Editorial - 24-1

The buzz surrounding the prospects for S&T in the March 4th federal Budget is not good. Despite clearly defined gaps in our innovation system and the expiry of funding for a number of key programs and facilities, the ability of the Conservative government to respond in an effective and forceful manner is severely circumscribed.

In meeting with government officials, representatives of research organizations and industry associations are being told to scale back or even withdraw requests, or revamps their pitches to emphasize return on investment. Requests to establish new programs are simply off the table.

How did it get to this point, just two years after an unprecedented series of annual Budget surpluses that stoked a remarkable expansion of the Canadian research enterprise? The impact of the economic crisis and recession is certainly a major factor. Less revenue from taxation and other sources means a limited ability to respond to new funding requests.

Perhaps most crippling has been the government's decision to lower taxes and keep them low come hell or high water. Particularly damaging was the two-point reduction to the GST, despite near unanimous advice asserting that lowering consumption taxes have no positive affect on productivity. The result is a Finance department drowning in red ink — $53 billion in this FY alone.

Budget 2010 is the most important in nearly a generation and the pressure is on to see whether this government can come up with a series of creative compromises that don't send the nation tumbling down the global economic ladder.