CRC cutting tech transfer and non-wireless research; reducing staff by nearly one-third

By Debbie Lawes

Less than three months after receiving its third Emmy from the US National Academy of Television Arts & Sciences, RE$EARCH MONEY has learned that the Communications Research Centre lab behind this technological achievement is among several to be shuttered as part of the government's austerity Budget. Industry Canada is downloading the lion's share of its more than 200 affected jobs to its Ottawa lab, and reducing or eliminating CRC's technology transfer activities and all R&D not related to wireless communications.

The cuts will significantly reduce the 43-year-old centre's research capabilities. They have also raised concerns about its future capacity to provide information, communication and technology (ICT) expertise to industry, government and academia, as well as its ability to represent Canada on the global stage in international collaborations and standards development.

CRC president Dr. Jean Luc Bérubé was not available for an interview, instead referring questions to Industry Canada. In a written response, the department said CRC's research in support of government departments and the private sector will be realigned to ensure it supports Industry Canada's policy and regulatory mandate — namely wireless and spectrum issues, and to a lesser extent, federal public safety and security needs.

The changes mark a significant shift for CRC, from a "federal centre of excellence for research in ICT" to a more narrowly defined "federal centre of excellence for research in wireless technologies".

"Given the explosion of demand for wireless broadband services connecting people and machines, demands are increasing for radio frequency spectrum," Industry Canada states. "The CRC will continue to support government policy decisions and programs through unbiased scientific advice on optimizing spectrum use."

Many science-based departments and agencies are cutting staff and programs to meet the government's target of shaving $5.2 billion, or 6.9% of federal spending (R$, April 17/12). Industry Canada must find savings of $6.1 million in FY11-12, increasing to $15.8 million annually by FY13-14. The Public Service Alliance of Canada was advised that 219 jobs would be cut at Industry Canada (other reports have put it above 280). The majority of those jobs (about 150) appear to be coming from CRC's staff of some 400, including about 240 research personnel. Some will be reassigned to other departments, some will retire and those remaining will be laid off.

Research areas affected

CRC is the only federal lab in Canada that offers government departments, industry and academia independent scientific advice, technology development, standards setting, technology transfer and public policy related to broadcasting and interactive multimedia, broadband networks, satellite communications, photonics and wireless. CRC provided services on a cost-recovery basis that supported each client's respective mandates. Under the new rules, CRC will focus on activities that support Industry Canada's core mandate.

CRC's biggest client after Industry Canada is the Department of National Defence. DND's lab, Defence R&D Canada, will see its budget slashed by 13% and its workforce reduced by 15%, or 242 jobs. Sources say this will undoubtedly reduce the amount of collaborative work between DND and CRC.

As for CRC, the plan is to discontinue or significantly reduce research programs related to photonics/optical networks, audio and video technologies, and intellectual property (IP) and technology transfer. It will also cut, and likely begin outsourcing, its technical support services, including IT support, graphic arts design and production, technical design, printed circuit board prototyping and model shop services.

Many small companies in CRC's Innovation Centre incubator take advantage of these services. Sources expressed concern that the cuts will make it more difficult to attract start-ups to the Shirley's Bay campus.

Industry Canada says collaborations with companies will continue, "but each and every one will complement our role of supporting the policy and regulatory mandate of Industry Canada".

CRC's "culture of commercialization"

The notices to employees last month came just weeks after CRC's audio group shared an Emmy Award for developing a system for measuring loudness in TV ads — an innovation that will help the industry adhere to government regulations. The CRC's video group won an Emmy in 2009 for its work in standardizing the ATSC digital TV system, which recently replaced the NTSC system in Canada and the US.

A 2010 economic impact analysis prepared by Doyletech Corp found that CRC generated $45 million in licensing and contracting-in revenue between 1990 and 2009. Its bigger impact, however, has been in benefits to industry. Doyletech determined that commercialization of technology transferred from CRC to Canadian clients created more than 3,400 person-years of employment and generated sales revenues of $688 million over the 20-year period. In 2010 alone, spin-off companies contributed over $525 million in taxes from revenues of $2.6 billion.

"I've always been impressed by CRC. It has a culture of commercialization that is unusual for a government department," says Doyletech chairman Denzil Doyle. "You generally get economic payback by spin offs, licensing or through contract research. CRC has done a good job on all fronts, especially Fiber Bragg Gratings (FPGs)."

Developed by CRC, FPGs are recognized as one of the most significant enabling technologies for fibre optic communications in the last 20 years. The technology has been licensed to more than 30 companies worldwide and it — along with software defined radio and audio codecs — bring in about 80% of CRC's licensing revenue. However, that revenue will drop in 2012 when the FPGs patent expires.

CRC has been dealing with a stagnant or declining budget for several years. Between FY09-10 and FY10-11, Industry Canada's contribution to CRC dropped from $39.7 million to $36.2 million, prompting CRC to trim costs by 10% and eliminate about 25 research jobs. These latest cuts are over and above that initial 10% reduction.

To further contain costs over the past year, CRC had scaled back international activities related to standards development and collaborative research. For example, CRC's role as a national ICT contact point for the European Union's FP7 program was transferred to the Department of Foreign Affairs and the research granting councils.

Liberal house leader Dr Marc Garneau, who worked closely with CRC when he was president of the Canadian Space Agency, says the cuts jeopardize Canada's reputation as an international leader in ICT research.

"This is risking losing some very able people and some areas of technology where Canada has worked very hard to build a lot of competence and in some cases is a leader in," he says. "For (the government) to kill that is very ill-advised … We're not against the idea of balancing the budget but you have to do it intelligently."

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