Federal Budget proposes a host of modest measures to boost R&D, innovation

Implementation rests with election outcome

The 2011 federal Budget will likely be remembered more for its family-friendly electioneering than is S&T initiatives. The Budget Plan's provisions for R&D and innovation are a scattershot affair with just $216 millionin new research spending and an additional $51 millionfor commercialization and business innovation over the next two years. Now that Canada is in election mode, the Budget will be implemented only if the Conservatives are returned to power.

While some initiatives are welcome — notably up to $100 millionin support of neuroscience research — others are inadequate (climate and atmospheric research) or somewhat baffling. Government departments and agencies such as the granting councils are not commenting on the Budget.

From the Budget Plan's title — The Next Phase of Canada's Economic Action Plan: A Low-Tax Plan for Jobs and Growth — to the indiscriminate use of the term "low-tax" (66 times in the Budget Plan and 13 times in Finance minister Jim Flaherty's Budget Speech), many measures are strategically designed to attract niche geographic and demographic voting groups.

The Waterloo ON-based Perimeter Institute for Theoretical Physics is a case in point. The Budget commits $50 millionover five years although current federal support doesn't expire until March 31, 2012. Gary Goodyear, minister of state for science and technology, highlighted the investment the day after the Budget in an address to the Greater Kitchener-Waterloo Chamber of Commerce, stating that "One of the most significant science and technology investments of Budget 2011 is aimed directly at southern Ontario and specifically at Kitchener-Waterloo". Kitchener-Waterloo Conservative MP Peter Braid won the riding in 2008 by just 17 votes.

Electioneering also appears to be driving an initiative in the Thunder Bay region where the New Democratic Party holds both seats. Budget 2011 provides $4 millionover three years to the Thunder Bay Regional Research Institute to support construction of a cyclotron for the production of medical isotopes. Last year, Natural Resources Canada provided $31 millionin funding through its Non-reactor-based Isotope Supply Contribution Program (NISP) to four existing cyclotron and linear accelerator facilities to produce medical isotopes. Thunder Bay was not selected through that process and no explanation or context was given as to why it is now being funded.

In Quebec City, the government renewed its support of the National Optics Institute with $45 millionover five years. The funding was included in the Budget although the announcement was made 11 days previously and the money comes from existing resources of the Canada Economic Development for Quebec Regions, the regional development agency for the province.

NEUROSCIENCE RESEARCH A BIG WINNER

The big S&T winner in the Budget is a commitment of up to $100 millionto establish the Canada Brain Research Fund. The funding will match donations to a private foundation — Brain Canada (formerly NeuroScience Canada) — in conjunction with Neurological Health Charities Canada and the Canadian Association of Neuroscience. The public-private partnership supports a philanthropic model that is intended to secure donations from wealthy individuals, organizations and ordinary Canadians to establish multidisciplinary, multi-institutional teams to address the brain as a single, complex system rather than a collection of distinct diseases.

"I am absolutely confident we can raise enough to secure the full $100 million," says Inez Jabalpurwala, Brain Canada's president and secretary-treasurer. "This will benefit the whole field of brain research."

MEASURES TO SUPPORT DIGITAL ECONOMY STRATEGY

The government's forthcoming Digital Economy Strategy (DES) also figured prominently in the Budget with $100 milliona year over at least the next two years for the Canada Media Fund. The money will be used to "invest in the creation of convergent digital content across multiple platforms" and. When combined with funding from cable and satellite distributors the fund will have $350 millionin FY11-12. A further $60 millionover three years will go to "promote enrollment in key disciplines related to the digital economy such as science, technology, engineering and mathematics. Human Resources and Skills Development Canada will provide the money through a reallocation of funding. The DES is scheduled for release this Spring but will likely be delayed until the fall.

Even the National Research Council's Industrial Research Assistance Program (IRAP) is being tied to the DES with $80 millionover three years to support collaborative projects between small firms and colleges aimed at accelerating adoption of information and communications technologies. IRAP's base budget remains unchanged.

AECL FUNDING EXTENDED

Outside of the Budget's classification of research, commercialization and innovation are several key S&T funding initiatives. The beleaguered Atomic Energy of Canada Ltd receives $405 million"on a cash basis" for FY11-12 to support operations and cover "anticipated commercial losses". The sale of the agency's CANDU reactor business is stalled and no decision has been made on how or whether to replace its aging NRU reactor in Chalk River ON.

GRANTING COUNCILS

Funding for the three granting councils inched up with $37 millionin new base funding. The Natural Sciences and Engineering Research Council (NSERC) and the Canadian Institutes of Health Research (CIHR) each received a $15-millionboost — an increase which doesn't cover inflation — while the Social Sciences and Humanities Research Council (SSHRC) saw its base budget boosted $7 million, representing "a higher share for social sciences and humanities research, compared to previous budgets". The Indirect Costs Program received an additional $10 million, which doesn't change its percentage of direct costs and remains far below the 40% target advocated by the Association of Universities and Colleges of Canada.

The granting council funding appears to be somewhat targeted: NSERC's increase will go towards areas such as its Strategy for Partnerships and Innovation program. CIHR's new funding is being directed to its Strategy on Patient-Oriented Research, while SSHRC's new money will target several areas, including the digital economy.

COLLEGES DO WELL

NSERC will receive college-related funding in two envelopes. The Budget provides $3 millionin FY11-12 and $5 millioneach year thereafter to create 30 Industrial Research Chairs for colleges in areas "where there is an important industrial need". A further $12 millionover five years is being added to NSERC's Idea to Innovation program to support joint college-university R&D projects "with promising commercial potential".

CLIMATE & ATMOSPHERIC RESEARCH

NSERC will also receive $35 millionover five years to support climate change and atmospheric research. The funding effectively supplants more generous support previously provided to researchers through the Canadian Foundation for Climate and Atmospheric Sciences.

"It's inadequate. It's less than half of what we think is necessary and asked for in our business case to the minister of the Environment. We proposed $75 millionover five years which is $15 millionannually and what we were delivering in recent years," says CFCAS president Dawn Conway. "We feel very strongly that weather and climate research is tied to the growth and success of the Canadian economy."

CFCAS received $110 millionin endowment funding in two tranches in 2002 and 2003, which generated approximately $20 millionin interest and leveraged $158 millionin cash and in-kind from partners. The mandate for the CFCAS was extended for one year last year (with no new money) and now expires March 31/12.

"Future money did not have to be channeled through us (CFCAS) … I'm very supportive of NSERC but they need more money for this (area of research)," says Conway. "I would expect to get together with NSERC as part of normal business practice on how to support this research community."

NEW CERC FUNDING

The Budget commits an additional $53.5 millionover seven years to create another 10 chairs for the Canada Excellence Research Chairs program, some of which will relate to the digital economy. Each chair receives $10 millionover seven years and is intended to attract world class talent from other countries. CERC has previously awarded funding to create 19 chairs with funding contained in the 2008 Budget (R$, May 21/10).

The Budget also provides $65 millionto Genome Canada to allow it to stage a competition targeting human health and to cover operating costs for the next three years for the Ottawa-based agency and its affiliated genome Centres. Genome Canada received $75 millionin the 2010 Budget which allowed for a targeted competition and a year's worth of operating funds. The arm's length agency is currently developing a new strategic plan

The Budget provides Sustainable Development Technology Canada an additional $40 millionover two years to boost its SD Tech Fund for supporting development, demonstration and technology projects in the area of clean energy. In Budget 2007, SDTC received $500 millionwhich was intended to carry their operations forward until FY13-14 (R$, March 26/07).

S&T SUPPORT FOR NATURAL RESOURCES

Two science-based departments received new investments. Natural Resources Canada received $97 millionover two years to renew funding for clean energy and energy efficiency technology and innovation initiatives. The funding will flow through NRCan's energy sector to its Eco Energy Technology program. The majority of previous funding through this program has gone to coal- and oil sands-related projects (R$, April 16/08).

NRCan is also receiving $60 millionto enhance forestry innovation with $60 millionin FY11-12. It will flow the funding to FP Innovations which administers its Transformative Technology Program to support emerging and breakthrough technologies and expand markets through the Value to Wood program.

Agriculture and Agri-Food Canada receives $50 millionover two years "to support knowledge creation and transfer and increased commercialization of agricultural innovations".

GREATER TIES WITH INDIA

Greater engagement with India was the focus of two Budget initiatives. The first is a targeted India Engagement Strategy designed to develop closer ties across several sectors. Initiatives will include the promotion of business innovation, stronger academic networks and promotion of Canadian universities. The strategy will leverage previous work and investments made by the Global Commerce Strategy and the International Science and Technology Partnerships Program, both of which are managed by the Department of Foreign Affairs and International Trade. To that end, $12 millionover five years will be provided to establish a Canada-India Research Centre of Excellence. Open to proposals in all areas of research, it will focus on creating collaborative partnerships between all relevant players and organizations.

The Budget also calls for an international education strategy to promote Canada as a destination for study and research. The strategy will be funded with $10 millionover two years and directed by an advisory panel reporting to the ministers of Finance and International Trade.

On the policy side, the Budget announced a review of the government's aerospace policy and programs in consultation with the Aerospace Industries Association of Canada. It will be coordinated with the ongoing Review of Federal Support for Research and Development.

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