$88 million flowing to granting councils

By Debbie Lawes

Some $7 billion in federal spending – including over $1.4 billion for science-based departments and agencies (SBDAs) – is in limbo pending a Treasury Board review that could see some money released by December 22. The non-confidence vote that brought down the minority Liberal government on November 29 left several bills on the Order Paper, including $13.5 billion in supplementary estimates not contained in the original 2005-06 Budget estimates.

About $6.5 billion of that amount is for statutory spending, including Old Age Security payments, and is being funded. It’s the non-statutory items that have many in Canada’s science community growing anxious.

Projects in limbo include $24.8 million for the TRIUMF particle physics laboratory at the Univ of British Columbia, $20.4 million for Atlantic Canada Technology Clusters, $16.6 million for genomics R&D, $9 million for the International Development Research Centre, $8.7 million for the Canadian Biotechnology Strategy and $3 million for a new photonics lab at the Communications Research Centre in Ottawa. The Estimates also included more than $51 million for science-based projects cutting across departments and agencies (see box).

The funding crunch has left many bureaucrats scrambling to take advantage of a little-used mechanism for getting access to public money when there is no Parliament to approve it.

“Departments and agencies can fund continuing programming in two different ways,” explains Treasury Board spokesperson Robert Makichuk. “They can cash manage by reallocating from lower to higher priorities within their current budgets. The other option is the special warrant process,” financed through the Consolidated Revenue Fund.

Governor General special warrants are to be used sparingly during election periods, and only for spending that is “urgently required for the public good”, including ongoing programs and meeting contractual obligations. Treasury Board, department ministers and the federal cabinet decide what initiatives fit those definitions. Special warrants cannot be used to increase or establish new grants, delete debts or create new programs.

Departments and agencies have three opportunities throughout the election period to apply for special warrants, with the first funding expected to flow by December 22. The National Research Council, which has $81.5 million tied up in the Supplementary Estimates, hopes to have most of its money released by this date.

The NRC had until December 7 to file paperwork with Treasury Board demonstrating that “we have immediate cash requirements that are essential to the normal operations of government programs,” says Pamela Young-Carriere, NRC’s senior financial officer. “All the items we’ve identified in the supps are essential to us …. Most also fall under contractual obligations, which would be eligible for funding under the special warrants.” However, she cautions that “there’s no guarantee that it will be approved.”

The NRC’s budget items include TRIUMF ($24.8 million), Atlantic Canada Technology Clusters ($20.4 million), the Industrial Research Assistance Program ($4.8 million) and a budget carry forward from the previous fiscal year ($17.4 million).

The single largest research expenditure in the Supplementary Estimates is $140 million for Technology Partnerships Canada (TPC) – money earmarked for General Motors’ $2.5-billion Beacon Project (R$, March 9/05). The project includes major R&D and skills training components and establishes a Canadian Automotive Innovation Network of universities and research institutes.

A TPC spokesperson says it may not need the money until after a new Parliament is in place. “The decision still hasn’t been made as to whether we will be seeking these funds through a potential warrant,” Bruce Stuart said on Tuesday. “We still have not received a claim from (GM), so it’s not a matter of us needing to start to flow the money today.”

The supplementary estimates could be re-tabled in early February, if a new government is in place by then. Monies would have to be spent by March 31, 2006.

GRANTING COUNCILS GET EARLY APPROVAL

The good news came December 1 for the three research granting councils which, between them, had more than $98 million locked up in the supplementary estimates.

Since special warrants cannot be used to fund grants, the research councils needed another mechanism. The solution was found at Treasury Board, which had more than $580 million in its “Vote 5” reserves to cover the shortfall. Through this reserve, the Canadian Institutes of Health Research (CIHR) receives $34.3 million, Science and Engineering Research Canada (NSERC) $31.4 million and the Social Sciences and Humanities Research Council (SSHRC) $25.6 million (includes funding for the indirect costs of university research). NSERC’s funding includes $1 million for the Canadian Light Source synchrotron in Saskatchewan.

“Luckily, Treasury Board still has a large balance in the Vote 5 reserve that had been approved as part of the initial main estimates for fiscal year 05-06. They can let us use some of that money to cover the grants that we’re short of,” says Germain Tremblay, director of finance for NSERC and SSHRC.

CIHR says the Vote 5 funding means there will be no delays in releasing payments for research grants. “We got our phone call from Treasury Board last Thursday saying that the submission was approved by Treasury Board ministers,” says John Klimczak, director of finance at CIHR. “We’re just making sure all the paperwork is in place. It won’t hold up any of our payments though, so for us, it’s business as usual.”

The remaining budget shortfall is for operational funding, which the councils will apply for through special warrants: CIHR ($3.4 million), NSERC ($3 million), and SSHRC ($2 million). The use of Vote 5 for new grants and increases to existing grants has been an accepted practice for decades, although the Auditor General cautioned in her 2002 report against using this mechanism to fund new initiatives. Treasury Board president Reg Alock has tabled proposed changes to Vote 5 which would take effect in next year’s supplementary estimates.

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