Government treatment of S&T proposals raises spectre of shadow science budget

The contents of the federal Budget pose a challenge for those seeking to comprehend the rationale behind the seemingly scattershot response to the basket of science and technology proposals seeking a piece of the growing federal surplus. Much attention has been lavished on the big ticket items - $900 million for a second phase of the Canada Foundation for Innovation (CFI), $900 million over five years to create 2,000 Canada Research Chairs and $160 million for Genome Canada. But the silence surrounding the most glaring omissions is deafening, angering many who contend that government's attempts to build a competitive innovation system has veered off course. Others contend that the Liberals are simply breaking with the relatively short tradition of funding new or existing initiatives purely through the Budget process

Whatever the reasons, the majority of proposals involving big science, business assistance, strategic initiatives or increases to the funding base of research agencies and federal departments were notable by their absence. The National Research Council's failure to obtain new A-base funding or money for any of its strategic initiatives within the Budget envelope is the most glaring and bizarre example (see page 7), but it's not alone. Speculation on their treatment has produced several explanations, but increasingly insiders are pointing to the persistent scandal surrounding Human Resources Development Canada (HRDC) as the source of the apparent about-face on proposals considered virtual shoe-ins for funding. The argument being made is that the Liberals decided to shelve or defer any proposals that may leave them open to charges of poorly managed spending. Only in cases where the need most deemed to be most severe was any action taken.

The argument lends credence to the quiet, post-Budget award of $10 million a year for the cash-strapped Social Sciences and Humanities Research Council (SSRHC), and the $200-million, five-year funding package for TRIUMF, which has yet to be officially announced. There are even suggestions that the NRC will be discreetly provided cash to pursue some of the initiatives it has planned, and perhaps receive a modest ramp-up to their operating budget without so much as an announcement. Talk of a shadow science budget is making the rounds, which once again begs the question about government strategy and intentions versus reaction to current political pressures.

SSHRC president Dr Marc Renaud is one who gives some currency to the HRDC factor in the Budget. The funding SSHRC was told it will receive is only a fraction of the $40-million increase it was seeking for its base allocation. Renaud argues the SSHRC budget should be doubled over the next three years to allow the social sciences and humanities to fully participate in, and contribute to, the knowledge-based economy. Government failure to buy into the argument means those research disciplines will remain in the shadow of the medical and natural sciences.

"The humanities are not appreciated," says Renaud. We're an easy target for the Reform Party, particularly with the climate of HRDC and government grants in general."

Renaud was informed that SSHRC would be receiving a modest increase to the council's base budget several hours after the budget was tabled, raising questions over the nature and timing of the decision. The same curious treatment was afforded the $200-million, five-year award to TRIUMF to implement the next phase of its high-energy, sub-atomic physics research. The funding avoids a repeat of the TRIUMF's last-minute rescue in 1995 (R$, December 2/98), but only by a few weeks since funding was slated to run out March 31.

""We have many questions," says Dr Jean-Michel Poutissou, TRIUMF's associate director. "The only official confirmation we have received is a letter from (NRC president) Arthur Carty, which said that we will receive $200 million over five years, which is a 20% increase over our previous funding level."

The Budget was far more successful in the area of education and research, with the welcome news that the CFI will be extended for several more years (see page 4). Combined with funding for the research chairs (see page 6), the Liberals delivered a strong message for research excellence aimed at stemming the southward flow of skilled personnel. The research chairs also take into account the need to pay for overhead costs - the first time a federal program has taken such a step.

Behind the Budget's rhetoric of innovation, education and health care, the Liberal administration is clearly intent on sending the message to all Canadians that lower taxes is a strong priority. Many of the tax reduction measures have been embraced by the high technology sector, in particular the reduction of capital gains tax and changes to the treatment of stock options. But the bulk of the substantial federal surplus was firmly directed at the middle class and the Liberal's prospects in the next election.

It's worth noting that the largest sums awarded to S&T in the Budget all go to arm's length organizations or endowments, making it far easier to sidestep accusations of political meddling or mismanagement. Organizations like CFI, Genome Canada and the Canada Research Chairs operate independently, governed by boards and advisory committees, giving the research community a greater say in how the money will be spent. In each case, research excellence is the determining factor in funding success.

In addition, these types of structures also permit a politically palatable way to spend year-end surpluses without committing to long-term funding. Like Alberta, Ottawa evidently sees organizations like the CFI as an attractive way to soak up budgetary surpluses since the government started balancing its books two years ago.

"We're a good window to put one-time money," says CFI president Dr David Strangway. "All of our funding has come out of year-end money which doesn't have recurring base needs. The CFI is a big program with a lot of political disability so a minister can stand up and point out that the CFI is arm's length and makes awards based on excellence. It's a way of funding things based on fiscal surpluses."

Where such a rationale leaves Canada's drive to become a meaningful player in the global, knowledge-based economy is becoming an increasingly popular topic of debate in the S&T community. While some see the indelible stamp of certain senior advisors to government, others fear that the Liberal administration is straying from the innovation path it clearly laid out in the 1996 S&T Strategy and in Securing Our Future Together, the Liberal's 1997 election platform document.

"It's clear from the Budget that there is no strategy on S&T," contends Dr John de la Mothe, a professor of S&T policy at the Univ of Ottawa. "It seems we've lost it and the government is cozying up to the Reform Party and listening to the corporate world. In other words, it's politics as usual."

Dr Gilbert Normand, secretary of state for science, research and development, says the Budget initiatives should be examined within the context of the last several budgets. He also defends the use of endowments and arm's-length organizations as a method of developing Canada's innovation system, arguing that it allows government to manage the activities of councils and foundations collectively while avoiding costly duplication.

"The message is clear. We want to continue (funding S&T) and next year we will have some new money, I'm sure," he says. "I think this is a very good budget. We must explain to the population that research and science are the basis of all of our economic life. It's like a flower and they are the seeds."

R$

Selected S&T Budget Initiatives

($ millions)

* Not included in Feb 28 Budget documents

** Foundation to be created by the Canadian Meteorlogical and Oceanographic Society