The project is administered by the Canadian Health Food Association (CHFA) on behalf of Nutri-Net Canada - a coalition of functional food and natural health products organizations.
The investment has an agricultural incentive to it and was announced by the federal Ministry of Agriculture and Agri-Food whose mandate has been to reinvigorate lagging agricultural sectors in the country.
The sectors which have suffered particularly include crop farmers in the central and Western parts of the country who now earn less for their output, as well as the fisheries industry on the Eastern seaboard which has suffered a decline in stocks.
The Nutri-Net Canada Project is designed to bring together public and private sector stakeholders from across the country so as to hammer out a national strategy for stimulating growth of the functional food and natural health products industries.
"Consumers today are becoming more interested in extra nutritional benefits in their food staples, such as cereals, eggs, juice and bread," said Agriculture and Agri-Food Minister Chuck Strahl. "This is great news for the Canadian agri-food industry and Canadian farmers as this industry grows."
The project is set to include case studies, as well as workshops and conferences, and a nation-wide networking website for industry members. The purpose behind all this is also to bring together public and private sector stakeholders.
The project's total budget is C$1.6mn, with the remainder coming from C$900,000 industry.
The Canadian government has been plugging significant amounts of cash into the study of derivatives from agricultural production for use in functional foods or nutraceuticals.
In 2006, the government funnelled C$2m into identifying plant, animal and marine compounds that can benefit health. This was destined for the development of the National Research Council's Institute for Nutrisciences and Health on the University of Prince Edward Island campus.
The Richarson Centre for Functional Foods and Nutraceuticals opened in the same year in the Western province of Manitoba. Its focus is the development of functional foods and nutraceuticals from Canadian prairie crops.