Atlantic Innovation Fund helping to diversify regional economies

Focus on Atlantic Canada innovation

The chair of the advisory board for the Atlantic Innovation Fund (AIF) says projects being recommended in the fifth and latest round are the strongest he's seen since the Fund was launched in 2000. Dr Arthur May says the $600 million invested by the federal government in the AIF is "money well spent" with increasing private sector involvement helping to diversify the region's technology base and strengthen its research capacity.

Once the results of the fifth round are announced in early 2008, more than $500 million will have been allocated, with one or two more rounds scheduled before the end of the AIF's second five-year phase in 2010.

"The applications coming from the private sector are interesting. We're getting a lot of information technology and a bit of biotechnology and aquaculture," says May. "We're getting applications in areas that you would think of in Atlantic Canada as non-traditional activity. That's good. The economic base is diversifying."

The AIF was launched and renewed under the previous Liberal government and opinion varies as to whether it will be renewed by the Harper Conservatives. May says it should continue, since the Fund's track record indicates enhanced R&D capacity across all sectors.

"This is money well spent. In some cases it's public infrastructure while in other cases it's giving a small outfit a bit of a head start. Most private sector applications are small entities which need that extra help or extra push," he says. "In a region where private sector R&D capacity is the lowest in the country, but is well supplied with universities as engines of economic growth, there is a lot to be said for putting public and private expertise together. Many AIF proposals do that … It is a first-class means of putting that expertise together to do things that are risky and wouldn't otherwise get done."

May also discounts the occasional augmentation of advisory board recommendations with additional projects selected by the minister responsible for the Atlantic canada Opportunities Agency. The first competition saw eight projects added to the list of 39 selected by the advisory board (R$, August 30/02). Other projects have been added in subsequent funding rounds, but May says it hasn't been every round and that the political selections tended to be private sector-led projects that were close to the advisory board's approval threshold.

"I don't see it as very worrisome. When it has happened, it has happened just below the cutoff line. No minister has ever gone to the bottom of the barrel and pulled up a project," he says. "We tend to give advice against a specified target … If they put more money on the table, we could have gone further. So the minister of the day put more money on the table and went further … It created a much better public-private balance."

Whether the AIF is helping to increase private sector R&D in the region is an issue of considerable debate. The latest Statistics Canada data show that industrial intramural expenditures are increasing, particularly in the manufacturing sector. From FY01 to FY05, private sector R&D outlays increased 70.4% from $159 million to $271 million. (Curiously, Statistics Canada does not register any industrial R&D in the areas agriculture, forestry, fishing, mining, oil and gas extraction or utilities).

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