Focus on innovation more important than ever

By Dr David Strangway

The events of four weeks ago make this a year like no other. All of the rules changed in the blink of an eye, making the task of identifying and setting the government’s fiscal priorities more complex and challenging than it has been in generations. Before September 11th, the spotlight was on innovation like never before. In Ottawa and around the country, everybody was talking about it as the major driver of new public policy initiatives. I’d like to suggest that it is an opportune time to turn that spotlight back on.

Canada’s business leaders agree that investment in innovation is an investment in our future. Greater innovation means stronger industry, making Canada a more attractive place for investors. Against a backdrop of concerns about a return to deficit spending, a potentially significant economic downturn and increased fears for personal security, the government will be faced with consideration of options to address these near-term imperatives. However, it will be equally important that government continue its leadership role by continuing to invest in innovation.

To respond to concerns about productivity, competitiveness and the brain drain, the government has promised a White Paper on the subject this fall. Confidence will surely be further eroded if governments detour from policy commitments that can have positive long-term effects on our economy and way of life.

Five years ago, Canada’s investment in R&D was among the lowest of the Organization for Economic Co-operation and Dev-elopment (OECD) nations. But in the past few years, Canada has begun to meet the challenge and our governments now have a more positive story to tell. It’s one of our best-kept national secrets that the federal government and the provinces have made great strides in reversing this alarming trend in R&D. From being an embarrassing 15th among its OECD competitors in amount spent on R&D, Ottawa has made it a priority to bring us up to the top five by 2010. This will require mobilization of all sectors, but there must also be vehicles to accomplish this.

Thanks to the federal government, one of the key instruments is already in place. The Canada Foundation for Innovation (CFI) was launched in 1997 as an independent agency mandated to rebuild and reinvest in research labs, installations and facilities in universities and hospitals across the country.

It’s proving to be very effective. So far the CFI has supported more than 1,400 projects at 100 universities and hospitals. Every one of the projects funded to date (to the tune of over $900 million) has enabled institutions to find matching funding from the provinces and additional monies from the private sector and the universities themselves. The CFI’s 40/60 percent funding formula is both a unique example of intergovernmental co-operation and of agencies addressing priorities defined by those research-performing institutions, which employ Canada’s major pool of researchers.

Another example is the Canada Research Chairs program that will provide 2,000 positions for researchers at Canada’s universities across the country. The federal government will invest $300 million per annum in these chairs. For its part, the CFI will invest $250 million between 2000 and 2005 to provide the chair holders with the world-class research facilities they need to compete globally and train the next generations of Canadian researchers. We have also seen a doubling of the health research budget for the Canadian Institutes for Health Research.

Canada’s research competitiveness depends on four main elements — facilities, and equipment (CFI), researchers (Chairs program), funding the full direct cost of research (increases to granting councils) and the full indirect costs of research (yet to be addressed).

The result of these CFI investments is a rich variety of new projects, employing, attracting and in some cases repatriating Canadian students, researchers and technical staff who can take their knowledge and expertise into industry and into ensuring a better quality of life for Canadians. Our best young people need a reason to stay and provide what, in the end, is the most valuable commodity Canadians can offer — innovation that benefits everyone and improves the quality of our lives.

This article is an abridged version of a presentation made September 26 by Dr David Strangway, President and CEO, Canada Foundation for Innovation ,to the House of Commons Standing Committee on Finance.