Points to Consider when Applying
to the Rural Economic Development (RED) Program
Project
Description
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Define your project
The project must:
- Be a partnership and be incrementally new work for each of the partners
to be eligible
- Have new costs for resources associated solely with the project that
partners would not have incurred individually
- Not be considered business as usual, a start-up and/or regular business
expansion
- Not support the costs of sales transactions, and
- Fit the eligibility criteria
Tip: Describe the project by stating the purpose, who is doing
what, what economic
barriers exist and how the project result will overcome the barriers.
The project must
have clear start and end dates.
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Set Clear Project Objectives and Deliverables
Objectives must be clear and measurable:
- Use numbers (e.g., number of jobs created/retained, level of new investment,
number of community groups affected, number of new technologies)
- Describe direct and indirect economic benefits
- Avoid downstream broad statements not attributable to the results
of the project
- Describe project deliverables (e.g., feasibility reports, engineering
designs, construction completions, events)
Tip: Keep the number of objectives low (e.g., two or three main
objectives and focus them on the project and its deliverable outcomes).
Avoid objectives that are beyond the scope of the project.
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Build Strong Partnerships
Partners must:
- Invest in the project (cash signals a stronger commitment than in-kind
expenses) - the more the better
- Be at arms-length to each other
- Sign an Agreement with the province and assume joint and several liability
for the completion of the project
- Individually have a minimum of $2 million in general liability insurance
before signing the Agreement (staff will be requesting a copy)
- Provide documentation that verifies the legal name of their company
or organization and their right to sign an agreement on behalf of the
organization
- Explain their role in the project based on history and/or experience
Tip: To avoid problems later, be sure to provide full disclosure
of the requirements to be a partner, and the requirements of partners
to jointly sign an Agreement with the province.
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Structure your Partnership
Structure the roles:
- Partners have a vested (and financial) interest in
completing the project. Any goods or services provided to the project
by partners are not matched by funding but are considered as in-kind
contributions to the project
- Supporters to projects are individuals or organizations
who wish to contribute financially to the project but do not wish to
be a partner on the project. Their contributions are best invested in
the project through one of the partners
- Contractors are individuals or organizations whose
primary role in the project is to provide goods and
services for payment
Tip: Determine up front who the partners will be, who may wish
to contribute to the project with an investment only and who may want
to be paid as a third-party contractor.
-
Justify the Need
- Clearly define the economic barriers being addressed
- Submit copies of previous feasibility and other studies that justify
and support the need for the project
- Provide letters of support to demonstrate community/industry support
for the project
Examples of barriers to economic development:
- Lack of skilled labour and training programs to attract new businesses
and manufacturers or to retain existing ones
- Lack of comprehensive local or regional economic development plans,
supports and action
- Limited access to health care services
- Lack of capacity to capitalize on new markets and new technologies
- Lack of access to information and technology
- Limited municipal/community capacity for economic development and
business development
- Youth and trained workforce out-migration due to the lack of jobs
Tip: Provide evidence that supports the need for the project by
attaching copies of information including previous feasibility studies,
publications, success stories for similar or previous projects, and letters
of support.
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Explain the Economic Benefits
The project must:
- Benefit rural Ontario in measurable ways regardless of the location
of the applicants
- Have economic benefits at four levels:
- Applicants
- Other stakeholders
- Surrounding rural community or region
- Rural Ontario
- Use numbers whenever possible
- Provide direct benefits (preferable) rather than only indirect benefits
The benefits must:
- Be measurable within the time frame of the project
- Not adversely impact the competitive marketplace (i.e., provide advantages
to one competitor over others in the same market)
Tip: Avoid providing benefits that accrue only to the partners
or to the community at-large. Good projects provide a broad range of
economic benefits at all levels.
-
Technical Viability
All projects are independently evaluated by at least two reviewers for
their technical viability. Elements reviewed include:
- Detailed work plans and precise objectives used to document progress
and deliverables
- Technical complexity and level of innovation
- Realistic costs and timelines
- Ease of implementation of results
- Fit with other known local or regional initiatives
Tip: Describe the technical do-ability of the project including
the expertise required, and a detailed work plan.
-
Strong Financial Plan
Sources of funding are critical to demonstrate the level of commitment
of the applicants to the project:
- Strong projects have cash contributions from all partners (the more
the better)
- In-kind and/or ineligible costs must be included - they are used to
measure leverage along with cash contributions
- Non-secured sources of financing (e.g., fundraising) must be guaranteed
by the partners in the event of potential shortages in raising all contributions
Other sources of funding are not uncommon, but
- Cash from supporters of the project (not applicants) should flow through
the partners (since they are liable for any shortages through the contract)
- Funding from the federal government is permitted as long as the combined
provincial and federal support does not exceed the maximum of 90% public
funding
- In most cases, high levels of government funding is not considered
to be a strength of a project
- Funds from other provincial ministry sources are not eligible for
matching. If possible, split the costs eligible for these funds out
of the RED project
- Northern Ontario Heritage Funding Corporation (NOHFC) and FedNor funding
is eligible to be combined with RED funding
It is important to note that total government funding cannot exceed
90 per cent. Also, the percentage of RED funding may be changed during
the approvals process.
Tip: Prior to receiving payments from the program, applicants
must confirm that all sources of funds are available to the project
and that there is cash for the project prior to receiving funding from
the program. This may include receiving audited financial statements
from applicants. Generally, applications should request up to 50 per
cent of the required cost of the project. Requests for funding greater
than 50 per cent must be substantiated. Reasons may include a lack of
funds for volunteer groups, or the documented inability of applicants
to raise more funds through
conventional financing.
-
Uses of Funds
It is critical for the applicants to include financial details in their
project descriptions and work plans.
- All proposed expenditures are classified as eligible or ineligible
for matching (as described in the application guidebook)
- Transactional costs (e.g., support of sales) are not matched
- Staff may request documentation on all bidding of contracts over $25,000
as well as copies of leases, contracts and other documents
- Expenditures are not eligible until the project is approved by the
Minister of Agriculture, Food and Rural
Affairs
Tip: Report planned expenditures in as much detail as possible
including, where possible, quotes received that support the figures. Expenditures
should be listed in a line item statement (i.e., a list of expenditures).
Claims of incurred expenditures should be allocated to the planned fiscal
quarter.
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Common Strengths and Weaknesses of Projects
Common Strengths include:
- Proposal fits one or more priorities
- Well-defined, new project
- Measurable objectives
- Broad, financially-committed partnership
- Innovative technology
- Secured funding
- Minor capital only
- Sustainable following funding
Common Weaknesses include:
- Poor fit with priorities
- Normal business start-up or expansion
- Outcomes are beyond scope or timing of project
- Narrow partnership with only one major investor
- Indirect benefits not accruing to rural Ontario
- Not technically viable or substantiated
- Unsecured funding
- Major capital expenditures
Contact Information
Rural Economic Development (RED) Program
Ontario Ministry of Agriculture, Food and Rural Affairs
1 Stone Road West, 4NW
Guelph, Ontario N1G 4Y2
Tel: 1-888-588-4111
Fax: 519-826-4336
Email: red.omafra@ontario.ca
www.ontario.ca/rural
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For more information:
Toll Free: 1-888-588-4111
Fax:1-519-826-4336
E-mail: rural.omafra@ontario.ca
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