training sessions on IP for participants in Phase One. The Canadian Intellectual Property Office (CIPO) delivered the training, which provided ISC awardees with information on the importance of protecting their IP and of developing a strategy to gain competitive advantage by utilizing the value of their IP. In addition, Phase 2 companies were offered one-on-one discussions with CIPO advisors to cover more in-depth content linked to the development of a prototype and any subsequent IP stemming from it. Going forward, ISC will continue collaborating with CIPO in delivering these valuable IP training sessions.

Internal review of ISC

In 2020, an independent third-party, Goss Gilroy Inc., was commissioned by ISED to conduct an internal review of ISC's Challenge Stream. This study addressed a formal commitment to conduct an internal review of the ISC Challenge Stream three years following its launch. The review focused on the program's short- and medium- term objectives, and on activities undertaken between December 2017 and March 2020.

The review found that the program progressed towards its expected outcomes, despite the complexity of implementing the program which caused delays. Departments and agencies agree with the premise for the program and the ISC  challenge team is valued by participating businesses. ISC companies participating in the program were very satisfied with its design and implementation, especially the feature that limits participation to SMEs.

The report also found that the program's 21 sponsoring departments and agencies desired more tools to support their participation and to enhance awareness of the program within departments and agencies. Work has begun to address this suggestion. For example, the program has developed a user guide, released new web content, and started more working level meetings for departments to share ideas for early challenge development and lessons learned during implementation. More recommendations will be addressed in the coming fiscal year.

The Department's Audit and Evaluation Branch is conducting an internal audit review of the design and implementation of ISC to determine its effectiveness in supporting program delivery. The results of this internal audit review are expected to inform the department's approach to seeking renewal of ISC's authorities in late 2021.

Testing Stream

Intake and evaluation

Improvements to Testing Stream evaluation timelines
Open CFP – January 2021
  • Total proposals = 991
  • 579 proposal evaluations completed in the first 4 weeks (58%)
  • 843 proposal evaluations completed in seven weeks, by March 31 (85%)
  • Completed results will be provided in the next annual report.
COVID CFP – April 2020
  • Total proposals = 591
  • 185 proposal evaluations completed in the first 4 weeks (31%)
  • 287 proposal evaluations completed in seven weeks (48%)
  • 90% completed in four months
  • 100% completed in six months

The program issued two CFPs under its Testing stream, including a thematic CFP to support the government response to COVID-19. The COVID CFP was issued in April 2020 and an open CFP was launched in January 2021.

The Testing Stream has made key improvements to program timelines for both evaluations and leading up to contract award, even with the context of much higher numbers of applications.

With regards to evaluation timelines, many new evaluation functions were developed in the Innovation Canada (IC) web platform to assist the Testing Stream evaluation process, and a collaborative approach was undertaken to enable ISC human resources to better support evaluations. This resulted in shorter timelines – see the table for details.

In addition, best practices were developed based on lessons learned in COVID 19 CFP which will inform future thematic CFPs. The team is also undertaking multi-year planning to anticipate the strategic needs of ISC. Planning is underway to determine an optimal way to schedule multiple calls of different types within a fiscal year.

Matching and contracting

Pre-qualification to contract award
Milestone Previous standard 2020–21 process improvements
PSPC Service Standards 35 business days (seven weeks or longer) Reduced to five weeks
Reaching contract award Seven months, with some outliers as high as 11 months Goal was 6 months
Actual average of 5.5 months, with some contracts awarded as quickly as 2.5 months

Three GC organizations participated in the Testing Stream for the first time in 2020–21: the Canada School of Public Service, the Federal Economic Development Initiative for Northern Ontario (previously operated as an initiative of ISED), and Jacques Cartier and Champlain Bridges Incorporated (JCCBI - a Crown corporation).

The pressures on businesses and to respond to a global pandemic provided an incentive for ISC and PSPC to work faster than before while undertaking the same steps and due diligence in the contract award process. ISC realized several efficiencies in its processes to reduce the time between when a company is pre-qualified and receives a contract. This resulted in shortening average contract timelines quite significantly. Please see the table for details. These shorter time periods have become best practice.

Innovation spending

Testing Stream Awards in 2020-2021 by Province
Testing Stream Awards in 2020-2021 by Province
Provinces Contract value Number of awards
Alberta  $1,268,409.43 5
British Columbia  $5,124,036.83 14
Manitoba  $634,800.00 1
New Brunswick  $1,087,992.00 3
Newfoundland and Labrador  $553,776.52 1
Nova Scotia  $2,686,127.66 5
Ontario  $28,093,326.43 37
Prince Edward Island  $621,712.34 1
Quebec  $4,434,514.62 8
Grand total  $44,504,695.83 75

In 2020–21, under its new Testing Stream, ISC awarded over $44.5M through 75 R&D contracts. This level of spending is significantly higher than the program's core budget of $33.5M for the Testing Stream, and is enabled through the program design that permits departments to direct up to 30% of their ISC annual budget commitment to the Testing Stream. The level of spending this year is an important accomplishment for the program for
two reasons:

  • Firstly, R&D contracts can be more complex and challenging to complete on time and on budget than most other types of contracts.
  • Secondly, 74 of these 75 projects (98.7%) are being led by SMEs, most of which have little or no prior experience working with the GC. Gaining this experience is a key benefit for firms that participate in ISC. 

Testing partners

ISC provides the ability for testing departments to have an associate testing partner, meaning that a department will have the assistance of a third party to test the innovation. These partners have included entities managed by provincial, municipal, and Indigenous governments, hospitals, universities, and other applications. For the COVID-19 CFP, this ability proved very useful as several innovations were able to be tested in hospitals and health networks where COVID response was critical. Additionally, this is a key way that ISC is able to partner with Indigenous groups. The following testing partners have been involved in testing innovations through the COVID CFP and the January 2021 CFP.

Testing partners in 2020–21
Health Indigenous Municipal, Academic Other
  • Health Sciences North, Sudbury
  • Princess Margaret Hospital, Toronto General (University Health Network)
  • Horizon Health Network, Maritimes
  • The Ottawa Hospital
  • Alberta Health Services, Edmonton
  • Toronto Grace Rehab Centre
  • Cowessess First Nation
  • Yellowknife Dene First Nation
  • Kanahwa:ke Native Renewable Centre
  • Southeast Regional Service Commission
  • Independent First Nations Alliance
  • The Regional Municipality of York (York Region)
  • Prince George Airport
  • Halifax Innovation District
  • Port of Saint John and the Port of Montreal 
  • McMaster University - CL-2 Lab, Hamilton
  • The Ontario Tech University, Oshawa
  • Dalhousie University, Halifax
  • Alberta Pacific Forest Industries Inc.
  • The Responsive Group, (Real Property) Markham

Outreach and engagement

Total Challenge Stream applications in 2020-2021 by Province
Total Challenge Stream applications in 2020-2021 by Province
Applicant head office province Application count Percentage of total applications
Outside of Canada 6 0.5%
Alberta 112 10.2%
British Columbia 175 16.0%
Manitoba 22 2.0%
New Brunswick 15 1.4%
Newfoundland and Labrador 12 1.1%
Nova Scotia 33 3.0%
Ontario 514 47.0%
Prince Edward Island 7 0.6%
Quebec 186 17.0%
Saskatchewan 11 1.0%
Total 1,093 100.00%

ISC focused in 2020–21 on expanding its engagement methods to diversify from in-person events, which were not permitted due to the pandemic. However there were many successes around digital engagement which enabled the program to reach a high number of businesses.

ISC participated in over 20 events with innovation eco-system partners, and hosted webinars quarterly. The number of applications to challenges is growing with representation in every province.

The program realized an increase of 4,593 subscribers to its mailing list, for a total of 13,800 subscribers as of March 31, 2021. This includes umbrella organizations who further distribute ISC updates to their members. Additionally, the program grew its LinkedIn page to approximately 3,100 subscribers.

Outreach efforts have been critical to raising awareness of the program and specific challenges. Last year the program received 495 responses to challenges. In 2020–21, the Challenge Stream received 1,093 applications!

ISC horizontally connected and engaged with participating departments to share ISC content on and through other departmental social media channels to amplify reach. ISC strategically monitored engagement rates on posts to evaluate engagement and quantify overall platform reach. ISC grew its LinkedIn and newsletter following by posting, pro-actively reaching out, fostering relationships with innovation eco-system partners, and government organizations that support innovation.

Diversity outcomes

One of ISC's key objectives is to encourage and enable the participation of companies owned and managed by underrepresented groups. A number of initiatives have been launched or advanced this year to better support these companies.

  • In 2020–21, both the Challenge Stream and the Testing Stream added a category to track participation by firms owned by LGBTQ2+ identifying persons. The Testing Stream added several other categories to the statistical information section:
    • Percentage of youth (15 to 30 years old) in business ownership
    • Percentage of person with disabilities in business ownership
    • Percentage of the business owned by gender diverse person(s)
  • In 2020–21, the Testing Stream added a point rated criteria asking about the bidder's organizational policies and company culture related to Equality, Diversity and Inclusion (EDI).
    • The Challenge Stream has an existing point rated criteria which asks about public benefit, which includes inclusive business and hiring practices.
  • The Challenge Development template (used by departments and agencies to submit ideas for challenges) was reviewed in 2020–21 and work is underway to update the template to include criteria such as accessibility, gender equity, and social inclusion.
  • In 2020–21, the Innovation Canada sector launched a diversity challenge that companies can voluntarily sign up for the 50-30 Challenge. The 50-30 Challenge asks that organizations aspire to two goals:
    1. Gender parity (50%) on Canadian board(s) and senior management; and
    2. Significant representation (30%) on Canadian board(s) and senior management of other underrepresented groups: racialized persons including  Black Canadians, persons living with disabilities (including invisible and episodic disabilities), Canadians who identify as LGBTQ2+, and First Nations, Inuit and Métis peoples as founding peoples of Canada are underrepresented in positions of economic influence and leadership.
  • Innovation Canada Sector organized an accessibility audit completed by an independent third party which ISC took part in.
    • The purpose of this audit was to review the content and format of program and service delivery, documents, policies, forms, outreach, engagement products, and other related communications.
    • The results were provided in January 2021, and ISC will seek to implement the recommendations starting next year.  Some of these recommendations are: 
      • Including alt text on the website to accommodate screen reader users
      • Including options for gender neutral pronouns on application forms
      • Considering changing statistical information (which captures diversity metrics) from voluntary to mandatory
      • Include an inclusion statement on the ISC website
      • Made EDI commitments clear on public facing materials
  • ISC has partnered with members of the women innovation eco-system, and to the Indigenous innovation eco-system, to build-up the relationships with organizations that support women and Indigenous innovators across Canada. ISC participated in events for innovators from underrepresented groups (e.g. LGBT Chamber of Commerce Workshop and the Women's Enterprise Center).

Funding applicants and recipients

The following data tables describe the participation of firms to ISC in 2020–21.  Please note that this is based on voluntary self-identification by firms. 

Challenge Stream: Program applicants

Challenge Stream: Program applicants
Challenge Stream: Program applicants
Challenge Stream In ownership Majority ownership
Youth (15 to 30 years old) 21% 7%
LGBTQ2+ 20.5% 2.3%
Persons with disabilities 8% 2%
Indigenous Persons 6% 2%
Visible Minorities 36% 24%
Women 38% 9%

* Percentage calculated from 44 proposals rather than 1,903 as this category was added late in the fiscal year

Challenge Stream: Funding recipients

Challenge Stream: Funding recipients
Challenge Stream: Funding recipients
Challenge Stream In ownership Majority ownership
Persons with disabilities 3% 0%
Indigenous Persons 3% 0%
Visible Minorities 55% 26%
Women 52% 6%

Testing Stream: Program applicants

Testing Stream: Program applicants
Testing Stream: Program applicants
Challenge Stream In ownership Majority ownership
Youth (15 to 30 years old) 31% 6%
Persons with disabilities 15% 2%
Indigenous Persons 10% 1%
Visible Minorities 51% 23%
Women 57% 10%
Gender diverse person(s)** 19% 3%
LGBTQ2 person(s)** 20% 1%

** Two new categories added for the Testing Stream Call for Proposals released in January 2021. Businesses from this CFP will receive awards in 2021–22.

Testing Stream: Funding recipients

Testing Stream: Funding recipients
Testing Stream: Funding recipients
Challenge Stream In ownership Majority ownership
Youth (15 to 30 years old) 34% 5%
Persons with disabilities 14% 5%
Indigenous Persons 13% 3%
Visible Minorities 55% 20%
Women 59% 7%
Gender diverse person(s)** 0% 0%
LGBTQ2 person(s)** 0% 0%

Priorities for 2021–22

Support economic recovery in Canadian firms

Both the Challenge Stream and the Testing Stream will continue its core work to support the full spectrum of research and development (R&D) activities in Canada, supporting departments and agencies to identify and issue new challenges to innovative Canadian firms, and to test innovations. This will enable new R&D to take place, while stimulating the economy, creating specialized, high paying jobs, and growing small and medium-sized enterprises (SMEs).  

Increasing support for underrepresented groups

Underrepresented groups provide diverse perspectives that can greatly contribute to the innovation ecosystem and new research. Yet these groups face additional barriers in the realm of R&D such as getting their innovation to market, securing meetings, accessing funding, and exporting their innovation. By supporting underrepresented groups, ISC will aim to close the gaps and obstacles faced when getting their ideas to market.  Outreach is one pillar of this work, because in order for these groups to consider participating in ISC they must first become aware of the program and its benefits to assess if it is a good fit for their business.

Program renewal

Both the Testing Stream and Challenge Stream are moving towards a request to renew the program, as the current authorities and funding is currently expiring on March 31, 2022. Therefore, planning will take place over the coming fiscal year in order to prepare for this request. Engagement sessions are being planned for early in fiscal year 2021–22 in order to speak with past program participants and innovation ecosystem partners to learn about their experience with the Testing Stream (or its precursor, BCIP) and to gather their ideas about how ISC can better support innovative businesses.

Collaboration between new partners

ISC will continue to pursue opportunities to work collaboratively under the program with new partners, including provincial and territorial governments. The program will also engage GC organizations that have yet to participate in ISC, including Crown corporations, to inform them of its benefits.

Pathway to Commercialization

As noted above, a key achievement for 2020–21 was putting in place a framework for the Pathway to Commercialization. Now that this framework is established for both the Testing Stream and the Challenge Stream, it is anticipated that the first businesses will be eligible for the pathway within the coming years. As such, ISC will put in place appropriate processes, guidelines, and evaluations in order to ensure that the Pathway to Commercialization protocols will be ready to use once a company is at the appropriate stage of commercialization to access them.  

Advance integration between the Challenge Stream and Testing Stream

As of April 1, 2019 the Challenge Stream and Testing Stream (formerly the Build in Canada Innovation Program) were consolidated into one program. Since that time, numerous developments have taken place to fully integrate the two streams. In 2020–21, ISC will advance planning for future years including undertaking analysis to ensure a shared approach for data and reporting.


ISC is planning to strengthen its digital presence on social media and explore new digital tools to promote  opportunities to departments and agencies and to innovation eco-system partners. Work will continue to deliver educational webinars, and to attend and educate innovators and innovation events. Particular focus will be provided on increasing engagement, education and on-going dialogue with organizations that support women entrepreneurs and Indigenous entrepreneurs.

Annex A: ISC departments - mandated vs. projected spending

Departmental spending – 2020–21

Department Departmental Challenge Stream set aside for 2019/20 and ongoing
(1% of 2015–16 procurement + intramural R&D)
Challenge Stream Transfer to Testing Stream (up to 30%) 2020–21 total
DND $65,000,000 $3,152,422 $6,396,420 $9,548,842
PSPC $8,800,000 $1,115,000 $950,000 $2,065,000
SSC $7,600,000 $1,613,449 $2,280,000 $3,893,449
NRC $5,500,000 $4,600,541 $35,900 $4,636,441
AAFC $3,900,000 $2,275,842 $738,795 $3,013,637
NRCan $2,600,000 $1,746,750 $0 $1,746,750
ESDC $2,200,000 $0 $91,485 $91,485
RCMP $1,800,000 $0 $557,824 $557,824
ECCC $1,600,000 $2,096,212 $0 $2,096,212
DFO/CCG $1,500,000 $1,203,178 $0 $1,203,178
HC $1,400,000 $146,538 $0 $146,538
CSC $1,400,000 $370,554 $34,886 $405,440
CBSA $1,400,000 $376,719 $0 $376,719
CSA $1,300,000 $0 $0 $0
PHAC $1,300,000 $177,225 $0 $177,225
ISC (former INAC) $1,300,000 $0 $370,000 $370,000
CIRNA (former INAC) $1,300,000 $0 $0 $0
GAC $1,300,000 $43,377 $223,444 $266,821
TC $1,300,000 $1,150,000 $0 $1,150,000
ISED $1,300,000 $1,162,439 $0 $1,162,439
CFIA $1,300,000 $399,646 $286,221 $685,866
Sub-total (21 departments) $113,800,000 $21,629,893 $11,964,975 $33,593,866

Annex B: Success stories

Roswell Downhole Technologies

Kyle Fiolka, Director of Operations, Roswell Downhole Technologies

Roswell Downhole Technologies (DHT), a Calgary based company is an innovative TEC manufacturer with a wealth of experience in the oil and gas sector. Roswell's focus on cost-effective manufacturing and operational forecasts meant they were equipped with the knowledge to enter into the Made in Canada filtration material for the manufacture of N95 respirators and surgical masks challenge. Their pre-existing extrusion system helped set the stage for this proposal along with the influence of the Industrial Research Assistance Program (IRAP), where they were directed towards the Innovative Solutions Canada (ISC) challenge.

From innovation to prototype

Following their acceptance into Phase 1 of the Challenge Stream, Director of Operations, Kyle Fiolka, and the Roswell DHT team worked quickly to advance their innovation. They worked closely with the challenge sponsors at the National Research Council (NRC) to have the product achieve the technical level within the initial phase.

From there, Roswell moved into Phase 2, which encouraged the company to improve on their product output numbers. Their initial outputs were low but later improvements resulted in the production of nearly 58 tons per month, the equivalent of 58 million masks. This outstanding achievement enabled them to manufacture at a commercial volume in a brief amount of time.

Roswell's advanced scaleup led them to engage with more engineering experts and operational resources to help with the project. The Roswell team grew from three employees, to 19 in a span of six months!

Natural course of development

Leveraging their knowledge on the oil and gas sectors, Kyle Fiolka said that the transition towards the development of plastic extrusion equipment to manufacture N95 filter material was seamless. The organization made a conscious decision even prior to the grant being awarded to shift their focus.

ISC assisted in implementing timelines on this project which led to speeding up the process towards achieving Challenge Stream milestones. Roswell's access to proper laboratories for testing in partnership with NRC, and the increased demand to fulfill the market, everything seemed to fall into place.

Looking ahead

Following their successful completion of the N95 respirator challenge, ISC is happy to announce that Roswell DHT has been selected into Phase 1 of the COVID-19: Compostable disposable surgical masks and compostable disposable respirators used in the Canadian healthcare system challenge. Roswell DHT will continue their journey through ISC and will work towards being accepted into Phase 2 of the new challenge. ISC is encouraged to see their continued efforts in the development and manufacturing of innovative solutions to combat COVID-19.


Anna-Marie Maraslivan, VP Technology and Marketing

New 5G innovation

e2ip Technologies is a Montreal-based company that was created 30 years ago with a focus on control panels, such as ones found at gas stations, on airplanes and more. The company is constantly striving to extend its IP portfolio and saw a perfect opportunity when introduced to the Engineered Surfaces challenge, sponsored by Innovation, Science and Economic Development Canada (ISED). The challenge sought to address the issue of radio frequency propagation and WiFi interference, specifically on building materials and construction products.

Their solution? Thin, semi-transparent structures capable of reflecting and diffusing radiofrequency waves without the need for small antennas or a source of energy.

From idea to prototype

"When you're a small business, sometimes you don't have the resources to complete the proper research and access to the proper equipment to advance your innovation", said Anna-Marie Marasliyan, Vice-President of Technology and Marketing at e2ip. That's where Innovative Solutions Canada (ISC) came into play.

Following their acceptance into Phase 1 of the challenge, they were quickly able to pull in experts from the Communications Research Centre to prove that their technology was feasible and functional, which later led them to an invitation into Phase 2 of the Challenge Stream program. "The cost of commercialization can sometimes be way too large", stated Anna-Marie, which meant that Phase 2's acceleration process allowed them to develop enough of a prototype to showcase to industry. The awareness generated by these previous advancements also led them to a presentation to industry experts at CENTECH in Montreal, Quebec.

Hard work pays off

A few months later, another milestone was achieved by the company as they landed a Best Innovation in Smart Cities Award for their prototype from the CES 2021 Innovation Awards provided by the Consumer Technology Association. The CES Innovation Awards program is an annual competition honoring outstanding design and engineering in consumer technology products.

When asked about the importance of the funding and advancements through the program, Anna-Marie stressed the fact that the funding allowed them to focus on their innovation. The collaboration with the Government of Canada also gave the innovation a form of validation and credibility.

What the future holds

e2ip is currently preparing their go to market strategy and are in discussion with a property management firm where they hope to have a permanent demonstration of the technology to provide visibility to potential customers. They will also be demonstrating this technology live at CES 2022. As they continue their path forward, ISC will be watching attentively as they continue to disrupt the telecom industry with their creative smart city innovations.

IDP Group

Hamed Asl, Managing partner, IDP Group

Rethinking the box

IDP Group Inc. is a group of companies under one umbrella located in Chesterville, Ontario. The group has a seasoned 25-year background in interior construction, and they've used that expertise to shift their focus to innovative modular construction. The company's Managing Partner, Hamed Asl said to think of modular construction as building with Lego: they make the pieces in a factory and then assemble them into scalable structures. This became a key innovation focus for IDP Group in an industry where things like speed, cost, and material shortages have become areas of concern.

Finding the right fit

IDP Group noted that the ISC Testing Stream played a crucial role in testing and scaling their technology. Before applying, the group had a mockup of their modular intensive care unit (ICU) that they designed in response to hospitals reaching capacity due to COVID-19, but they struggled to find hospitals that were willing to try their technology. They decided to apply to the Testing Stream, and once they passed evaluation, they were matched with the Royal Canadian Navy as their testing partner.

The Navy was looking for an off-grid, insulated, modular, scalable, portable centre for rapid medical and technician training. Since simulation training can't be done from home, The Navy needed a COVID-resilient space where training could be refined and executed at a faster pace. For this test, IDP Group built the iNexTT Centre, which is drywall-free and equipped with advanced air filtration and easy-to-clean surfaces to help keep trainees safe from COVID-19. Hamed highlighted that the Navy's ambition to innovate made their partnership a great fit, noting that they pushed for a solar-powered facility and helped the group incorporate automation into their production lines. 

This project allowed IDP's prototype to be tested on a new scale, accelerating the course to their future plans for innovating larger buildings for a broader number of uses. Hamed noted, "to have a platform, to be exposed to the Navy, to find the right fit - it changes everything.  You now have proof for anyone else who wants to talk about precedent."

Future innovating

When asked about ISC's role in the company's successes, Hamed said, "the program is what gave us the opportunity. Things that would have taken 3–5 years are happening now." 

Since their initial test, IDP Group landed a second contract with the Navy, and has taken major strides to grow their team and expand the application of their innovation. The group has hired 25 new employees and is looking to hire more in the next year. They're currently designing new building models to address housing concerns in remote communities, and they're working with Indigenous communities to develop new infrastructure for schools, nursing stations, and more. They've also doubled their production footprint within their factories and are adding robotics and automation to their manufacturing process to help build multi-level structures.

In recounting his experience with ISC, Hamed commented that "the program empowers the spirit of entrepreneurship because it takes the risk out of testing and leaves room for growing from failure."


Jonatan Aronsson, President and Founder, CEMworks

CEMWorks is a Winnipeg based company that strives to revolutionize the world of driving as we know it.  A company that focuses on connected vehicles and smart cities, CEMWorks saw a perfect opportunity when they were notified through the Innovative Solutions Canada (ISC) newsletter about the new Connected Vehicle and Engineered Surfaces challenge launched by Innovation, Science and Economic Development Canada.

Importance of 5G

Connected vehicles are on their way to Canadian cities, and they will transform how people move around. In their application to the challenge, CEMworks proposed a comprehensive simulation platform for electromagnetic analyses of vehicles equipped with Frequency Selected Engineered Surfaces (FSES). The platform provides the necessary tools for simulation and deployment of FSES on vehicles in a virtual environment modeling the relationship between the car and the "smart city".

Cars being manufactured now have ways of communicating with one another, CEMWorks' innovation provides a service that can run simulations of this and investigate different scenarios. They provide physics simulators and make predictions of how these communications will interact with one another. This is crucial due to the fact that developing a model city without a simulation platform would be very costly.

Impact going forward

Not only could this have a major impact in the auto industry, since developing a model city without a simulation platform to predict proper outcomes would be far too expensive, it could also be in high demand in the health care industry.

CEMWorks is currently targeting potential beta testers, while also attending events and getting a deeper sense of this specific market. They figure there will be a huge demand going forward for this type of service.

ISC impact

As they move towards completion of Phase 2, the funding allocated from ISC gave them the opportunity to hire more talent to accelerate the innovation and move even closer towards commercialization.

Their goal is ultimately to commercialize the innovation.

Lind Equipment

Brian Astl, President, Lind Equipment Ltd

A call to action

Established in 1949, Lind Equipment Ltd is a leading innovator in portable equipment for construction, military, tunneling, and mining industries, among many others. When the COVID-19 pandemic hit, the Markham-based company leaned on their expertise in lighting to explore an improvement on disinfecting practices by using UV-C rays emitted from LEDs to kill the virus. This new focus equipped Lind to apply for funding from Innovative Solutions Canada's (ISC's) Testing Stream, which called on innovators for prototypes to help combat the spread of COVID-19.

Innovation as a process

Lind's Apollo UVC LED Light was originally created to decontaminate and reuse personal protective equipment (PPE) while Canada experienced a shortage in the early stages of the pandemic. As the PPE shortage was resolving, the need for decontamination remained. It was through ISC funding that Lind could deploy and test the effectiveness of their innovation in other settings. They landed their contract with Global Affairs Canada (GAC) to decontaminate the mailroom, distribution centre, elevators, and the clothing worn by Commissionaires.

Lind's president, Brian Astl, was very pleased with the company's partnership with GAC, noting that they offered valuable feedback during the test. He highlighted that "innovation is a process [...] it's trying, failing, trying, succeeding, shifting - it's not a one and done kind of thing." The length of the test with a dedicated partner provided an environment for innovation to thrive as the company collaboratively worked through their use case testing.

Evolving with the market

With over 50 years of providing reputable service under their belt, Lind is showing no signs of slowing down. The Apollo UV-C LED Light is now a permanent addition to Lind's operations, and the company is working on evolving the ways in which they could apply this technology to other settings. Brian noted that GAC's test feedback helped the company gain perspective on the user experience, saying"the more you can supplement scientific lab data with real-use data, the better." The company also found their government contract helpful when trying to prove legitimacy to the market.

Accomplishments out of innovating

In 2020, Lind won two awards with the help of the credibility from their government contract. They were an Excellence Award recipient on Canada's Safest Employers for the Innovation in Industrial Hygiene Award, and they won the Pro Tool Innovation Award for the most innovative in safety lighting equipment. In addition to the validation testing of the technology accomplished through ISC, Lind partnered up with Western University's ImPaKT facility (Imaging Pathogens for Knowledge Translation) to test the innovation's efficacy on eliminating COVID-19. Through this partnership, Lind has received the scientific seal of approval.

Apart from their many accomplishments, Brian emphasized that it feels good to see the real-life impact that this innovation has had in protecting people from COVID-19: "at the company, we can all very proudly look out and go, 'we have made an impact, we've helped, we've done something that has kept people safe'."