Details on Transfer Payment Programs (Exceeding $5 million during the reporting year)

Name of transfer payment program: Investments in Forest Industry Transformation Program (Voted)

Start date: June 17, 2010

End date: March 31, 2014

Description: The objective of Investments in Forest Industry Transformation (IFIT) program is to support Canada’s forest sector in becoming more economically competitive and environmentally sustainable through targeted investments in innovative technologies. This will lead to a more diverse, higher-value product mix, including bioenergy and renewable power, biomaterials, biochemicals, and next-generation building products.

The Program will fund innovative projects implementing transformative technologies at the pilot or first commercial scale that direct wood fibre, and by-products from wood processing, into higher-value uses. Such projects will increase the value generated from wood fibre, diversify product lines for the forest industry, and produce new bio-products or renewable energies. By providing funding to Canadian forest firms for capital investments to advance new technologies towards full, commercial-scale implementation, this Program will broaden and build upon previous departmental investments in forest sector transformation.

This transfer payment program does not have any repayable contributions.

Strategic outcome: 1) Canada’s Natural Resource Sectors are Globally Competitive

Results achieved: To improve commercial and environmental sustainability in Canada's forest sector, the IFIT program is supporting the production of a new cross-laminated timber product that provides a renewable alternative to more traditional, energy-intensive building materials such as concrete, as well as a new manufacturing facility that will prefabricate a novel wood-based panelized housing system that will be highly energy efficient.

To help foster the creation of a more diverse product mix for the forest sector, the IFIT program funded six new high-value technologies at forest product facilities. These projects will pioneer two advanced bio-refining processes, one improved engineered wood product, one novel wood-based building system, a new bio-energy product and a forestry enhancement process for the sector. When added to the program’s previously existing portfolio of new green energy, bio-chemicals, and bio-composite projects, IFIT is now pioneering a total of 12 new high-value processes, technologies and products at the commercial scale in the Canadian forest product sector.

All projects funded by the IFIT program have led to the establishment of some new business relations with other sector firms. In particular, three out of the six projects funded this past year have led to direct collaborations with non-traditional sector firms with established traditional forest product companies. In these cases, the collaborations specifically led to direct project participation by a bio-chemical production and engineering firm, a horticultural products firm and an advanced wood design and building engineering firm.

Comments on variances: Seven highly innovative projects (6 new, and 1 ongoing) benefited from $21.7 million in federal investments during 2012-13 to support the diversification and transformation of Canada’s forest sector through the production of new bio products and renewable energy. Funds representing $6.4 million were returned to the fiscal framework due to the combined effect of the Deficit Reduction Action Plan and the withdrawal of a large-scale project at the end of the fiscal year.

Audits completed or planned: An audit of the IFIT program’s management control framework was conducted in 2012-13. The program was also one of six federal programs selected for audit by the Office of the Auditor General in 2012-13 as part of its review of grant and contribution program reforms. Recipient audits were performed on 50% of the projects that were funded in 2010-11 and 2011-12.

Evaluations planned: A program evaluation is currently underway and scheduled for completion in 2013-14.

Engagement of applicants and recipients: Program applicants are supported through a dedicated program website (http://cfs.nrcan.gc.ca/pages/232), which provides access to program guides, eligibility requirements, and project announcements, as well as program administration contact details (ifit@nrcan.gc.ca). Calls for proposals were widely advertised through public press releases, e-mail distribution lists, and liaison with a wide range of associations, other government departments, and other stakeholders. Selected program recipients are further engaged through regular communication with program administrators, who monitor progress on the achievement of program objectives. During the last year of the program, targeted outreach activities will communicate program results and highlights to stakeholders.