Ontario Budget

The Ontario government is committing nearly $800 million to keep the province’s innovation engines primed in a Budget that demonstrates the extent to which the mantra of science and technology has successfully penetrated the halls of Queen’s Park. The focus on post-secondary research as well as commercialization and linkages to industry indicate that Ontario’s innovation strategy and advisory bodies are beginning to have a strong impact on policy.

The bulk of new funding is devoted to existing programs, but the amounts are substantial and reflect the importance being placed on innovation at a time when recently elected premier Ernie Eves is struggling to maintain a balanced Budget. The Ontario R&D Challenge Fund (CF) and Ontario Innovation Trust (OIT) were re-financed to the tune of $250 million and $300 million respectively, while the Ontario Centres of Excellence (OCE) received a new mandate and funding of $161 million over five years.

The Budget speech by Finance minister Janet Ecker also highlighted $51 million for various aspects of biotechnology, although the actual announcement was made June 7, prior to the opening of the Bio2002 International Biotechnology Convention and Exhibition.

Indirect university research costs were given a modest boost via the Research Performance Fund, which was increased $2 million to $32 million annually. Ontario was the first province to establish a fund solely dedicated to indirect costs relating to provincially funded research. The federal government allocated $200 million last year and is expected to announce a permanent program.

New funding was also directed towards the Perimeter Institute for Theoretical Physics, just days after the Waterloo-based organization received $5.95 million from the CF and $5.6 million from the OIT. The Budget commitment of $5 million annually for the next three years brings the provincial package of support to $26.55 million (see page 7).

Details and conditions attached to the new innovation-related funding are apparently still being formulated and will be the subject of future announcements by Jim Flaherty, minister of the recently created Ministry of Enterprise, Opportunity and Innovation.

The new financing of the CF, OIT and OCE were widely anticipated, as all three organizations were running dangerously low on funds or were approaching the end of their current mandates. The CF has committed nearly all of the $500 million it has received to date and much faster than originally anticipated. Formed in 1998 and funded for a 10-year period, the CF has been met with extremely high demand, depleting its resources in just half that time even though it has decreased its share of approved projects from 33% to 22%.

The OIT’s primary function is to provide matching funds for awards made by the Canada Foundation for Innovation (CFI) to Ontario-based institutions. A major cash injection was required to match awards made in the most recent competition. In that round, Ontario institutions won nearly 180 million in CFI funding (R$, February 11/02).

The OCE has been lobbying the government for more than a year to renew its mandate and increase funding. It’s widely expected that the Budget’s five-year funding renewal will come with a new governance structure and an increased emphasis on commercialization. Geoff Clarke, president of Materials and Manufacturing Ontario and chair of the OCE Council of Presidents, says details of the new funding will be the subject of further discussions with government officials.

“This is a renewal in terms of a policy decision. The details have to be worked through and that will include governance,” says Clarke. “There’s been an evolution towards an increasing emphasis on commercialization, collaborative research and international collaboration, and I expect that will continue.”

The most likely scenario will be a consolidation of governance at a level above the centres through a body comprised of representatives from all OCE stakeholders. Clarke says the renewal will allow the OCE’s four centres to grow and implement new relationships with industry and academia.

“The Budget shows that the new ministry (MEOI) has recognized the important role S&T and the OCE program play in innovation,” he says. “It’s a very important recognition in terms of industrial production and economic development.”

SHIFT TO THE CENTRE

The emphasis on innovation is part of a Budget that signals a significant shift to the centre for the Conservative government, which is trailing the Liberal opposition according to recent polls. Planned corporate and personal tax reductions have been put on hold for at least one year, and new funding is being pumped into education, health care and the various aspects of the environment.

In the area of life sciences, the Budget’s allocation of $20 million towards the MARS Discovery District project also reflects the government’s recognition of its role in building capacity in areas considered key to future growth and prosperity. MARS is a private sector-driven, multi-purpose complex of laboratories and office space located adjacent to the Univ of Toronto. The project has been seeking government support for its research and incubator components. Ecker says the $30 million investment could lead to $300 million being invested in the project, which has yet to begin construction.

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