accelerating innovation · 2019-08-21 · accelerating innovation. alberta innovatestehnolog tres i...

accelerating

innovation

Alberta Innovates-Technology Futures BUSINESS PLAN 2016-19

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The Government of Alberta has given the Corporation the following responsibilities:• Support,fortheeconomicandsocialwell-beingof

Albertans,researchandinnovationactivitiestargetedatthedevelopmentandgrowthoftechnology-basedsectorsandalignedtoGovernmentofAlbertapriorities,including,withoutlimitation,activitiesdirectedatthecommercializationoftechnologyandtheapplication ofknowledge.

• Meettheresearchandinnovationprioritiesofthe Government in the following areas or in a combinationoftheareas: agriculture; forestry; energy; theenvironment; health; anyotherareadeterminedundertheregulations;

• Fosterthedevelopmentandgrowthofnewandexistingindustriesthroughresearchandinnovation.

AITFwillcreatevaluethrough:• Increasedeffectivenessandintegrationofplanning,

fundingandservicedelivery.

• Alignmentofprogramsandinvestmentstowardpriorityareasandoutcomes.

• Improvedcoordinationbetweenbusiness,technicalandnetworkingservices.

• Increasedprogramandinvestmentfocusoncommercializationandproductdevelopment.

• Improvedfacilitationofknowledge,intellectualproperty(IP)andskilltransferwithinthesystem, andbetweenacademia,industryandgovernment.

• Improvedaccountabilityandoutcomesthroughintegratedperformancemonitoringandcontinuousimprovementprocesses.

the purpose of the corporation is to

make strategic and effective use

of government of alberta funding to

meet the research and innovation

priorities of the province.

Mandate (2010)AlbertaInnovates-TechnologyFuturesisanintegralpartofAlbertaInnovates–astrategicallyalignedandintegratedprovincialresearchandinnovationsystem.UnderthebannerofAlbertaInnovates,thecorporationworkswithkeyinnovationsupportagencies,withpubliclyfundedpost-secondaryinstitutions,industryandgovernmenttofurtherresearchandinnovationintheprovinceandmakeAlbertamorecompetitiveintheglobaleconomy.

bridging the gap between ideas, application &

commercialization

Imaging Specialist Shauna Cameron, member of the Reservoir and Geosciences team, prepares samples for computed tomography at the AITF Mill Woods CT Lab, Edmonton, Alberta.

AlbertaInnovates-TechnologyFuturesBUSINESSPLAN2016-19

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Table of ConTenTs

MandaTe 3

exeCuTive suMMary 7

Planning ConTexT 10

strategic Collaboration 11

Competitive Context 16

sectors, business streams 30

risk ManageMenT 44

CorPoraTe goals and PerforManCe Measures 47

budgeT 52

Consolidated statement of operations 52

allocations to key outcomes 53

CaPiTal Planning and leasing arrangeMenTs 54

Capital Plan 54

lease arrangements 55

Pre-approved Priority Projects 55


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AITF operates 1 million sq. ft. of product and process development and scale-up facilities in Edmonton, Calgary, Devon and Vegreville. This also includes a 300 hectare research farm, three greenhouses, and 36 growth chambers.


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ExEcutivE Summary

alberta innovates-technology futures (aitf)

has been a key player in alberta’s innovation

system since its inception as the alberta

research council in 1921. since that time, aitf

and its sister alberta innovates corporations

have built portfolios to focus on innovation

across a number of key areas to support

economic and social benefits for albertans.


8 BackgroundSuccessfulcommercializationofproductsandservicesisthedesiredoutcomeofanyinnovationsystem,andhasbeenaparticularchallengeforCanada.ResearchshowsCanadaisatthetopofOrganizationforEconomicCo-operationandDevelopment(OECD)countrieswhenitcomestothegenerationofideasandhavingastrongtalentpool.Howeverthetranslationofideastocommercialapplications,whichiswhatultimatelygenerateseconomicoutcomes,islagging.AccordingtotheConferenceBoardofCanada,Albertaplaces15thamongthe26comparatorjurisdictionsinasurveyofOECDcountriesandearns a“C”gradeonoverallinnovation.

ThecurrenteconomicdownturnunderscorestheurgentneedtoaddressAlberta’sinnovationperformanceanddiversifythegoodsandservicesproducedandmarketsserved.Wewelcomerecentchanges,suchasthecreationofthenewMinistryofEconomicDevelopmentandTrade(EDT),andthe2030InnovationTargetsdevelopedby theProvince’sInnovationCollaboratories.Thesechanges haveelevatedtheinnovationagendaandprovidethenecessaryclarityforAITFtoaligninvestmentstothe 2030InnovationTargets.

ValuePropositionWorkingcloselywithEDT,AITFisuniquelypositionedwithintheAlbertainnovationsystemtosupportboththepublicandprivatesectorandincreaseinnovationoutcomesfortheprovince.Addressingthegapbetweenideas,applicationandcommercializationisAITF’sdefiningpurpose.Thisisaccomplishedthroughthreeprimaryactivities:AITF’sroleasafacilitatortoenhancecollaborationandlinkageswithindustry,smallbusiness,academiaandgovernment;de-riskinginnovationthroughAppliedResearchexpertise;anddirectinvestmentinhigh-potentialsmallandmedium-sizedenterprises(SME’s).TakentogethertheseactivitiesstrengthenAlberta’seconomicbasebyincreasingthenumberofjobs,creatingvalue-addexports,enhancingproductivity,andspurringdiversification.

Functionally,AITFisorganizedinthreemajorstreams:CampusAlberta/BasicResearch,AppliedResearch,andCommercialization.Ineachstream,thecorporationsupportstheachievementofAlberta’s2030InnovationTargetsintheProvince’spriorityindustrysectors. Thisorganizationalstructurefacilitatescollaboration betweenindustry,smallbusinesses,government, andCampusAlberta.

GoingforwardAITFisfocusedonbridgingthegapbetweenideasandvaluecreationbyacceleratingthedevelopmentandadoptionofnewtechnology.ThefollowingsectionshighlightAITF’sspecificfocusareasandthetoolsetavailabletosupporttheachievement ofthe2030InnovationTargets.

CommercializationTheCommercializationstreamprovidessupporttohigh-growthpotentialSMEsbyproviding:

• Non-dilutivecapitaltoSMEsthroughmultipleprogramssuchastheIndustryAssociatesprogramwhichallowsSMEstohiretherightskillsetstodevelopandmarkettheirinnovativetechnologiesandtheProductDemonstrationProgramwhichlinksSMEstofirstcustomers.ThisabilitytodirectlysupportSMEsisacompetitiveadvantagefortheProvince,aspublicsupportforinnovationinCanadaislargelycenteredaroundindirectsupportmechanismssuchasScientificResearchandDevelopment(SRED)credits;

• BusinessmentorshipexpertisethroughourTechnologyDevelopmentAdvisorsandaCapitalAccessTeamwhichsupportsAlbertaSMEslookingforfundingbeyondthepublicsector.

TakentogethertheseinitiativeshelptoacceleratethecommercializationactivitiesofAlbertaentrepreneurs,andgeneratestrongeconomicoutcomesfortheprovince.Thisbusinessstreamfocusesonhigh-growthpotentialtechnology-basedSMEsandtheresultsfromtheseprogramsshowthefollowingoutcomesachievedonaverageoverthelast4years:

• Onenetnewjobwascreatedforevery$50,000infundingsupport;

• SMEsachieved$4.80inincrementalrevenuegrowthforeverydollarfunded;

• 81%ofthejobscreatedand74%ofthegrowth in revenueswasoutsideoftheenergysector;and,

• 53%ofAITF-supportedSMEsexportedgoods andservicescomparedto10.4%ofCanadianSMEs.

IntheupcomingyearstheCommercializationteam willbefocusedonlaunchingnewprogramsaimed atscaling-upAlbertaSMEs,enhancedreporting andimprovedsystemintegrationactivitieswithin theRegionalInnovationNetworks.

CampusAlberta/BasicResearchTheCampusAlberta/BasicResearchportfolio providesfundinginsupportofearlystageresearch anddevelopmentactivitiesincluding:

• Over40Chairsacross4CampusAlbertainstitutions;

• MultipleCentresofExcellencethatactascollaborativehubswheremultidisciplinaryteamsperformresearchanddevelopmentworktofindsolutionstochallengesfacingindustry;and


9• Morethan400GraduateStudentScholarshipsfocusedinresearchareasinInformationandCommunicationsTechnology(ICT),Nanotechnology,andOmics.

Lookingahead,AITFwillbuildgreaterlinkageswithindustryandmovetheportfoliotowardsstrongeralignmenttosector-focusedinnovationtargets.Thereisgrowingrecognitionoftheneedtore-focustheseprogramstoalsoensureAlbertacompanieshaveaccesstoapoolofjobready,highlyqualifiedskilledpersonnel(HQ/SP)tosupportAlberta’skeyindustrysectors.

AppliedResearchAITF’sAppliedResearchfunctionsupportsthedevelopmentofgloballycompetitivebusinessesbybothde-riskingandacceleratingtheadoptionofnewinnovativetechnologies.ThescopeandscaleofAlberta’sAppliedResearchcapacityisuniqueamongCanadianprovinces,andtheCorporation’sfocusoninnovationinAlbertaenablesustoidentifyandsupportopportunitiesthatmaybeoverlookedbynationalprograms.

AppliedResearchgeneratesindustry-fundedresearch ofapproximately$60millionperyearthroughitsresearchandcontractservicesandreceives$33millionperyearinprovincialfunding.Thesefundsareusedto:

• Createjointindustryandgovernmentinitiatives, incriticalsectorssuchasfood-agricultureandforestry;

• Supportmorethan600Alberta-basedclientsacceleratetechnologyadoption,increasingproductivityandcompetitiveness;

• Maintainaccesstooveronemillionsquarefeet ofresearchspaceinfourlocations(Edmonton,Calgary,VegrevilleandDevon);and

• Offeraccesstoexpertiseofmorethan450techniciansandresearchersinscientificareas whichareajurisdictionalpriorityforAlberta.

Lookingahead,AppliedResearchwillfocusonsupportingincreasedindustrycompetitivenessthroughreducingproductioncosts,developingvalue-addedproducts,andincreasingaccessforourSMEstolocalandinternationalmarkets.

SectorsActivitiesinthethreefunctionalstreamsarealignedwiththeprovincialgovernment’sinnovationpriorities,andleveragetheCorporation’scompetitiveadvantagesinAlberta’skeysectorsofenergy,environment,food-agriculture,fibre/bioindustryandhealth.Beloware someexamplesofAITF’scurrentactivitiesineachsector:

• Energy–engagedinjointindustryresearchtoimproveleakdetection,measurementandmitigationmethodsforcorrosioninpipelinesystems;

• Environment–fieldtestingnewapproachesandtechnologiesformonitoringgreenhousegas(GHG)reductions,andtraditionalecologicalknowledge;

• Food-Agriculture–facilitatingtheextensionof leadingedgescienceforthelivestockindustry;

• Fibre/Bio-Industrial–expandingdemandforengineeredwoodproductsandOrientedStrandBoard,particularlyinChina;and,

• Health–activelyparticipatingontheHealthCollaboratorytoinfluencethedirectionofhealthinnovationinAlberta.

DuringtheyearAITF,inpartnershipwithEDT,willworkoncreatinganewSectorOfficeintheareaofEmergingTechnologies.Ineachsector,partnershipshavebeenbuiltwithrelevantgovernmentandprivatesectorclientstobuildsynergiesandleverageexpertise.AITF’ssector-focusedapproachincreasesthelikelihoodandspeedofoutcomes,whichdriveseconomicprosperityandthesocialwell-beingofcommunities,companies,andindividuals.

ResponsiveCultureCreatingaculturewhichisresponsivetotheneeds ofthediverseclientbaseweserveisnecessaryto wintheracetoinnovation.Actionssuchasreducing thetimetoprocessgrantstoSMEsfromoverfour monthstosixtoeightweeks,increasingtheflexibilityofIndustrySupportPrograms,andredesigningourlargestAppliedResearchIndustryConsortiumProgramtobothincreaseengagementandshareprojectmanagementresponsibilitieswithindustry,areallexamplesofAITF’scommitmenttocontinuousimprovement.

AITF’sFinancialOutlookAnnouncedinthe2016ProvincialBudgetandaccompanyingtheconsolidationofthefourAlbertaInnovatesCorporations,isaplanned$45millionreductioninfundingfromtheGovernmentofAlbertatothenewAlbertaInnovatesCorporation.Thisisduetothecurrentfiscalrestraintsrequiredofallprovincialagencies.TheCorporation’sleadership,incollaborationwiththeGovernment,willmanagethebudgetreductionbysearchingforcostsavings,leveragingpartnershipstocreatevalue,andwherepossibleextendingexistingcommitmentsoverlongerperiodsoftime.

AllfourAlbertaInnovatesCorporationsandtheEconomicDevelopmentandTradeareworkingcollaborativelytomanagetheimpactonoutcomes.Atthistime,AITF’sportionofthe$45millionreductionis$13.7millionandwillbeprimarilyobtainedfromreductionsinprogramspendingwithinBasicResearch/CampusAlbertaandCommercialization.


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the key to the effectiveness of

alberta’s innovation system


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aitf has a long history of

collaboration with industry,

government and campus

alberta. such collaboration is

critical to the effectiveness of

alberta’s innovation system.

background

collaboration exponentially

increases both the speed and the

likelihood of successful outcomes.

this is accomplished by expanding

the investment pool, raising the

quality of mentorship and building

the networks necessary to get

the right information. all of these

contribute to stable, sustainable

enterprises capable of transforming

the economy.

as a small jurisdiction, collaborative

opportunities with partners from a

variety of regions and organizations

helps to raise not only the chances

of success for alberta’s innovators

and entrepreneurs, but also the

province’s profile on the

international stage.


12 ProvincialCollaborationEconomicDevelopmentandTradeWiththecreationoftheMinistryofEconomicDevelopmentandTrade(EDT),Albertahasraisedtheprofileof,andplacedthenecessaryfocusontheneedforeconomicgrowthanddiversificationintheprovince.Thisdemonstratesthepriorityourgovernmentplaces onjobcreation,innovation,supportingsectors,attractinginvestment,andexpandingandenhancingmarketaccess.AITFisakeypartnerinachieving thisgoalthroughitsactivitiesinanumberofkey economicsectors.

OneofthewaysinwhichAITFisworkingcloselywithEDTisthroughtheTechnologyCommercializationPlan,ajointinitiativeexploringwaystoalignandintegratekeyorganizationsandsupportsystemswithinthetechnologycommercializationsysteminAlberta. ThisinitiativeisdescribedinmoredetailintheCommercializationsectionofthisbusinessplan.

InnovationCollaboratoriesandtheDraft 2030InnovationTargetsTheGovernmentofAlberta,throughEDT,hasestablishedInnovationCollaboratoriesintheareas ofhealth,energy,environment,fibre/bioindustry, food-agricultureandemergingtechnologies. Currently,membershipcomprisesofGovernment ofAlbertadepartmentsandagenciesthatmake innovationinvestmentsand/ordeliverprograms. TheseCollaboratoriesactasacatalystforinnovationwithinAlbertaandprovideguidanceonAlberta’sstrategicinnovationagendatofocusandaligntheinnovationecosystem.AITF’sSectorLeadsare membersoftheirrespectiveInnovationCollaboratories,andAITF’sportfolioofinvestmentscontributestoall fiveofthesesectors.

Usinginputfromindustry,academia,governmentministriesandagencies,theCollaboratorieshavedevelopedtheDraft2030InnovationTargetstofocusresearchandinnovationinvestmentsinpriorityareasperceivedtohavethegreatestgame-changingvalue forAlbertans.ThesetargetsaredetailedforeachsectorintheCompetitiveContextsectionofthisbusinessplan.Solutionsproposedtoachievethesetargetsincludetechnologydevelopmentanddemonstrationaswellasprocessinnovation.AITFhasaligneditsbusinessstrategiestothe2030InnovationTargetsand OutcomesasoutlinedintheDraftAlbertaResearch andInnovationFramework.

AITFcanplayakeyroleinsupportingacceleratedprogresstowardsthe2030InnovationTargetsby:providingsectorandtechnologyexpertiseforimprovedportfoliomanagement;offeringaccesstopilotfacilitiesandexpertise;implementinginternationalandinter-jurisdictionalpartnershipprograms;buildingnetworksamongmulti-nationalenterprises(MNEs)andAlberta’ssmallandmedium-sizedenterprises(SMEs)andresearchers;deliveringprogramsandexpertisetosupportSMEsdevelopingandscaling-upnewproductsorprocesses;andmonitoringprogressandimpact ofinvestments.

IndustryCollaborationSMEMentorshipandGuidanceRecognizingtheimportanceofstrategicmentorshipandguidanceincreatingsuccessful,sustainablebusinessesoutofinnovationsintechnologyorservices,AITFhasbeguntoplaceincreasedemphasisontheroleplayedbyourExecutiveBusinessAdvisors(EBAs)andTechnologyDevelopmentAdvisors(TDAs).AITF’spositioninthisspaceisunique–ourEBAsdonotreceiveanequitystakeinthebusinessestheymentor,andtheSMEsreceivethesevaluablementorshipservicesatnocost.

TheEBApositionconnectsseniorexecutiveswithaportfoliooflaterstageSMEswhoareinneedofexecutivelevelsupportandguidance.AllofourEBAshaveservedinseniorexecutivepositionsinlargeprivatesectorcompanies,andhaveabroadrangeofskills,includingbusinessmanagement,developmentandstructuring,corporatefinance,investmentbanking,privateequity,mergersandacquisitions(M&A),andduediligence,amongothers.Theseexperiencedexecutivesalsoworkwithourcommercializationteamtoprovidecoachingandmentorship,financingsolutions,andcorporatedevelopmentsupporttogeneratestronggrowthoutcomesforAlbertaSMEs.

TDA’sareresponsibleforengagingandadvisingSMEsinbusinessdevelopmentandtechnologydevelopmenttocommercializationactivities.Astrustedadvisorsandmentors,TDAsworkwithSMEsonproductivity,innovation,business,marketing,productdevelopment,andprojectmanagementactivities.Theyactaspro-activeconnectorsandnavigatorsforSMEstoaccessAlberta’sInnovationSystemprogramsandservices,RegionalInnovationNetworks(RINs),non-governmentorganizationsandgovernmentresources.


13OurEBAsandTDAsplayakeyroleinAITF’sstrategicshiftawayfromsimply“writingcheques”tofundinnovation–todevelopingpartnershipsthroughmentorsandfacilitatorstoacceleratejobgrowthandeconomicdiversification.AITFhaswitnessedatremendousincreaseintheviabilityandgrowthoforganizationsreceivingstrategicguidanceandmentorshipcomparedtothosewhoreceiveonlyfinancialsupport.Byofferingmentorshipandleadershiptotechnically-mindedSMEs,AITFisabletocultivatesustainablebusinessesoutofinnovation, andbetterdeliveronourmandate.

ConsortiumsAITFhassuccessfullyestablishedseveralindustryconsortiaaimedatsolvingindustry-specificchallenges.Theseconsortiumsaredesignedtode-risktheinnovationprocessbyallowingorganizationswithsimilargoalstopoolresourcesandsolveproblemscollaboratively.• MARIOS(MaterialsandReliabilityinOilSands):

Establishedin2009,MARIOSisa31memberR&Dconsortiumwhichbringstogetherbothsuppliersandendusers.ThisconsortiumismanagedbyAITFanddirectedbytheoilsandssectortotacklematerials,equipment,andmaintenanceandreliabilityissues. ThegoalofMARIOSistodevelopknowledgeandvalidatetechnologiestosignificantlyreducedowntime,andimproveoperationalreliabilityandproductivityintheoilsandsindustry.

• AlbertaResearchCouncilCoreIndustry(AACI)ResearchProgram:Establishedin1984,AACIisaworldclass,12memberR&Dconsortiummanaged byAITFanddirectedbytheoilsandsindustrywith thepurposeofdevelopingandimprovingeconomicallyviablein-siturecoverytechnologiesforheavyoiland bitumenresources.AACIiscreditedwithcreating over$2billioninannualeconomicimpactfortheProvinceofAlberta.

WhilethisconsortiumconsistsofforwardlookingplayersinvestinginR&D,AITFhastakensome proactivestepstoensureAACI’scontinuedrelevancyfollowingthedramaticandsustaineddropinoilprices.OnemethodofachievingthisisthroughindustrypartnersactivelyselectingandmanagingtheAACIprogramsthroughStrategicTaskGroups.ThisallowsAITFtoensureresearchprioritiesareinlinewiththenewrealitiesoftheoilandgasindustry.

• AMFI(AlbertaManufacturingandFabricationInnovation):Establishedin2011,AMFIisaprofessionaldevelopmentprogramdesignedtoenhancetheunderstandingofmodernfabricationandmanufacturingtechnologiesthroughhands-ondemonstrationsandeducationalworkshops. In2016-2017,AMFIwilloperateasafullyfunctionaltechnologytransferprogramdesignedtode-riskandscreenadvancedtechnologiesforlocalmanufacturers,fabricators,coatingsapplicators,servicecompanies,andtheirsupplychainpartners.AMFIwillevaluateandfacilitateadoptionofnewandexistingtechnologiesintotheAlbertaEnergySectorsupplychain.TheprogramisfundedbyapartnershipbetweenAITF,theGovernmentofAlberta,andthefederalgovernmentandworksinconjunctionwiththeUniversityofAlbertaandindustry.Todate,AMFIhasexposedmorethan250companiestoadvancedmanufacturingtechnologiesfromacrosstheworld.

JointIndustryPrograms(JIPs)AITFhaspartneredwithseveralindustryparticipantstodevelopandtesttechnologiesrelatingtotheiroperations.Thesejointindustryprograms(JIPs)actasanalternativetoindustryconsortiumprogramsforparticipantswhoprefersmallgroupconsultationto helppreservetheircompetitiveadvantage.Some oftheseJIPshavebeenoperatingforseveralyears. BelowisalistofsomeofAITF’scurrentJIPs:• PipelineIntegrityandCorrosionMonitoringProgram

(PICoM):Inpartnershipwithseveralpipelineindustryparticipants,AITFisundertakinganevaluationofpipelinecleaningequipment,aswellasdevelopingrecommendedpracticesforpipelinesludgesamplingandtransport;

• MicrobialEOR(EnhancedOilRecovery):Inpartnershipwithenergyindustryparticipants,AITFisassessing theapplicabilityofthistechnologytoAlbertareservoirs;and

• SteamAdditivesTesting:Inpartnershipwithenergyindustryparticipants,AITFisundertakingseveralresearchprojectstovalidatetheuseofchemicalscombinedwithsteamforimprovedrecoveryofheavyoilandbitumen.


14 National&InternationalCollaborationProvincialandFederalGovernmentCollaborationThereisuniqueopportunitytoincreasecollaborationbetweenfederalandprovincialpartners.Provincially,thesepartnersincludeoursisterAlbertaInnovatesCorporationsandothergovernmentagencies.AnumberoffederalfundingorganizationsalsooperateinacomplementaryspacetoAITF,includingtheIndustrialResearchAssistanceProgram(IRAP),NationalResourceCouncilCanada(NRC),theBusinessDevelopmentBankofCanada(BDC),andSustainableDevelopmentTechnologyCanada(SDTC).

Goingforwardweintendtofocusonincreasingopportunitiesforcollaborationtomorefullydeveloptheserelationships.Recognizingthepotentialbenefitsthatcouldresultfromincreasingthefrequencyanddepthofthesepartnerships–fromsharingofinformationanddirectiontoexploringadditionalco-fundingopportunities–AITFwilladdmorefocusonbuildingthiscapacityoverthecomingyearstoenhancethelikelihoodandimpactofpositiveoutcomesforourstrategicinvestments.

Withinanycollaboration,AITFiscommittedtomaintainingitsinvestmentphilosophy.Thisincludesdeterminingwhetheranopportunityis“investmentgrade”basedonanumberoffactors,includingwhetheritfallswithinAITF’sscopeofstrategicfocus,areasofexpertiseandsupportstheProvince’s2030InnovationTargets.Oncethisdeterminationismade,AITFthenconsidersleverageandexaminesallpossiblefundingstructures,includingcollaborationwithourmanyinnovationsystempartners.

International CollaborationItiswell-recognizedthatAlberta,aswellasCanadaasawhole,isasmallmarket.Thisemphasizestheimportanceofhavingstrong,stableconnectionsanddemandininternationalmarketsforournaturalresourcesaswellasourknowledge-basedproductsandservices.Relianceoninternationaldemandalsoincreaseseconomicriskforlocalenterprises,asglobaleconomictrendscanhaveasignificantimpactonthewell-beingoflocalindustries.Thishasrecentlybeendemonstratedbothintheforestryandtheoilandgassectorasdecreaseddemandand/orincreasedsupplyhasdecimatedpricesanddrivenproducerstoreduceoperationsresultinginlostjobsforAlbertansand anoveralldecreaseineconomiccontributionto theProvince.

WhiletheFibre/Bio-Industrialsectorhasbeguntorecover,theoilandgassectorcontinuestostruggle withlowdemandandanover-abundanceofsupply. Onthepositiveside,recentsuccessesdemonstrate thehugeopportunitiesavailabletolocalfirmswhentheyareabletonetworkwithinternationalknowledgehubswithouthavingtorelocatetheiroperations.Opportunitiesarealsoavailablefororganizationsthatlookbeyondrawgoodstodevelopvalue-addedproductsthataremoreresilienttomarketfluctuations.


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Technologists in AITF’s Edmonton facility use an X-Ray diffractometer to provide characterization of powdered samples. Non-destructive analytical methods are used to identify and semi-quantitatively determine crystalline phases in unknown samples.


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Ralph Lange, Program Leader in Ecosystems & Plant Sciences, performing diagnostic testing for Canola plants and seeds in Vegreville facility.


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the following sections of the business plan outline

aitf’s contributions to innovation in the province

through its key operational areas. the corporation

facilitates basic research, applied research,

and commercialization for sectors identified as key

priority focus areas by the government of alberta.

Sectors

Campus alberta/ basic research

applied research

Commercialization

sector strategies define what we do

skills, competencies and capabilities available across the organization where and as they are needed

AITFacceleratesthe creationofvalueforAlbertansby

bridgingthegapbetweenideaandimpact

energy environMenT foodagriCulTure HealTH eMerging

TeCHnologiesfibre

bio-indusTrial


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Hooman Hosseinkhannazer, engineer with Norcada Inc., holds a custom-fabricated membrane device in the nanoFAB research facility at the University of Alberta


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backgrounda key element of the innovation curve is basic,

or pure research, which is typically focused

on theoretical hypotheses. the traditional

conception of basic research is the pursuit

of new knowledge and discovery unfettered

by the demands of its future application to

the needs of commerce or society.

however, there is increasing acknowledgement

on the part of policy makers and academia

of the benefits that can be achieved by

investing in basic research with strategic

consideration, at the outset of projects,

of the way in which the knowledge could be

used. it is the role of aitf’s campus alberta/

basic research team to weigh investment

decisions from the perspective of both scientific

promise and the social and economic benefits

that will be derived from research initiatives.

CAMPUSALBERTA/BASICRESEARCH


20 ValueCreationthroughScienceandTechnologyProjectsBasicResearch’sprimaryendclientsareAlberta’spriorityindustrysectors.Valueisgeneratedwhen AITFsuccessfullyconnectsthestrategicintentto solvesectorderivedchallenges,withthecapacity togeneratetechnologybasedsolutionsfoundwithinCampusAlberta,andmanagesactivitiestowardoutcomesthatbenefitAlberta.Thetoolsatour disposalincludefundingforChairsandResearchCentresthatarealignedtoindustrialneedsand platformstrategies.

ReflectiveoftheneedtoimprovesuccessfuloutcomedriveninvestmentsinCampusAlberta,AITFwillundertakeassessment,redefinitionandcontinuousimprovementofmanycurrentprocessesintheupcomingyear.Themajorityofthesewillbedirectedtobetterincorporateconsiderationofsectordefinedactionablechallengesorproblems,andredefinesomeinvestmentstobetterreflectaproject-basedapproachtoresearchmanagement.Improvingactiveaccountmanagementwithregardtoinvestmentswillensure thatallprojectsreceiveboththebenefitofcleardirectionandaccesstoanalignedinnovationsystemwhereadditionalservices,expertise,andinfrastructurereside.

ValueCreationthroughHumanResourcesThesecondprimarychannelforvaluecreationissupportfortraininganddevelopmentofHQ/SPandtomaximizeplacementandretentioninAlberta,therebyincreasingtheknowledge-basedworkforceandcapacitytosolveeconomicandsocietalproblemsfacingthesectors. ThisisimportanttoAlberta’sinnovationsystem,asthesearetheresearchersandtechnologyspecialiststhatdriveinnovationforindustry.BasicResearchutilizesavarietyoftoolstoachievethisoutcome,includingsupportforgraduatestudentswithscholarships,fundingforpost-doctoralfellowships,andsupportingAlberta’syouthineducationandexperienceinscienceandtechnologyentrepreneurshipthroughtheYouthTechnopreneurshipProgram.

Inparticular,linkingthedevelopmentofHQ/SPandotherAITF-supportedresearchprojectswillbecomeahigherpriority.Intermsofyouthprograms,thereisanopportunitytogreatlyimproveuponexistingprocessesbyprovidingnotonlyfundingtoyoungpeoplewantingtostartabusinessbutalsosupporteducationalexperiences,mentorship,scholarshipsandaccesstootherAITFservicesthatwillgreatlyimprovethelikelihoodofachievingsuccess,intermsofbotheducationalandentrepreneurialoutcomes.

ValueCreationthroughPlatformTechnologiesBasicResearchgeneratesvaluethroughitsmanagementoftheplatformtechnologieswithinAITFandincollaborationwithitsdirectandindirectstrategicpartners.ThethreeplatformtechnologyareasareInformationandCommunicationsTechnologies(ICT),Nanotechnology,and‘Omics’(anencompassingtermcontainingmanylifesciences).Technologiesbasedontheseplatformshavetheabilitytocutacrossmultipleindustrialsectorsandhavethepotentialtoprovideasinglesolutiontomultiplechallenges.Intermsofplatforminvestment,AITFhassupportedChairs,researchCentres,andhighlyskilledresearchersacrossallthree,butonlyinnanotechnologyaretheresupportsfordedicatedplatformprojectsandfacilities.Currently,thesefacilitiesoperateindependently.Thispresentsaconsiderableopportunityforoptimizationbyseekingalignmentandsynergies.

Intheupcomingyear,anareaoffocuswillbeto ensurethatthenewstrategiesandactionplanseffectivelyfocusonthoseareaswhereplatformtechnologyinvestmentswillleadtothebestpossibleoutcomesforAlberta.Thisincludesidentifyingways inwhichresearchprojects,skilledpeopleandfacilitiesintheseareascanaddressthe2030InnovationTargets,andgeneratethenextgenerationoftechnologicalsolutions.


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Senior Research Technologist Dean Rolheiser monitors the drying process for CNC (Cellulose Nano-Crystals) in AITF Mill Woods CNC pilot plant, Edmonton, Alberta


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accelerating

technology adoption

Senior Research Technologist Marshall McKenzie, Ecosystem and Plant Sciences, selects seeds for a germination trial at the AITF Greenhouse in Vegreville, Alberta


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APPLIEDRESEARCH

backgroundaitf’s applied research stream is a unique

hub of innovation amongst canadian

provinces. both large and small industry

clients are able to access more than

450 researchers, technicians and support

staff, over one million square feet of

research space and capital infrastructure

focused on the needs of alberta’s primary

industry sectors. aitf’s focus is to leverage

this specialized expertise, facilities and

equipment to de-risk research and

development for industry and generate

the maximum benefit for alberta.


24 CollaborationTheintersectionbetweenprivateandpublicpartnership,highlyqualifiedpersonnelanditsdirectapplicationonthecurrentneedsofindustrysupportsisavitalcomponentforinnovation.AppliedResearchdirectlysupportsAlberta-basedcompaniesintheireffortstode-riskandacceleratetheadoptionoftechnologiesintheirbusinesses.Thiscollaborativepartnershipincreasesproductivity,competitivenessandeconomicvaluefortheprovince.Withmorethan600clients,AITFhasestablisheddeepindustryconnectionsacrossitskeysectorstoprovideabridgebetweenindustryandgovernmentpartners.TheserelationshipsenableourstafftofacilitateconnectionsamongSMEs,multi-nationalenterprises(MNEs),largeCanadianresourcecompanies,industrygroupsandconsortiums,andothergovernmentorganizations.Forexample,AITF’sconsortiumslinkindustryplayerstocollectivelyresolvetheircommonissues,andattractsgovernmentandprivateinvestmentforscale-upofhigh-potentialinnovations.Thesecollaborativeendeavorsarediscussedmorefullyintheprevioussectionofthisbusinessplan.

De-riskingandAccelerationAITF’sAppliedResearchcapacitysupportsaccelerateddevelopmentandadoptionofinnovativetechnologyintoourprimarysectors,whichresultsinimprovedcompetitiveness,efficiency,andenvironmentalperformance.TheseoperationsarealignedwiththegovernmentprioritiesidentifiedthroughtheCollaboratoryprocess,andAITFhasakeyroletoplayinestablishingprogramsthatsupporttheseprioritiesandtargets.

Theseactivitiesareofparticularimportancetoearly-stagesmallenterprisesthatreceivelittletonoadditionalsupportfromindustryorgovernment.AITFhelpstheseorganizationsdeveloptheirideaswhilealsoexposingtheirleadersandconceptstopotentialpartners.WithAITFandindustrybacking,theseSMEshaveanincreasedprobabilityofdevelopingtheirproductstothepilotordemonstrationstage,atwhichpointadditionalinvestmentismorelikely.Whilenotallinvestmentsresultinsuccess,AITFhasawell-definedprocessforevaluatingandfundingideasandprojects,andhaswitnessedthissuccessfulprogressiononanumberofoccasions.

IncreasedInvestment&LeverageOpportunitiesarepresentforpartnershipfunding andcommitmentthroughtheclustereffectofalargerecosystemwhichincludestheprivateandboththeprovincialandfederalpublicsector.

ApproximatelytwothirdsofthefundingforAppliedResearchoperationsisprovidedbyindustryforJIPprogramsaswellasindividualprojects.ThebalanceofprovincialfundingisdirectedtowardstrategicallyimportantsectoralinitiativesincludingmanyJIPs.

UniquePerspectiveAITFactsasanobjectiveparticipantinAlberta’sinnovationsectorasneitheragovernmentnorindustryrepresentative.ThismeansthattheProvincehasauniquebenefitofanexternalviewpointonsensitivematterssuchaspolicyandregulation,completewithobjectiveandlocalscientificexpertisetoevaluateandvalidatedecisions.ThisresultsinacompetitiveadvantageforAlbertaintheformofbalancedgovernancetomaximizebenefitforall.

GoingforwardAITFisworkingtobetterbridgethegapbetweenideas,applicationandcommercializationbyleveragingitsAppliedResearchoperationswithfundingprogramswithCampusAlbertapartnersandSMEs.


25

Our corrosion engineering program assesses materials performance in corrosive environments and evaluates integrity management solutions for the energy industry. Here, an engineer is conducting a specialized sour service test using electrochemical analysis.


26

accelerating

outcomes for smes

A water sample is tested using the Wilson Analytical Hardened Fluorescent Spectrometer at Caradan Chemicals, Nisku, Alberta.


27

backgroundalberta is known for its high entrepreneurial

ambition, which is supported by an a+ rating

from the conference board of canada. the

province has internationally competitive

universities, engineering schools, hospitals,

and technical institutes, and is known for

producing world class scientific research.

commercialization brings innovation to

the market and aitf seeks to increase

commercialization benefits – jobs and

revenue for smes – for alberta via its

industry support programs, mentorship

capacity and regional innovation network.

over the last two years, by leveraging

best practices from other jurisdictions,

which combined with a wealth of industry

relevant experience, aitf and edt have

revamped the programs focused on

technology commercialization.

COMMERCIALIZATION


28 TechnologyCommercializationPlanThisjointinitiativebetweenEDTandAITFisexploringwaystoalignandintegratekeyorganizationsandsupportserviceswithinthetechnologycommercializationsysteminAlberta.ThegoalsofthesestrategicpartnershipsaretoincreasethesuccessratesofSMEs,supportemploymentgrowthintechnologysectors,createnewrevenuestreams,andultimatelydiversifytheeconomy.

Initscapacityasanintegratorandfacilitator,AITF’scollaborativepartnersincludeEDT,theInnovationCollaboratories,theRegionalInnovationNetworks(RINs),RegionalEconomicDevelopmentAlliances(REDAs),CampusAlbertainstitutions,andothertechnologycommercializationsystemplayersandstakeholders. Bycoordinatingtheactivitiesofthesediverseorganizations,AITFishelpingtodevelopastrongertechnologycommercializationsysteminAlbertathat isoutcome-oriented,efficient,andhighlyaccessible.

InrecognitionofthecriticalimportanceofthetechnologycommercializationfunctiontogrowingAlbertajobsandgloballycompetitivecommerce, AITFhaspartneredwithEDTtostrategicallyinvest inhighdemandindustrysupportprogramsandas aresultofthisincreasedfocus,fundingforthese activitiesincreasedby$5.0millionperyear, onanongoingbasisfromJanuary2016.

Thefollowingareasrepresentsignificantgapsinthetechnologycommercializationandthescale-upstagesoftheinnovationcurveinAlberta.ThesehavebeenidentifiedaskeyissuesbyAITFandasaresult,theCorporation hastakenanactivepositioninaddressingthem.

MentorshipandguidanceAITF’sCommercializationAssociatesProgramsupportsSMEstohirethemanagementandmarketingskill-setsrequiredtoaddresscommercializationchallengesandrealizeopportunitiesnecessarytoimplementtechnologyandtransformideasandinventionsintogoodsandservices.Buildingonfeedbackfrompreviousparticipantsoftheprogram,AITFhasimplementedsignificantchangestoincreaseflexibilityandbetteralignskills andexperiencewithwhatindividualSMEsrequire.

Recognizingtheimportanceofstrategicmentorshipandguidanceincreatingsuccessful,sustainablebusinessesoutofinnovationsintechnologyorservices,AITFhasbeguntoplacemoreandmoreemphasisontheroleplayedbyourTechnologyDevelopmentAdvisors.TDA’sactaspro-activeconnectorsandnavigatorsforSMEstoaccessAlberta’sInnovationSystemprogramsandservices,RegionalInnovationNetworks(RINs),Non-GovernmentOrganizationsandGovernmentresources.

TheCorporationisexcitedtostrengthenourcapacitytoleadwithone-on-onementorshipsupportversusprogramfunding.ThisbusinessplaninvestsintheadditionofsevenadditionalTDA’sacrosstheprovince,withfourofthesepositionsstartinginthefirstquarterofthefiscalyear.

AccesstoVentureCapitalAccesstolatestagefundingfromprivatesectorstrategicandfinancialinvestorsisessentialtoenablecompaniestofirstcommercializeandthensuccessfullyscale-upwithintheProvince.

Unfortunately,Albertacurrentlyscoresa“D”gradefromtheConferenceBoardofCanadaintheareaofventurecapital(VC)investment.ThishastheeffectofnotonlyreducingfinancialinvestmentinAlbertaSMEsbutalsolimitsaccesstothequalitativebenefitsthatoftenaccompanyVCfinancing,includingmanagerialexpertise,entrepreneurialexperience,industryknowledge,andnetworksofcustomers,suppliers, andotherfunders.

EDThasworkedheavilyinthisareatoattractventurecapitalfirmstoAlberta.AITFisworkingintandemwiththeMinistry’sactivities,andotherpartnerssuchasAlbertaEnterpriseCorporationandtheBusinessDevelopmentBankofCanadatoaddressthisgap.Inaddition,AITFprovidesdirectmentorshipandcapitalaccessexpertisetolatestageSMEs.Thedrivingpurposeoftheseprogramsistohelphigh-growthpotentialAlbertaSMEstransitionintoattractiveinvestmentsforlatestagecapitalinvestors,includingstrategicinvestorsandcommercialbanks,whichisnecessaryforscale-up.

ContinuousimprovementAITFreviewsandrefinesprogramsonarecurringbasistoensuretheycontinuetomeettheneedsofAlbertaSMEs.Overrecentyears,AITFhasfocusedonincreasingtheflexibilityofourindustrysupportprogramswhileatthesametimeenhancingourduediligenceprocessforevaluatinginvestmentdecisions.ThesechangeswereundertakenfollowingsignificantconsultationwithSMEsandentrepreneurs.Intheupcomingbusinessyear,AITFwillcontinuetoactivelyimproveandtweakprogramswhennecessary.

InsupportofcontinuousimprovementandevolutiontomeettheneedsofAlberta’sinnovationsystem,AITFwillmaintainitsannualpracticeofconductingcustomersurveys.Basedonin-depthfeedbackfrompastclients,asobtainedthroughthesesurveys,majorchangesarealreadyunderwayfortheR&DAssociatesprograminthefallof2016.Lookingahead,wewillcontinuetousethisinformationtomakerelevantandtimelychangestoourservicesforindustry,CampusAlberta,government,andSMEs.


29GlobalPartnershipProgramAlberta’sgoalsforinnovationareconsistentwithnationalandinternationalobjectives:tobuildgloballycompetitiveenterprises,resultinginjobcreationeconomicgrowth,andahigherqualityoflivingforall.Toachievethis,Alberta’sinnovationsystemmustbuildmulti-lateralrelationshipstoenhanceourglobaleconomicconnectivityandenableAlbertaSMEstoleveragebothR&Dandinvestmentfromotherjurisdictions.

IncollaborationwithEDT,AITFleveragesnational andinternationalrelationshipstodevelopkey targetedbusiness-to-businessandresearchtocommercializationopportunitieswithpriorityregionsaroundtheglobe.InCanada,AITFhasastrongrelationshipwithOntariowhereweleveragethe OntarioCentresofExcellencetodeliveronmutuallybeneficialprojectsforAlbertaandOntario.Newin2016,AITFmanageskeypriorityrelationshipswith theStateofJaliscoinMexicoandtheProvinceofZhejianginChina.Theseprogramsaredesignedforbusiness-to-businessmatchingforproductdevelopment,commercializationoftechnology, jointventuresandtheabilitytolaunchnew productsintoeachother’smarkets.

LinkingSMEsintothesupplychainBuildingalocalizedsupplychainforAlberta’smajorindustriesisimperativetounleashingthepotential ofAlbertaentrepreneurstoservicelargercompanies.Thisexpansionofmarketopportunitiesforlocalorganizationsishavingasignificantpositiveimpact ontheeconomicprosperityoftheProvince.

AITFsupportsthisobjectiveatanumberofstagesintheinnovationcurve.AttheAppliedResearchstage,weprovidefacilitieswhereSMEsandlargeindustryplayerscantesttheirtechnologyandprocessinnovations.Atthecommercializationstage,AITF helpstolinkSMEswiththeirfirstcustomerthrough theProductDemonstrationProgram(PDP)aswellasthepilotAlbertaSmallBusinessInnovationandResearchInitiative(ASBIRI).TheseprogramsandinitiativeshelppositionAlbertaSMEstobesuccessfulvendorsforlargercompanies.


30

food-agriculturefibre/bio-industrial

energyenvironment

healthemerging technologies

Chemical Technologist Brittany Orfino prepares canisters for testing Volatile Organic Compounds (VOCs) in the Analysis and Testing Services lab at the AITF Vegreville, Alberta Research facility.


31

sectorsthe following section provides a current state outlook on the province’s key industry sectors, including both challenges and opportunities, and the draft 2030 innovation targets which provide clarity of purpose for the innovation ecosystem. a listing of key partners the corporation works with, and its specific contributions within each sector are also outlined.

SEctor officESAITF’sSectorOfficesinFood-Agriculture,Fibre/Bio-Industrial,Energy,Environment,HealthandEmergingTechnologies–actsasfacilitatorsbetweenindustry,governments,agencies,Collaboratories,andotherpartners.ThepurposeoftheSectorOfficesistodirectactivitiesthatleadtoachievingthe2030InnovationTargetssetbytheProvince’sInnovationCollaboratories.Thisentailsadeepunderstandingoflocalaswellas globalandmacro-economicfactorsimpactingAlberta’s industries.TheSectorOfficesleveragethisunderstandingwhenworkingcollaborativelywithinternalandexternalpartnerstoalignfundingandexecution.

Bydefiningstrategiesthatwillleadtotheachievementofinnovationgoals,theSectorOfficesareabletofocustheirinvestmentsinprogramsandprojectswithahighlikelihoodofachievingappreciableprogresstowardstheprovincialtargets.TheseinvestmentscomprisetheportfolioofeachSectorOffice.Atthistime,AITF’ssectorofficesarenewandstaffedwithasmallgroupofhighlyexperiencedindividualswhorelyheavilyonthedeliveryareasofAITF(CampusAlberta/BasicResearch,AppliedResearch,andCommercialization).TheSectorOfficeshaveaparticularlystrongrelianceonAppliedResearchashistoricallymanyoftheprogramsdirectlylinkedtoindustrysectorsweremanagedbythisteam.

Overthecomingyears,commercializationisanincreasingfocusareafortheSectorOffices,andtheywillplayakeyroleinconnectingSMEswith:MNEstostrengthenthesupplychain,mentorstosupportoperationalandstrategicplanning,andinvestorstosupportproductdevelopmentandscaleup.The SectorOfficeswillbringSMEsintotheApplied Researchfacilitiestofurtherexploreanddeveloptheirinnovativetechnologies.Atthesametime,buildingtangiblelinkageswithCampusAlbertaiscritical,and willbeachievedbyencouragingtalentedresearchersandtechniciansfromAITFtoworkmoredirectlywith post-doctoralstudentsandexperiencedresearcherswithinCampusAlberta.


32

FOOD-AGRICULTURE SECTORSectorOutlookAlberta’sdiverselandscapesupportsavarietyofagriculturalproductsandservices.AccordingtoStatisticsCanadadata,Albertacontributedalmost20%($8.8billion) ofCanadianFood-Agricultureexportsof$46.0billionin2013.Canola,wheatandbarleymakeuptheprovince’sthreelargestrevenue-generatingcropswhilecattle(beefanddairy),hogsandpoultryrepresentthelargestlivestockmarkets.AccordingtostatisticsfromtheAlbertaMinistryofAgricultureandForestry,thisrepresentsapproximately50millionacresoffarmlandand$12.3billionintotalfarmcashreceipts,whichwassplitevenlybetweencropandlivestockproduction.

Anumberofchallengesfacethefood-agricultureindustry,andsocietyasawhole,asthesectorworkstosustainablyincreaseproductivityandcompetitivenesswhilecontinuingtomeetthepublic’sexpectationsforfoodsafetyandsecurity.WesternCanada,withAlbertabeingakeyfood-agriculturecomponent,isprojectedtobeoneoffourto sixsurplusfoodsupplyregionsfortheestimatedworldpopulationof9.5billion,anincreaseof2.3billion,by2050. Thisisatremendousopportunityfortheprovinceaswelooktogrowanddiversifyoureconomy.

Tocapturetheseopportunities,continuousimprovementsinenvironmentallyfriendlyproduction,foodprocessingtechnologiesandproductqualitybyAlberta’scrop,livestockandvalue-addedindustriesareessential.Tobesuccessful,Albertamustremaincommittedtothedevelopmentofalong-termsustainablefood-agricultureindustry whichreturnsdividendsintheformofimprovedqualityoflifeinourruralcommunitiesandadiversifiedandresilientprovincialeconomy.AITFwillcontinuedevelopingprogramsandtechnologiesthatwillassistAlberta’sfoodandagriculturalindustrytoservelocalandglobalmarketsandbuildonCanada’snumberoneglobalratinginfoodsafety.

Bothindustryandtheresearchcommunityarerequiredtoseizeandleveragechangingglobalconsumerpreferencesforhighervalueconsumergoods,includinghealthconsciousoptionssuchasorganic,non-geneticallymodified, andgluten-freefoods.Othernoteworthytrendsarethepopularityofethnicfoodsanddemandforinstantaccess toproductioninformationbyconsumersandindustry.Changestothetradelandscapewithagreementssuchas theTrans-PacificPartnershipwillcreateopportunitiesthatanimbleandresponsiveAlbertaFood-Agriculturesectorcanrealize.


33

KeySectorStatistics

Draft2030InnovationTargets

aitf’S contributionaitf’s efforts contribute to those of the ministry of agriculture and forestry, which shares common goals with aitf’s food-agriculture sector. aitf’s sector offices and applied research programs are focused on near term outcomes in the following areas:

• Utilizationofthelatesttoolstodevelopcerealandoilseedcropvarietiesthataremoreresilienttoenvironmentalstress;evolvingplantdiseasechallengesandconsumerqualitydemands;

• Exploringapartnershipopportunitywith the ministry of agriculture and forestry topositionAITF’sVegrevillelocationas aProvincialCropCentreofExcellence;

• Investmentincropandindustrydiversificationresearchforindustrialhempandflaxfibreutilizationinvalue-addedtextilesandbiocompositematerials;

• Facilitationofindustry,CampusAlbertainstitutionsandgovernmentpartners to address the number one challenge of food-agriculture industry, i.e., food safety, securityandquality;

• Facilitatingtheextensionandacceptanceof the newest leading edge science for livestockwithaparticularemphasison thebeefindustry;and

• FocusondevelopingsupplychainopportunitiesforSMEstoservicethefood-agriculture industry, and become successfulenterprisesintheglobalizedlocalmarketplace.

Partners*ALBERTA’SAGRICULTUREANDFOODINDUSTRYASSOCIATIONSANDCOMMISSIONSCANOLACOUNCILOFCANADA/FOODPROCESSORSANDMARKETERSLIVESTOCKGENTEC/MINISTRYOFAGRICULTUREANDFORESTRY/PRIVATEINDUSTRY

*PartialListofAITF’sPartnersinthissector

sales from ingredient, food, and beverageproductmanufacturingincreases

from $13.7 billion (2014) to $25 billion

$6.3 billion

Increasecropandlivestockquality andproductivityby30%from2013levels,

while responsibly managing natural resources

50 million acres

ensure that agricultural, food, and beverageproductionmeetsorexceeds publicexpectationsandvaluesby10%

based on 2016 measures

86,000

42,234

increase Sales

2014 contribution to alberta’s Economy (real GDP)

Drive investment

2014 total farm Land

reduce Waste

2014 number of albertans Directly Employed in the Sector

number of census farms in 2011


34

FIBRE/BIO-INDUSTRIAL SECTORSectorOutlookCanada’sforestindustryhasfaced–andovercome–someofthemostchallengingmarketandeconomicconditionsinitshistory.TheFibre/Bio-IndustrialsectorisunderpressureascommodityproductsareincreasinglysubjecttotheglobalcommoditydownturnwhichcansignificantlyimpactcapacityandemploymentinAlberta.Inrecentyears,Albertahasbeencompetingagainstproducersthatareeithercloser tothemarketorabletogrowfibremorequickly.ThemassivecontractionintheUShousingmarket(thelargestexportdestinationforAlbertalumberandpanels)inthepreviousdecaderesultedinmillclosuresandslowdownsacrossCanada,andwhilethemarketisrecovering,totalexportshaveyettoreturntopre-2007levels.

However,therecentdeclineintheexchangeratebetweentheCanadianandUSdollarshasbeenpositiveforthesector,duetothefactthatmostcommodityproductsaretradedinUSdollars.Facedwiththesefluctuations,forestproductcompaniesrecognizethattomaintaintheirlong-termviabilityandremaingloballycompetitivetheyneedtobuildontheirexistingstrengthsasproducersoftraditionalforestproductsandpractitionersofsustainableforestmanagementpracticeswhilealsofindingnewandvalue-addedproducts.

Innovativestrategiesareneededtoenhanceproductivityandefficientvaluerecovery,todiversifyandaddvaluetoproductstocompensateforcomparativelyhighlabourandlogisticscosts,andprovideincomestabilitywhilemanagingtheenvironmentforfuturegenerations.Theforestsectorhasbeenrecognizedasafoundationfortheemergingbio-industrialsectorduetoitsabilitytoefficientlymanageanddeliverfibre.Thereare,however,stillmanyprocessdevelopment,economic,andproductoptimizationissuesthatmustbeaddressedbeforethisemergingsectorcancometofruition.Asaresult,theindustryisseekingspecializedfacilitiesandexpertisewithinthepublicinfrastructuretohelpdesign,developanddemonstratenewbio-refiningprocessesandproductsaswellasproducehighlyskilledscientists,engineersandtechnologistsforbio-basedprocessing.ThecreationofthesefacilitiesandtechnicalservicesisvitaltotheestablishmentofthisnewindustrialsectorinAlberta.

Whiletheforestindustryhashistoricallyandcontinuestoinvestsignificantcapitalinfacilitiestoimproveproductionefficiencyandsafety,operatingalongsideAlberta’soilandgassectorhasmeantthatthissectorhasnotbeenaprimaryfocusforgovernmentandprivatesectorinvestment.Giventhattheforestindustryisavitaleconomicdriverformore than50Albertacommunities,manyofwhicharehighlydependentontheindustryforemployment,sustainingthissectoriscriticalforensuringthehealthandvibrancyofAlberta’sruralheartland.Withtherenewedemphasisondiversificationintheprovince,AITFplanstoaddadditionalcapacitytomeettheneedsofthesectorintheupcomingyear.


35

KeySectorStatistics


aitf’S contributionAITF’seffortsarecenteredondeveloping,demonstratingandhelpingde-risk,atthelab and pilot scale, the commercial applicability of leading-edge,economicallyviabletechnologies in the forest sector. within this area, we are focused on pulp and paper and the by-products of the pulping process as well as engineered wood products.AITFworksdirectlywithcompaniesandotherresearcherstoimprovecompetitivenessbyidentifyingopportunitiestodiversifyproductionintohighermarginproductsandexpandingmarketreachinto new segments and new geographic regions through the following:

• Strengthenindustrialpartnershipswithforestproductcompaniesanduptakeindustriestoaddress real world opportunities and challenges withcommercialimplications;

• EstablishtheAlbertaForestProductsInnovationConsortiumtoinformandcoordinateactivitiesrelatedtoforestproducts;

• Deepenrelationshipswithnationalpartners,includingFPInnovations,NaturalResourcescanada, the national research council, and WesternEconomicDiversificationtoleverageresourcesinsupportofactivitiesofmutualinterestandbenefit;

• Developstrategicrelationshipswithprovincialpartners, including the alberta forest products Association(AFPA),ForestResourceImprovementassociation of alberta (friaa), foothills model Forest,toaddressAlberta-centricenvironmentalchallengeswithbio-industrialsolutions;

• CommercializeproductsusingCellulose Nano-Crystals(CNC),anddiscovernewuses forligninandbiocharapplications;and

• ExpanddemandforAITFlicensedengineeredwood products and oriented strand board, particularlyinChinaastheyhavebannedalltreeharvestingintheirCountryandAlberta’sIndustryisinacomparativelyadvantageouspositiontoservicethissignificantlyincreasedglobalmarket.

Partners*

ALBERTAINNOVATES–BIOSOLUTIONS/ALBERTAAGRICULTUREANDFORESTRYALBERTAECONOMICDEVELOPMENT&TRADE/PRIVATEINDUSTRYNATURALRESOURCESCANADA,INCLUDINGCANMETENERGYCAMPUSALBERTA,INCLUDINGUNIVERSITYOFALBERTA,UNIVERSITYOFCALGARYANDNAITFPINNOVATIONS


Biodiversityismaintained orenhancedatlevelsrelative

to reference conditions

50 sawmills 6 pulp mills

7 engineered wood product mills

1 newsprint mill

$4.5 billion

reduce landscape disturbance intensity by20%andacceleratereclamationof disturbedlandstopromotenativehabitat

andspeciesrecovery

50

alberta has safe, secure, and reliable water resources, while enhancing the health oftheaquaticecosystemsandimproving overallwateruseefficiencyby30%(2010)

13,000

conserving biodiversity

annual contribution to alberta’s Economy

restoring alberta’s Landscapes

number of communities focused on the Sector

Sustainable Water management

2014 number of albertans Employed in the Sector

number of facilities/operation


36

ENERGYSECTORSectorOutlookAlbertahasadiverseenergyportfolio,whichincludesnaturalgas,conventionaloil,coal,minerals,andtheoilsands.LocatedmainlyintheAthabascaandColdLakeareas,Alberta’soilsandsarethethird-largestprovencrudeoilreserveintheworldafterSaudiArabiaandVenezuela.Thesectorprovidesopportunitiesforcompaniesinvolvedinthesupportofextractionandprocessingenergyresourcesaswellascriticalsupplychainservicecompanies.Alberta’senergyexportsgeneratebillions ofdollarsinrevenueseveryyearandarecriticaltotheprovince’seconomy.

TherearethreemajorchallengesfacingAlberta’senergysector:globalcompetition,location,andenvironmentalstewardship.

First,Alberta’senergymarketisimpactedbytheglobalmarkets,inparticularthelowcomparativecostoffracturingintheUSandthelowcostofMiddleEastoilproducers.Toremainviabletheindustrymustidentifyefficienciesanddrasticallyreduceinputcosts.Onasimilarfront,Alberta’snaturalgasindustryisexploringwaystoimprovewell-economicsbyreducingthecostofexplorationandincreasingwellproductivitythroughtechnologyandprocessimprovements.Asawhole,technologydevelopmentandadoptionaswellasprocessimprovementsarekeycomponentstoincreasingthecompetitivenessofAlberta’soilandgasindustry.Theurgencyofmaintainingglobalcompetitivenesshasonlyincreasedasthepriceofoilcontinuestofallfrommorethan$100perbarrelin2014toapproximately$50perbarrelin2015andtoaslowas$30perbarrelin2016.

ThesecondmajorchallengeisthatAlberta’sresources,includingtheenergysector,arelandlocked.TransportationcostssignificantlylimitmarketaccessanddecreasemarginsforAlbertaproducers,anissuenotfacedbyotheroilsupplierswithgreateraccesstopipelineandportinfrastructure.

Thethirdchallengeidentifiedfortheenergysectoristheglobalenergytransformationtowardsalowercarbonfutureandthedrivetowardsgreenhousegasreduction.Severaltechnicalchallengesmustbeovercomefortheenergyindustrytoremaincompetitivewhilebeingenvironmentallyconscious.Thequalityofair,waterandlandmustbecarefullymonitoredandmanaged,andeffortscanbeconstrainedbyinfrastructure,productioninputsincludingnaturalgas,andrecoveryandprocessingmethods,allofwhicharebeingexploredtoidentifyimplementableopportunitiesforimprovement.AITF’sEnergySectorgroupworkscloselywithourEnvironmentSectorgroup toidentifyopportunitiestoenhanceoutcomesthroughcollaboration.

Throughadvancementsintechnologyandinnovation,SME’sandlargeproducersinthesectorarepositioningthemselvestobecomevitalsuppliersoftechnologiesandservicestotheglobalmarketplace.


37

KeySectorStatistics


support alberta’s climate change goals by accelerating solutions to reduce methaneemissionsby45%by2025

and ensure a dynamic portfolio of ghg emission reduction technologies

Supportthesuccessfulcommercialization ofnewvalue-addedproductstoincreasethemarketvalueofAlberta’soilandgasexports by25%andexpandingaccesstomarket

oil sands production efficiency and economicsimprovebydecreasing:

freshwateruseby50%,GHGemissions by50%onaperbblbasis,andsupplycost ofbitumentobegloballycompetitive

Renewablesources,likewindandsolar, willcontributeupto30%ofAlberta’s

electricity generation

reduce GHG Emissions

increase value & market access

improve oil Sands Efficiency

renewable Energy

$112 billion

$91 billion

133,000

166 billion barrels

2014 Gross revenues from all Hydrocarbons

2014 Energy resource Exports

albertans Employed in the upstream Energy Sector

2014 oil Sands reserves

aitf’S contributionTheEnergySectorOfficeiscommittedtoinvestingin applied research programs which help to reach draft 2030InnovationTargetsfoundintheAlbertaResearch andInnovationFramework.OurresearchershavealonghistoryofprovidingR&Dfortheenergyindustry,andhaveadeepunderstandingofcharacteristicsofenergyreservesinAlberta.Inaddition,AITFhasthespecializedexpertise,facilitiesandequipmentforin-siturecoveryofheavyoil and bitumen and surface mining processes.

AITFiscontributingtotheresolutionofthekey issuesdiscussedintheenergysectoroutlook– globalcompetitiveness,logisticalchallenges,andenvironmentalmanagement–throughprogramsin its applied research stream.

• Programsfocusedonaddressinglogisticalchallengesinclude pipeline integrity and corrosion management (picom), a joint industry program, which facilitates collaborativeR&Dprojectstoimprovedetection,measurement and mitigation methods for corrosion in pipeline systems. aitf’s energy sector applied research stream also supports r&d around spill response for pipelines,andleveragestheinternationallyrecognizedexpertiseofitswholly-ownedsubsidiary,C-FER,tosupportinnovationinthisarea;

• TheMaterialsandReliabilityinOilSands(MARIOS)consortium.ThegoalofMARIOSistodevelopknowledgeandvalidatetechnologiestosignificantlyreducedowntimeandimproveoperationalreliability andproductivityintheoilsandsindustry.Theconsortiumlinksoilsandsproducers,materialsandequipmentsuppliers,fabricators,andtechnologyproviderstocollaborativelysolveindustry-wideproblems.SMEs aresubsidizedbyAITFtoenhanceexposureand sharingofinnovativeideasandtechnologies;

• AACI,aninsituheavyoilresearchanddevelopmentconsortiumthatpartnersindustrywithgovernmenttoadvancefieldfocusedtechnologies.Workwithinthisprograminvolvesidentifyingandevaluatingimprovementsinoperatingpracticesanddevelopingnewexploitationstrategies;

• AITFhasenteredintoamulti-yearcollaborativeagreementtoworkwiththeHeilongjiangAcademy ofSciencestocollaborativelypursueresearchanddevelopmentofnewproductsfromtheoilandbitumenresources in daqing oilfield, china’s largest oilfield.

Partners*ALBERTADEPARTMENTOFENERGY/ALBERTAINNOVATESCORPORATIONSCANADA’SOILSANDSINNOVATIONALLIANCE/ECONOMICDEVELOPMENTANDTRADECLIMATECHANGEANDEMISSIONSMANAGEMENTCORPORATION/INDUSTRYASSOCIATIONS

NATIONALRESEARCHCOUNCIL



38

ENVIRONMENTSECTORSectorOutlookInanaturalresourcedrivenprovince,managingtheenvironmentisbothachallengeandanopportunityforthepublicandprivatesector.AlthoughAlbertacontinuestobattlethe‘dirtyoil’stigma,ithasalsogarneredareputationforexcellenceinwatertreatmentandwastemanagement.Alberta’senvironmentalproductsandservicesindustryisthecorebusinessofapproximately1,300companieswithestimatedrevenuesof$2.8billionannually.Globally,annualfinancialinvestmentingreenhousegasmitigationis$360billion,withapproximatelyone-quartercomingfrompublicsectororganizations.Incomparison,in2013globalinvestmentinfossilfuelexplorationwas$674billion.Forecastssuggestthateffectiveclimatemanagementwillrequireasignificantlyhighercommitmenttomeetglobalclimatechangetargets.BudgetsforEnvironmentandClimateChangeCanadaestimateannualspendingbetween$980million and$1billionuntil2018withtheexpectationthatthiswillbeusedtoleverageprivatesectorinvestment.

Environmentalstewardshipandprotectionisagrowingglobalindustry,asevidencedbytheincreasingfrequencyofcollaborativeglobaldialogueandcommitmentsbygovernmentstoaggressivelysupportclimatechangeaction.Predictionsaroundthecosttoeffectivelyaddressglobalclimatechallengesindicatetheneedtoinvesttrillionsofdollars,notthebillionscurrentlycommitted,intoinfrastructure.Thisemphasizestheneedforgovernmentsacrosstheworldtoworkinpartnershipwitheachotheraswellaswiththeprivatesectortoleverageresourcesandaccelerateinnovation.Albertaiswellpositionedforleadershipinthiseconomy,aswehaveexperienceinthesetypesofgovernment-privateenterprisepartnerships,andsolutionsdevelopedherecanbeappliedglobally.

InNovember2015,AlbertaannouncedthecoreelementsofitsClimateLeadershipPlan,theimplementationofwhichisexpectedtostrengthenAlberta’seconomyandmakeAlbertaoneofthemostenvironmentally-responsibleenergyproducers intheworld.ThekeyelementsofAlberta’splanare:• settingaprovince-widepriceonCO2emissions;• phasingouttheuseofcoalforpowergeneration;• increasingthecontributionfromrenewablepower;• cappingCO2emissionsfromoilsandsproductionat100Megatonnesby2030;and• reducingmethaneemissionsassociatedwithoilandgasproductionby45percentby2025

Alberta’sinnovationsystemiscurrentlyworkingwithEDTandotherMinistriestorecommendanapproachforsupportingthetechnologyandinnovationcomponentofAlberta’sClimateLeadershipPlan.

TheinnovationsystemiscriticalinachievingAlberta’senvironmentalgoals,andmeetingtheClimateLeadershipPlan inparticularasitwillrequiredramaticenergyefficiencyandcarbonintensityimprovementsintheproductionofAlberta’sresources(andparticularlyourenergysector).Forexample,meetingtheoilsandsemissionscapwilldrivesignificantchangesinknowledgebaseandcurrenttechnologies,suchasdrivingimprovementsinbitumenproduction,including nextgenerationSAG-Dandsolvent-basedextractionandotheralternativesforsteamgenerationprocesses.

RevenuesgeneratedthroughAlberta’scarbontaxwillbere-investedintechnologyinnovation(aswellasotherprioritiessuchasreducingtheimpactsassociatedwiththephaseoutofcoal).TheAlbertaexpertpanelonclimatechangehasrecommendedthattheprovincetakegreaterrisksinfundingbreakthroughtechnologiesthatwouldpositiontheprovinceasagloballeader.Alberta’sClimateLeadershipPlanprovidesanopportunityforAlberta’sinnovationsystemtosignificantlyincreaseitsimpactandsupporttheProvince’scurrentsectorsaswellasemergingsectors(suchasthe“cleantech”sector).


39

aitf’S contributionWithintheenvironmentsector,AITF’scontribution is:

• Technicalexpertisetogovernmentandindustry related to the integration of air, land,waterandbiodiversityconsiderations forAlbertagovernmentpolicies,regulationsandmonitoringsystems;

• Providingadvanceddecisionsupportsystemsto integrated resource management system (IRMS)partnersforcumulativeeffectsmanagement,drawingonprovincial, nationalandinternationalexpertise;

• Buildingmarketsforecosystemservicesin targeted sectors (e.g. agriculture) and applications(biodiversity,water),helpingtodiversifytheeconomyandpositionexistingmarketsforfutureopportunities;

• Fieldtestingofnewapproachesandtechnologies for monitoring, greenhouse gas (ghg) reductions, other air, land and waterimpactsaswellasmakingeffectiveuse of indigenous wisdom and traditional ecologicalknowledge;

• Specializedanalyticalcapabilities,equipmentandinfrastructureforemergingenvironmentalissues (e.g. aquatic and terrestrial mesocosm facilities,napthenicacidsanalysis);

• Pilot-scalefacilitiesforbiogasandthermochemical processing and technology de-risking;

• LeadershipofJIPsandconsortiarelated toenvironmentalmanagementapproaches and supporting mechanisms to engage AlbertaSMEsinprovincialenvironmentalpriorities (e.g. tecterra for geomatics sector)andtolinkMNEsandSMEsaroundprovincialpriorities.

KeyProvincialSectorStatistics


Partners*ALBERTABIODIVERSITYMONITORINGINSTITUTE/ALBERTADATAPARTNERSHIPSALBERTAENVIRONMENT&PARKS/CANADA’SOILSANDSINNOVATIONALLIANCECLIMATECHANGEANDEMISSIONSMANAGEMENT/CORPORATION(CCEMC)ECONOMICDEVELOPMENT&TRADE /TECTERRAPETROLEUMTECHNOLOGYALLIANCEOFCANADA


Exportsalesfrombiomass resources in alberta increase by25%whilemaintaining environmentalsustainability

$2.8 billion

Industryoperatinginthevalue-added bioindustrial sector will attract an additional$3billionprivatesector

investmentinAlberta

84,000

50%reductioninorganicwasteto landfillthroughinnovativetechnologies whichproducevalue-addedproducts

1,330

$4.2 billion

increase Sales

annual contribution to alberta’s Economy

Drive investment

# of albertan’s Employed in the Sector (2010)*

reduce Waste

# of companies in Environmental Products/Services

2010 alberta Private Sector investment in Environmental Protection**

note: base year is 2015 unless otherwise stated.


40

HEALTHSECTORSectorOutlookToCanadians,healthcareisbothasocialbenefitandaneconomicasset. Thehealthsectordirectlyandindirectlysupportsmorethantwomillionworkers inhundredsofcommunitiesacrossthecountry,overseessophisticatedinfrastructureandprocurementofadvancedtechnology,andsupportsleading-edgeresearch withsignificantcommercialpotential.InAlberta,healthcarecostsarepredominantly drivenbytwofactors:populationgrowthandanagingpopulation.Publicandprivatepartnershipsareviewedasapotentialwaytoimprovetheeffectivenessofthehealthcaresystem. AITFviewstheengagementofindustryandtheprivatesectorascriticaltomaximizinghealthandsocio-economicbenefitsthataccruewhentechnologiesareadoptedatscale.

Currently,Alberta’shealthsystemisfocusedonacuteinterventionasopposedtopreventativemedicine.TheDraft2030InnovationTargetsareattemptingtoshiftthisfocus.Thisisanimportantstepforwardandhasthepotential todramaticallyreducecostsandimprovethehealthandwell-beingofAlbertans.

TherecognitionthatexistingandnewhealthdatacanbeusedtodriveresearchthatwillleadtoimprovedhealthoutcomeshasthepotentialtotransformthewayhealthisperceivedandhealthcareisdeliveredinAlberta.While thisshiftisstillaworkinprogress,itisanticipatedthatinvestmentindatainfrastructureanddeploymentofelectronicmedicalrecords,inconjunctionwithstatutoryorregulatoryreform,willdriveclinicaldatauses.This‘openingup’willleadtoanenvironmentwhereAlbertaSMEscancreateanalyticaltoolsandapplicationstoanalyze,presentandusethisdatatoimprovecare,healthoutcomesandmanagetheupwardtrendofhealthcarecoststoAlbertans.

Albertaisknownforexcellenceinmedicalteaching,clinicalresearchandclinicalpracticebutfindinginnovativepathwaysfornewhealthandmedicaltechnologiesthataredevelopedinAlbertastillpresentmanychallenges.However,morecanbedonetosupportandpromoteourSMEenvironmentinthissector.WorkingcollaborativelywithAlbertaHealthServices(AHS)asapartnerand/ortechnologyadopteriskeyforinnovatorsseekingprototypedemonstrationandearlyapplicationexperienceatscale.


41

aitf’S contributionAITF’sfocusisonthecommercialization ofproductsandservicesthatmeetAlberta’s healthneeds.Ouractivitiesareprimarily directed to late stage medical product development,commercializationand accesstomarkets.

• Providingknowledgeandadvisorservicesinregulatory requirements (iso 13485, iso 9001) andstage-gateprojectmanagementtoassistclientsdeveloptheirproductsandservicesthroughtocommercialmarket;

• UtilizingtheRINsandTDAstoconnect withgeographicallydistantclients;

• ActivelybuildingnetworksamongMNEs,SMEs,researchersandtheinvestmentcommunity through and with system partners includingAlbertaInnovates–HealthSolutions(aihs), bioalberta, alberta health industry association (ahia), and tec edmonton’s HealthAccelerator;

• Workingtoinfluencethedirectionof healthinnovationinAlbertathroughactiveparticipationintheHealthInnovationCollaboratory,andotherstrategicinitiativesledbygovernmentpartners.

Partners*ALBERTACENTREFORADVANCEDMNTPRODUCTS(ACAMP)ALBERTAHEALTHINDUSTRYASSOCIATION(AHIA)/ALBERTAINNOVATESHEALTHSOLUTIONSALBERTAMINISTRYOFECONOMICDEVELOPMENT&TRADE/ALBERTAMINISTRYOFHEALTHBIOALBERTA/CAMPUSALBERTA/STRATEGICCLINICALNETWORKS/TECEDMONTONWESTERNECONOMICDIVERSIFICATION


KeySectorStatistics

Draft2030InnovationTargets100%ofhumanhealthdata,social

determinants of health data, and health- relateddataintheprovincearesecure,linked, andreadilyaccessibletoimproveoutcomes andenabledecisionmakingandresearch

alberta has a high performing health care system with a per capita

cost at or below the canadian averageandimprovedservicequality

and health outcomes

Innovativechronicdisease management decreases the disease burden ofAlbertans,includingan10%decrease

inavoidablemortalityanda10% improvementinqualityadjustedlifeyears

for albertans with chronic disease

alberta to become a top 10 location forresearch,developmentand

commercializationofhealthandwellness innovationsinNorthAmerica,leadingto

social and health benefits for albertans and beyond

improve robustness of Health Data

improve Quality of care

reduce burden of Disease

Health & Wellness innovation

$9.7 billion (plus non-reimbursed expenses)

240,600

400

7-9% population growth, aging population cost growth

annual burden to alberta’s Economy

albertan’s Employed

number of facilities/ operations

other Key indicators


42

EMERGING TECHNOLOGIESSectorOutlookAITFhascreatedanewsectorofficeforEmergingTechnologiestosupportEconomicDevelopmentandTrade(EDT),CampusAlberta,andIndustrywhoexplicitlyexpressedaneedtogeneratemorevaluefromAlberta’sinvestmentsin theareasofInformationandCommunicationsTechnologies(ICT)Nanotechnology,and‘Omics’.Uponextensiveconsultationswithstakeholders,EDTandAITFhavejointlyarticulatedavisionforinnovationplatformsasfollows:Capitalize on platform technologies-enabled solutions to support a diversified 21st century knowledge intensive economy, to mitigate adverse environmental impacts and to maximize societal benefit.

ThesectorofficewillsupportEDT’sstrategicintenttocapitalizeonplatformtechnologyinvestmentsbyfocusingonconvergentopportunitiesthatwillsolveAlberta’sprioritysectorsinnovationchallenges.SimilartoAlberta’sotherkeyprioritysectors,EDThasidentifiedDraft2030InnovationTargetsintheAlbertaResearchandInnovationFramework(ARIF).Additionalplatformsandconvergentopportunitiesmayariseovertimeandbeaddedtothisportfolio(e.g.materialsengineering,cleantech,photonics,quantumcomputing).

Thegoalistoacceleratetheadoptionandcommercializationofemergingtechnologiesinourcoreindustrialandhealthsectortoimprovecompetitivenessandeffectivenesswhilesupportingthegrowthofgloballycompetitivetechnologyclusters.TheSectorofficewillfocusontheexistinginnovationsystemportfolioofinvestmentsandinitiativesintheICT,Nano,and‘Omics’areaswiththemandatetohelpbetterintegrate,leverageandstreamlineinvestments,insupportofothersectorstrategiesandprograms,anddefineandexecutestrategiesandprogramstargetingconvergentopportunitiesforAlberta(e.g.InternetofThings,sensingandanalytics).

TheneedtobettercoordinateandleverageemergingandadvancedtechnologiesacrossthehistoricAlbertainnovatessectorscanbehighlightedbythefollowingexamples:DevelopmentsingenomicsmayleadtoadvancesincropdevelopmentwithintheFoodandAgricultureSector,theFibre/Bio-industrialSector,theHealthSectorandeventhe EnergySector;whiledevelopmentsinsensortechnologiesandanalyticshaveapplicabilityinenvironmentalmonitoring,energyproduction,andhealth.TheEmergingTechnologysectorofficewillworkcloselywiththeothersectorstoraise awarenessofdevelopmentsandtheirpotential.EmergingTechnologywillalsogatherresearchandtechnologyrequirementsfromothersectorstoensureinvestmentsarealignedtofulfilltheirneeds.Formalprocessesforcross-sectorsconvergentengagementswillbedevelopedover2016-17fiscalyear.


43

aitf’S contributionthe recently created sector office of emerging Technologiesisengagingwithstakeholdersintheprocess of assessing strategic opportunities and developingassociatedexecutionplans,leveragingwhereverpossibleexistingresourcesandprogramsoftheAlbertaInnovatesCorporations.Opportunitiesbeingexploredatpresentinclude:

• LeverageexistingprovincialandAITFinvestmentsinAlbertaCentreforAdvancedMNTProducts(acamp), nano accelerator, asbiri, nanofab (UofA)Chairsandcommercializationprogramsto include new capabilities to foster the ongoing developmentofmicroelectronicsdesignandmanufactureinAlbertaWorkingincollaborationwithprivatesectorpartnerstheaimistoprovidenewmarketopportunitiesandtheHQ/SP schooledinAlbertatoworkinacommercialsetting to support local sme needs.

• Developaplantosupporttheimplementation of an internet of things industrial interoperability DemonstrationLab,withsimulationsofkeyindustrial processes including the digital oilfield. partners such as tecterra, acamp, aicml and privatesectorpartnerswillcontributethegeospatial, electronic and artificial intelligence technology across resource management sectors.

• SupporttheongoingworkoftheEnvironmentand health sector offices in detailing data systems and data analytics requirements in the health system and for integrated resource, LandandEnvironmentalManagementtodirectcampus alberta and sme funding support to addressing identified requirements.

• DesignprogramsandprojectsthatmaximizesynergiesandSMEengagementbyleveraging acoordinatedapproachofexistingprovincialandfederalinvestmentsintheemergingtechnology space to support the multiple initiativesongoinginAITF’ssectorsincluding:pipelinemonitoring;reservoirmonitoringandmodeling;IRMS;environmentalmonitoring;precisionfarming;livestockgeneticsandHealth.

KeyProvincialSectorStatistics


Partners*PRIVATEINDUSTRYANDENTREPRENEURIALGROUPSACAMP-ALBERTACENTREFORADVANCEDMNTPRODUCTSTECTERRA/CYBERA/AICML–ALBERTAINNOVATESCENTREFORMACHINELEARNINGNRC–IRAP,WD/SERVICEALBERTA/ALBERTADATAPARTNERSHIP/CAMPUSALBERTA&RIN


support the cleantech sector to increaseindustrysalesrevenueby25%

thereby increasing alberta’s global marketshareby20%

$14.2 billion

the ict industry in alberta generates morethan$20billioninannualrevenues andtheprovinceisthebestinCanadafor

digitalliteracyandconnectivity

$1.4 billion

ThevalueofAlberta’smanufacturing sector will increase from $18.8 billion (2014) to$40billionthroughthedevelopmentof advancedmaterials,instrumentation,

andrepurposingjobs

40,378

4,634

Green Economy

2013 revenues

Digital Economy

2011 Exports

advanced manufacturing & Workforce Development

2015 number of Employees

2015 number of companies


44

Senior Research Engineer Jonathan Heseltine of C-FER Technologies in Edmonton, Alberta, investigates cement alternatives to improve the integrity of steam injection wells in the oil sands.


45RiskAssessmentAspartofAITF’sEnterpriseRiskManagementprocess,managementactivelymanagesthe riskswhichcouldadverselyimpacttheabilitytodeliverontheorganization’sbusinessplan. Thefollowingsignificantriskswereidentifiedbyseniormanagement:1. Decliningrevenuestreamsduetocurrenteconomicenvironmentfrombothindustryandgovernmentclients.

AITFfundsitsmandatefortheProvinceofAlbertathroughtworevenuestreams–contractresearchforcommercialenterprisesandgovernmentclients,andfundingfromtheGovernmentofAlberta.Contractresearchrevenuesaccountforalmostathirdofthecorporation’sincome,whichishighlyconcentratedwitharelativelysmallnumberofoilandgassectorclients.DuringstrongeconomictimesthisrevenuestreamenabledAITFtomaintainandimproveitscapacitytoprovidecriticalsupportservicestoAlbertaindustryandgovernment.Whilethereisincreasingpressureonbothrevenuestreams,thelongtermnatureofresearchandinnovationrequiresAITFtosustaincriticalhumanandinfrastructureassetsinplace.Itismanagement’sbeliefthattheprovincehasnotlikelyseenthefullimpactofthedownturn.Iftheeconomicdeclinecontinues,itwillputsignificantstrainontheorganization.Overthelast2years,contractresearchrevenueshavedeclinedbyapproximately11%,thisisdespitealargeonetimecontractearned atAITF’swhollyownedsubsidiary,C-FERTechnologies.Contractresearchrevenuesarebudgetedtodeclinebyanadditional10%intheupcomingfiscalyear.

POTENTIALIMPACT:MEDIUM LIKELIHOODOFOCCURRENCE:HIGH

Mitigationstrategy:

AITF’sbusinessplanandbudgethasbeencarefullydeveloped,balancingshorttermfiscalpressureswiththelongtermdemandsofresearchanddevelopment.Discretionaryexpenseshavebeenreduced,andadditionalcontrolshavebeenputinplacetomonitorAITF’sfinancialpositionmonthtomonth.

Duringthesechallengingtimes,astrongfocusonbusinessdevelopmentandsupportofourclientswillbemaintained.Staffhasbeenencouragedtothinkofout-of-theboxsolutionsandmaintainflexibility,acknowledgingcurrentfiscalpressureswhilestillprotectinglongtermoutcomes.Ourbusinesssupportforresourcebasedclientshasswitchedtowardshelpingcompaniescomedownthecostexperiencecurve.

2. Agingworkforceandsuccessionplanningincriticalareas. ManyAITFstaffarehighly-specializedintermsofskillsandexperiencewhichisnoteasilyreproducedorreplaced.

Asaresult,hiringdecisionsmustbestrategicandcandidatesmustmeetthetechnicalrequirementsofaknowledge-basedworkenvironment.Nationally,attheuniversitylevelSTEM(ScienceTechnologyEngineeringMath)fieldsrepresentjust24.5%ofallfieldsofstudy,53.5%ofearneddoctorates(PhDs)and25.8%amongmaster’sdegreesin20161.ThesestatisticsdemonstratethelimitedtalentpoolforwhichAITFcompeteswithprivateindustryandothergovernmentbodiesandagencies.Whilethecurrentdownturnandlayoffshasincreasedthepoolofcandidates,itiscriticaltonotethathighlyskilledprofessionalsarealsohighlymobile.IfuncertaintyishighinAlberta,andopportunitiesareseenasbeingmoreplentifulinotherregionsofCanada,orothercountries,talentcaneasilymigrate.

POTENTIALIMPACT:MEDIUM LIKELIHOODOFOCCURRENCE:MEDIUM

1StatisticsCanada:PostsecondaryStudentInformationSystem(PSIS)Report,November,2015


46 Mitigationstrategy:

ManagementhasactivelyidentifiedthekeypositionsandindividualswhoselosswouldposethegreatestrisktoAITF;thebusinessplanandbudgetallowsfortheprudentreplacementofkeyindividualsastheychoosetoretire.Theextensivelay-offsintheenergysectorinparticularmayincreasethecurrentpoolofhighlyqualifiedcandidatesavailableforrecruitment.Theorganization,inpartnershipwithEDTandCampusAlbertaisalsolookingtoadoptflexibleworkarrangements,whichwouldprovideincreasedopportunitiestotrainanddevelopnewgraduatesinSTEMfieldswithinAITF’sAppliedResearchteam.

3. CoordinationofactivitieswithinAlberta’sinnovationsystem Inthelastfiveyearstheresearchandinnovationlandscapehaschangedsignificantly,andincreasinglyAlberta’s

needstotakeanintegrated,cross-sectoralapproachtorespondtocomplexchallengessuchasclimatechangeandstructuralshiftsinourenergysector.Increasedcoordination,amongstsystemplayersisneededtodrivetheoutcomesrequiredoftheinnovationsystem.


Mitigationstrategy:

ThroughtheInnovationCollaboratories,significantstridesarebeingmadeindevelopingacrossgovernmentapproachtosettingresearchandinnovationpriorities,whichhavebeenformalizedintheDraft2030InnovationTargets.ThesetargetswillbeusedbytheAlbertaInnovatescorporationsandCampusAlbertatofocusactivities.WhileAITFstronglysupportstheCollaboratorymodel,werecognizethechallengesposedbylargegroupcollaboration.AsmembersoftheirrespectiveInnovationCollaboratories,AITF’sSectorLeadswillcontribute theirleadershipskills,knowledgeandalignAITF’sresourcestothepriorityareasperceivedtohavethegreatestgame-changingvalueforAlbertans.Sectorleadersandmanagementareheldaccountabletooutcomesby AITF’sindependentBoardofDirectors.ThenewlyannouncedconsolidationofthefourAlbertaInnovatesCorporations,willsignificantlycontributetoimprovedcoordinationandcollaborationwithinAlberta’s innovationsystem.

4. Agingcapitalandtechnologyinfrastructure AITFoperatesoveronemillionsquarefeetofproductandprocessdevelopmentandscale-upfacilitiesin

Edmonton,Calgary,DevonandVegreville.Thisincludesa300hectareresearchfarm,threegreenhouses, and36growthchambers.Inadditiontoourfacilities,AITFalsopossessesasubstantialinventoryofresearchequipmentwithanestimatedreplacementassetvalueofabout$100M.Thepurposeofourfacilitiesandcapitalassetsistoacceleratetheadoptionofinnovationandnewtechnologyintoourprimarysectors,whichleadstoimprovedcompetitivenessandfinancialperformanceofAlbertaindustry.However,asdetailedinourCapitalPlan,AITFhaslimitedsourcesofcapitalandisheavilydependentontheGovernmentofAlbertaforcapitalfundingtomaintaintherequiredfacilitiesandinfrastructurefortheappliedresearchsideofourbusiness.Withthecurrenteconomicdownturn,managementhasmadethestrategicdecisiontounderinvestincapitalinthecurrentyear,withaneyetoreversingthistrendinthenearfuture.Itiscriticaltonote,suchactionsarenotwithoutsignificantdownside.Whencapitalinvestmentisshort-termoriented,andfocusedonthemaintenanceofcurrentcapacity, itlimitsAITF’sabilitytoprovidemeaningful,andgame-changingresearchanddevelopmentsupportto Albertabusinesses.


Mitigationstrategy:

AITFinpartnershipwiththeCollaboratoriesandEDTwillworktodeterminepriorityareasforAppliedResearchcapitalmaintenanceandinvestment.Managementwillactivelyadvocateforandensurecurrentcapitalsupportsthesestrategiesandisfundedaccordingly.AlongtermPlannedCapitalExpenditurePlanandreplacementstrategywillbeinitiatedtoensureAITF’stechnologicalandphysicalassetsremainrelevantinthemarketplace.


47

corPoratE GoaLS & PErformancE mEaSurES

what gets measured gets done –

as a result both public and private sector

organizations develop goals and key

performance indicators (kpi’s) to

communicate priorities to stakeholders and

how they will be measured. in the innovation

space, developing meaningful kpi’s is

particularly challenging for many entities.


48

goalsTherecentclarityofpurposeachievedbytheinnovationecosysteminAlbertahasallowedAITFtoevolveitsKPI’sdesignedforthethreefunctionalbusinessstreams–CampusAlberta/BasicResearch,AppliedResearchandCommercialization.Lookingahead,monitoringkeyperformancemetricsanddemonstratingthevaluefromAITF’sdiverseportfolioisakeypriorityofmanagement.

CaMPus alberTa/basiC researCH AITFwillleverageitsrelationshipswithindustrypartnersandpost-secondaryinstitutionstofocusinvestmentstowardstheachievementofthe2030InnovationTargets.AsaresulttheexpectedoutcomesandmeasuresbelowshowcaseamovementawayfrommeasuringnumbersofindividualprojectsandprogramsfundedbyAITFtothequantificationofindustrycollaboration,retentionofknowledgewithintheProvince,andthealignmentofinvestmentstothe2030InnovationTargets.

WhileAITFispleasedwiththeevolutionofthemeasuresinCampusAlberta/BasicResearchascomparedtothepast,additionalprogressisrequiredtoreportontheimpactandprogresstowardsachievementofthe2030InnovationTargets.AITFlooksforwardtoworkingwithInnovationSystemPartnerstocontributetooutcomecentrickeyperformancemeasureswithinCampusAlberta/BasicResearchfocusedinnovationinvestments.

Goal 1: Increasethedevelopmentofuse-inspiredresearchandretentionofknowledge.

ExpectedOutcome OutcomeMeasure

1.1StrongcollaborativepartnershipswithIndustry a.PercentageofChairswithfinancialcontributionsfromthe privatesectorb.RatioofprivatesectorfundingtoAITFfundingforChairs

1.2Investmentalignmenttoward2030InnovationTargets a.PercentageofChairfundingalignedwiththe2030 Innovation Targets

1.3High-quality,graduateandpostgraduatetraininginareas directlycontributingtowardthe2030InnovationTargets

a.PercentageofGraduateStudentScholarship(GSS)recipients workinginareasdirectlycontributingtowardthe2030Innovation Targets

OutcomeMeasure Actual2015-16 Target2016-17 Target2017-18 Target2018-19

1.1aPercentofChairsonprojectswithfinancial contributionsfromprivatesector

40% 40% 50% 60%

1.1bPrivatesectortoAITFfundingratioforChairs 1to1 1to1 1.5to1 2to1

1.2aPercentofChairalignmentwiththe2030 Innovation Targets

88% 88% 95% 100%

1.3aPercentofnewGSSrecipientsworkinginareas directlycontributingtowardthe2030Innovation Targets

80% 80% 100% 100%


49

Joint Research and Innovation Initiatives with other alberta Innovates Corporations – WithinBasicResearch/CampusAlbertaportfolio,AITFhasanumberofkeyjointprojectswithitssisterAlbertaInnovatesCorporations.Afewkeyexamplesare:

Cellulose Nano-Crystals (CNC) 2.0 Challenge with Alberta Innovates Bio-Solutions (AI-BIO)

AITFandAI-BIOhavecollaboratedtoprovidefundingforR&DprojectsthatadvancetheknowledgeanduseofCNC,anadvancedbiomaterial.Thenewprogramisintendedtosupportearly-stageworktodemonstratetechnicalfeasibilityofCNCinhigh-valueapplicationswithpotential forcommercialization.AITFandAI-BIOwillsupportuptoeightprojectsandprovideeachapplicantwiththefollowing–upto$25,000infunding,uptoonekilogramofCNCfromAITF’spilotplant,accesstoAITF’sresearchers,capacityandfacilities.

Climate Change & Emissions Management Corporation (CCEMC) / Ingenuity Lab with AI-BIO

AITFChairCarloMontemagnoisreceivingadditionalfundingfromtheAI-BIOCCEMCprogramforatwo-yearprojectthataimsto optimizeascalableengineeringsystemthatusesindustrialGHGemissionstogeneratehighvaluechemicalscompatiblewithAlberta’spetrochemicalinfrastructure.

Livestock Gentec with AI-BIO

LivestockGentecisanAI-BIOcentrebasedattheUniversityofAlberta.LivestockGentecwascreatedin2010tocontinuetheAlbertaBovineGenomicsProgram’sresearchandbringthecommercialbenefitsofgenomicstotheCanadianlivestockindustry.AITFprovidessupporttothisendeavourthroughannualfundingandboardparticipation.

Various alberta Innovates Corporations AITF Chairs Co-funded with Other Alberta Innovates Corporations

FiveChairswithinAITF’sStrategicandIndustryChairprogramareco-fundedbyAIHSorAlbertaInnovatesEnergyandEnvironmentSolutions(AIEES).Theirprimaryresearchareasincluderenewablesolarenergy,cleanenergyextraction,preventionandearlydetectionofdisease, bio-molecularsimulation,anddrugdiscovery.

aPPlied researCHLookingahead,AITFisworkingtobetterintegratetheactivitiesofAppliedResearchwithinAlberta’sInnovationSystem.AsaresulttheoutcomesandKPI’soutlinedbelowarefocusedonmeasuringthedegreeofjointindustryandgovernmentresearchandalignmentofactivitiestothe2030InnovationTargets.ThisrepresentsanimportantshiftfortheCorporation.Previously,KPI’sforAppliedResearchwerecenteredontheamountofrevenues earnedversusthequalityofjointindustryresearchandalignmenttokeyprovincialpriorities.Intheupcomingyear,furtherrefinementsareanticipatedtobemadetotheKPI’swithinAppliedResearch.

Goal 2: Acceleratethecreationofeconomic,environmentalandsocialvaluethroughjointindustryandgovernmentinvestmentsandpartnercollaboration.

ExpectedOutcome OutcomeMeasure

2.1StrongcollaborativepartnershipswithIndustry a.PercentageoftotalcontractresearchrevenuesfromJoint Industryprojects

2.2Supporttheachievementof2030InnovationTargets* a.Newprogramslaunchedtosupporttheattainmentofthe 2030InnovationTargets

2.3Responsive,customer-centricresearchorganizationc.Annualclientretentionrated.Numberofclientsservedduringthefiscalyear

*2015-16revenuesandprogramsweretrackedagainstSectorGrandChallengesasthe2030InnovationTargetswerestillunderdevelopment


50

OutcomeMeasure 2015-16 Target2016-17 Target2017-18 Target2018-19

2.1Percentageoftotalcontractresearchrevenues fromJointIndustryandgovernmentprojects

33% 37% 42% 47%

2.2Annualclientretentionrate 60% 60% 60% 62%

2.3Numberofclientsservedduringthefiscalyear 600 650 750 850

Joint Research and Innovation Initiatives with other alberta Innovates Corporations – WithinAITF’sAppliedResearchportfolio,AITFhasanumberofkeyjointprojectswithitssisterAlbertaInnovatesCorporations.Afewkeyexamplesare:

Biochar with Alberta Innovates - Bio Solutions (AI-BIO)

Biocharisacarbon-richsolidproducedbypyrolysisofbiomassresidueshavingmanyhigh-valueapplicationsintheagroforestry,environmental, andenergysectors.AITFandAI-BIOsupportcustomersandindustrialpartnersaimingtodevelopandcommercializebiochar-basedproducts.

Improving water and nutrient use in barley and wheat with AI-BIO

AI-BIOandAITFarepartneringinaprojectlookingattherelationshipbetweenresiliencetonutrientandmoisturestressandrootarchitecture. Thisprojecthasidentifiedvarietiesthatdifferfordroughtstressresistanceandnitrogenuseefficiency,knowledgethatwillallowidentificationof genesthatcanbeusedtodevelopbarleyandwheatvarietiesthatyieldwellinstressfulconditions.

Predictive Ecosite Mapping with Alberta Innovates Energy and Environment Solutions (AIESS)

AI-BIO,AIEESandEnvironmentSolutions,andEDTsupportedthePredictiveEcositeMappingProject.Ecositeinformationisneededbyindustry,government,andothersforland-useplanning,reportingonthestatusofbiodiversity,andforindustrytoobtaindevelopmentapprovals.Thisprojectpilotedanewwayforcreatingthisnaturalresourceinventorybyapplyingmachinelearningtechniquestodigitalelevationdataand existingecositeinformationprovidedbyindustrypartners.Themappingplatformwillbecommercializedbyacommercializationpartner.

CoMMerCializaTion AITFmanagesadiversearrayofprogramsfocusedonsupportingtechologybasedSMEstoachievecommercialsuccess.TheKPI’sinthisbusinessstreamareconcentratedonmeasuringthegrowthinrevenuesandjobscreatedbyAITF-fundedSMEsandtheCorporationssupportoftheseSMEs.

Goal 3: AcceleratecommercialsuccessforAlbertaSMEsandentrepreneursthroughanintegratedcommercializationsystem.

ExpectedOutcome(s) OutcomeMeasure(s)

3.1Effectivedeploymentofcommercializationinitiatives a.AggregateNetPromoterScoreofSMEs1

3.2Regionallyaccessiblebusinessmentorshipexpertisea.PercentageofAITF-fundedSMEswhofoundTDA’stobehelpfulb.PercentageofAITF-fundedSMEswhoreceivedassistance fromaTDA

3.3Sustainablejobcreationbytechnology-basedSMEs a.NetjobscreatedbyAITF-fundedSMEssubsequenttofunding

3.4AITF-fundedSMEsareabletoraisefollow-oncapitalfrom privatesources2

a.Ratioofnetfollow-onfundingraisedsubsequenttoAITF’s fundingsupport

1 The‘NetPromoterScore’wasassessedbyacustomersurveyconductedbyanindependent-thirdparty.Itrepresentsthenetpercentage ofcustomerswhoare‘Promoters’ofAITFandiscalculatedasfollows:(%ofAITFPromoters)-(%AITFDetractors).AnNPSScoreof50 or greater isconsideredtobeexcellent.

2 Privateinvestmentsincludethefollowing:Venturecapital,angelinvestment,strategic&foreigninvestment,loansandshareholderinvestment. Aninvestmentisconsideredtobe‘follow-on’,onlyifitwassecuredafterAITF’sinitialinvestmentintheSME.


51

OutcomeMeasures Actual2015-16 Target2016-17 Target2017-18 Target2018-19

3.1aAggregateNetPromoterScoreofSMEs 65 65 65 65

3.2aPercentageofAITF-fundedSMEswhofound TDA’stobehelpful

93% 58% 65% 65%

3.2bPercentageofAITF-fundedSMEswhoreceived assistancefromaTDA.

53% 85% 85% 85%

3.3aNetjobscreatedbyAITF-fundedSMEs subsequenttofunding

TBD1 TBD1 TBD1 TBD1

3.4aRatioofnetfollowing-onfundingraised subsequenttoAITF’sfundingsupport

TBD1 TBD1 TBD1 TBD1

1 AITFcollectedthedatatoreportonthismeasureforthefirsttimein2015-16basedonasurveyconductedofSMEsfundedoverthelastthreeyears,howeversincewedonothaveyear-over-yeartrendingavailableitisdifficulttosettargetsforindividualyears.Wewillworktosetthesetargetsintheupcomingyear.RegardlessreportingonActualresultswillbeshowcasedinourAnnualReport.

Joint Research and Innovation Initiatives with other alberta Innovates Corporations –

AlbertaInnovates-TechnologyFuturesisactivelyworkingwithAlbertaInnovates–HealthSolutionsindevelopingtheAlbertaSmallBusinessInnovationandResearchInitiative.ThisprogramisdesignedtoenableAlbertaSmallandMediumEnterprises(SMEs)indevelopingsolutionstoidentifiedindustryandpublicsectorchallenges,includingthoseintheHealthSector.


52 BudgetAlbertaInnovates-TechnologyFutures

ConsolidatedStatementofOperationsforallFundsThreeYearFinancialPlan($inthousands)

2014-15Actual

2015-16Budget

2015-16Actual

2016-17Budget

2017-18Target

2018-19Target

Revenues Government Transfers GovernmentofAlbertaGrants 41,940 41,722 40,422 37,880 37,880 37,880 RestrictedProvincialFunds 42,962 48,082 43,800 43,232 43,232 43,232 RestrictedProvincialFunds-PriorYear 536 7,596 6,867 13,051 13,327 8,101 OtherProvincialFunds 10,407 10,230 11,217 11,560 12,369 12,987 ExternalContractRevenue 55,614 50,046 54,556 43,457 46,499 48,824 ContractRevenuefromProvinceofAlberta 3,495 4,077 4,032 4,104 4,391 4,611 ProductSales 4,375 2,731 1,746 976 1,044 1,096 OtherRevenue 870 790 479 500 525 551 total Revenue 160,199 165,274 163,119 154,760 159,267 157,282

expenses line of Business AppliedResearch 104,682 96,643 97,479 88,592 91,080 92,193 BasicResearch 41,286 40,389 39,064 30,993 30,668 28,717 Commercialization 22,089 31,759 25,679 39,041 38,632 36,175 total expenses 168,057 168,791 162,222 158,626 160,380 157,085Net Operating (Deficit)/Surplus (7,858) (3,517) 897 (3,866) (1,113) 197Loss(Gain)onDisposalofCapitalAssets 54 - 36 - - -Annual Operating (Deficit)/Surplus (7,912) (3,517) 861 (3,866) (1,113) 197

Capital Investment and net Change in Capital assets NewCapitalInvestment 4,847 4,796 4,932 6,285 6,500 6,500 Less:Amortization (4,613) (5,258) (4,684) (5,059) (5,110) (5,212) (Loss)/GainonDisposal/Write-down (54) - (36) - - -net Increase (decrease) in Capital assets 180 (462) 212 1,226 1,390 1,288

Change in net assets AccumulatedSurplus,BeginningofYear 53,710 45,401 45,798 46,659 42,793 41,680 AnnualOperating(Deficit)/Surplus (7,912) (3,517) 861 (3,866) (1,113) 197

Accumulated Surplus, End of Year 45,798 41,884 46,659 42,793 41,680 41,877

Comparable


53

AlbertaInnovates-TechnologyFutures

2016-17KeyOutcomes$inthousands

LineofBusiness

Total 2016-2017Budget($’000)

KeyOutcomesoftheAlbertaResearchandInnovationSystem

Drivesthegrowthanddiversificationoftheeconomy

($’000)

Enablesthecost-effectivediscovery,developmentandproductionof

naturalresources($’000)

Mitigatesenvironmental impacts($’000)

Enhancesthehealthandwell-beingofAlbertans($’000)

Commercialization $39,041 $14,794 $10,559 $11,400 $2,288

AppliedResearch $88,592 $33,570 $23,961 $25,869 $5,192

BasicResearch $30,993 $11,744 $8,383 $9,050 $1,816

TOTAL $158,626 $60,108 $42,904 $46,320 $9,294

*Researchandinnovationinitiativesshouldbethesameasthoselistedinthebudgettableabove.


54 AITFCapitalPlanandLeasingArrangements CapitalRequirementsAITFoccupiesasignificantinventoryofresearchandofficefacilities,mostofwhichareownedandoperatedbyAlbertaInfrastructure.AITFoperatesoveronemillionsquarefeetofproductandprocessdevelopmentandscale-upfacilitiesinEdmonton,Calgary,DevonandVegreville.Thisincludesa300hectareresearchfarm,threegreenhouses,and36growthchambers.Inadditiontoourfacilities,AITFalsopossessesasubstantialinventoryofresearchequipmentwithanestimatedreplacementassetvalueofabout$100million.AITFhaspersistent,ongoingrequirementstomaintain,update,reconfigure,andexpandourinnovationinfrastructuretomeettheappliedresearch,sector,andprovincialpriorities.

Capitalplanningandinvestmentneedsarecategorizedintotwostreams–AppliedResearchandCorporateCapital.

• AppliedResearch:IndustryandpublicsectorclientsaccessAITF’sworldclassscientistsandtechnologicallyadvancedfacilitiesrequiredtotestandadoptnewtechnology.

• Corporatecapital:Investmentsprovideintegratedsystems(particularlyITsystems)withtheappropriatesafeguardstosupportandsustaintheongoingoperationsofAITF.

Capitalfundinghastraditionallycomefromtwosources:internalAITFfundingforresearchequipmentandAlbertaInfrastructurefundingforprogramaccommodationprojects.AstheGovernmentofAlbertasteerstheprovincethroughturbulenteconomictimes,AITFrecognizestheneedtocreateefficienciesandgeneratevaluetomaximizecapitalutilization.AITFhasinvestedapproximately$6millionofinternalresearchequipmentcapitalfundingtosubsidizehighpriorityaccommodationprojects.AITFhasbeenworkingcloselywiththeEDTandTradetodevelop aninnovationinfrastructureplanningandbudgetingprocesswithaviewtoaddressthecapitalshortfall.Inaddition,anassetmanagementsystemisbeingimplementedatAITFtoensureeffectiveutilizationandmanagementofourassetsforpriorityprograms.

The2016-17businessplanrecognizesthechallengesposedbythecurrentoperatingfundingfromthegovernmentandtheweakeningindemandforcontractresearch.Nonetheless,AITFwillcontinuetoinvestatpreviouslevelstomaintainourabilitytosupportourclientswiththelatestresearchequipmentandtoupgradeagingassets.

AITFwillalsorequestadditionalfundingfromEDTandAlbertaInfrastructure.Inthe2016-17planningcycleAITF hasrequested$6.75millionfor2majorcapitalprojectswhicharedetailedintheThreeYearCapitalPrioritiesof thisbusinessplan.AtthetimethisbusinessplanwaswrittenAITFwasawaitingfinalconsiderationforthisfunding.

LookingtothefutureDespiteneedingadditionalfundingforcapitalinvestmentintheupcomingyearAITFwillbeworkingonbuildinganinventoryofAppliedResearchandCorporatecapitalassets,determiningtheutilizationofkeyassets,andbuildingalongtermcapitalplanwithaneyetothedirectionandprioritiesofAITF,thelargerinnovationecosystem,andsustainabilityofAlberta’sAppliedResearchcapacity.


552016-2019Three-YearCapitalPlanFundingPriorities$inthousands

ProjectsbyLocation

TypeofProject ProjectScopeandJustification ProposedTimeline

2016-17Estimate

2017-18Target

2018-19Target

3-YearTotal

FundingSources

Devon–AITF

Alberta–CanadaCollaboratoryin Cleaner OilSandsDevelopmentMemorandumofUnderstanding

MajorCapital MOUstrategiccapitalplanimplementationtosupportimmediateandlonger-termspacerequirementsofAITFandNRCan.TotalProjectCost:$103.5M

Note:2016-17estimateisforaddressingAITFprioritysafetyissues.

2to60months

$6,000 $24,000 $58,000 $88,000 Potential:EDT,AlbertaInfrastructure,GOA

Edmonton–AITF

SectorOfficeCollaborative WorkEnvironment Development

MajorCapital Redevelopknowledgecentresectorofficespacetocreateawork environment that engages peopleandinspirescollaboration. TotalProjectCost:$1.9M

2 to 24 months

$750 $1,124 $0 $1,874 Potential:EDT,AlbertaInfrastructure,GOA

Calgary–AITF

AITFCalgaryProgramExpansion

MajorCapital RedevelophighheadandadministrativespacetosupporttheeffectivenessandgrowthofCalgaryprogramsalignedtoprovincialprioritiesintheSME’s,Petroleum,EnvironmentandWaterManagementprograms. TotalProjectCost:$11.6M

24to60months

$0 $0 $1,400 $1,400 Potential:EDT,AlbertaInfrastructure,GOA

AllSites–Miscellaneous

ProgramEquipment,MinorFacilityProjectsandCorporate Systems

OngoingCapital Investment

Miscellaneouscorporatesystemsandequipmentidentifiedfromannualbudgetingprocess.

2to12months (project

dependent)

$6,285 $6,500 $6,500 $19,285 Potential:AITF,EDT,Alberta Infrastructure,GOA

$13,035 $31,624 $65,900 $110,559

CommercialLeaseArrangementslocation size Termination date scope of operations

1.Victoria 5,030squarefeet July31,2018 WaterCharacterizationGroup

2.EdmontonPylypow 12,925squarefeet June30,2019 SpacetosupportoperationsofAITFIndustrialSensorsgroup

3.C-FEREastPylypow 36,650squarefeet March31,2019EngineeringConsultingandFullScaleTestingforC-FER’sPipelinesandStructures

Edmonton 250KarlClarkRoad Edmonton,ABT6N1E4 780.450.5111

Vegreville POBag4000,Hwy16A&75Street Vegreville,ABT9C1T4 780.632.8211

Calgary 3608–33StreetNW Calgary,ABT2L2A6 403.210.5222

Devon 1OilPatchDrive SuiteA129 Devon,ABT9G1A8 780.987.8744

accelerating innovation · 2019-08-21 · accelerating innovation. alberta innovatestehnolog tres i...

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