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Is Canada’s Innovation Budget ambitious enough?

Mark Henderson
March 29, 2017

Opinion is decidedly split on the federal government’s delivery of its promised innovation Budget. The March 22 budgetary planning document contains a wide range of measures related to skills, company financing, program consolidation and clean technology. At the same time, many other initiatives have been deferred or targeted for further review while the amount of new money devoted to innovation is surprisingly modest.

Perhaps most tellingly, the government’s pledge in Budget 2016 to “redesign and redefine how it supports innovation and growth” remains a work in progress, with a promised Innovation Agenda (now retitled an Innovation and Skills Plan) and report on federal support for fundamental science yet to see the light of day.

One analyst has noted that of the top 20 Budget expenditures, only two were innovation focused.

“There’s not much beef in the hamburger,” noted the analyst, adding that the Budget was “stunningly opaque” in its explanation of the Ottawa plans to approach the huge policy challenge represented by a whole-of-government innovation policy.

The Budget did contain evidence that work on the Innovation Agenda has begun with three new mechanisms designed to coordinate and consolidate federal support:

  • an Innovation Canada platform led by Innovation, Science and Economic Development Canada to coordinate and simplify the support available to Canada’s innovators;
  • a Strategic Innovation Fund that consolidates the Strategic Aerospace and Defence Initiative, Technology Demonstration Program, Automotive Innovation Fund and Automotive Supplier Innovation Program; and,
  • an Impact Canada Fund that introduces a new mission- or “challenge”-based approach to accelerate development of clean technologies and digital technologies for use by “smart cities”.

Nearly $60 million in new funding for the National Research Council will be used to support a range of activities while the government launches a review to determine how the NRC best fits into the new Innovation and Skills Plan.

The $800 million for network and cluster funding announced in Budget 2016 re-emerged with a $150-million top-up and a competition this year to support a small number of “superclusters” in areas deemed priority fields such as advanced manufacturing, agri-food, clean technology, digital technology, health/bio-sciences and clean resources, as well as infrastructure and transportation.

Fundamental science

The near total absence of new funding for the granting councils, Canada Foundation for Innovation and Genome Canada has been a major point of contention although new money may flow once the government decides how to respond to the fundamental science report from a panel led by former Univ of Toronto president Dr David Naylor.

Science minister Kirsty Duncan defends the Budget’s science and innovation initiatives pointing to more than a dozen new investments. She notes that the granting councils received a major boost in last year’s Budget which is permanent.

“It’s a good budget whether it’s for science on campus or colleges and government science,” says Duncan. “(Science funding) is pervasive throughout the Budget.”

Universities Canada president Paul Davidson is also optimistic with the Budget’s initial investment in skills and innovation but agrees that the lack of measures bolstering fundamental research is an important area of the innovation ecosystem that remains unaddressed.

“Canada needs a fundamental re-think of science and that’s where the Naylor report comes in. It’s the most comprehensive review (of fundamental science) in decades but it was only completed two months ago and the federal government cannot absorb advice that quickly,” says Davidson. “It will have precise recommendations and will be very grounded in evidence … We still need to convince the prime minister, Finance (Canada) and the public that these investments are worth making. I would love to have received transformative investments in this area but no one did in this Budget.”

The bulk of the Budget’s innovation-related investments are supported through reallocation of existing funds – many aimed at diversifying the knowledge-based economy. These include initiatives in support of clean tech – a government priority that originated when the Liberal Party was still in opposition. As one observer notes, “clean tech dominates the Budget and swamps the Innovation Agenda”.

Artificial intelligence

Davidson points to the Budget’s $125 million in artificial intelligence (AI) as the kind of coordinated, transformative investment in research that he hopes will be stimulated by the Naylor report’s recommendations.

“We need mechanisms where collaboration is rewarded and incented,” he says.

The Budget’s AI investment is being made through the Canadian Institute for Advanced Research (CIFAR), which brought the three Canadian AI centres together to pitch the concept to Ottawa. That investment will be augmented by $50 million from the Ontario government and $100 million announced in yesterday’s Quebec Budget of $100 million to establish an AI “supercluster”. The Quebec funding builds on a $93.6-million award from the Canada First Research Excellence Fund to establish an Institute for Data Valorisation at Campus Montreal – a joint initiative by the Univ of Montreal, HEC Montreal and Polytechnique Montreal. Details on the third hub of Canada’s emerging AI supercluster – Edmonton – are pending.

Ontario's AI cluster will be focused through the recently formed Vector Institute, spearheaded by Ed Clark, former CEO of the Toronto-Dominion Bank.

“Canada’s AI lead that started at CIFAR is being challenged as the rest of the world moves ahead. We can’t let this slip away again,” says CIFAR president and CEO, Dr Alan Bernstein. (Finance minister Bill) Morneau mentioned six areas for clusters (and) each one depends critically on AI. It’s an essential cross-cutting platform for whatever Canada wants to do.”

Bernstein says that if all participants contribute $500 million to PAN-Canadian AI development, Canada can once again become globally competitive. He points to deep learning as an emerging field that was pioneered with CIFAR funding and support through its Learning in Machines & Brains research program and support for Dr Geoffrey Hinton, Dr Yoshua Bengio and others who are central to the initiative. But he stressed that money must also be accompanied by an insistence on excellence and training the next generation that includes the freedom of AI scientists to engage in blue sky research.

“We will be very fussy about the quality of the researchers,” says Bernstein. “Number one, if you want great innovation, you need great science and the poster child for this is artificial intelligence … Governments and their agencies can take the risk to do things like AI. Companies can’t do this alone anymore.”

Government science

Government science — the often ignored pillar of the innovation ecosystem — received more attention in this Budget than it has seen in years. In addition to announcing $2 million in annual funding to establish a secretariat for the forthcoming Chief Science Advisor, the Budget announced the development of a new federal science infrastructure strategy that will serve as a roadmap for future investments and include “a review of existing investments in federal science infrastructure, including federal laboratories and testing facilities”.

The Budget pumps more than $600 million into various aspects of government science with the primary beneficiaries being Natural Resources Canada, Agriculture and Agri-Food Canada and Environment and Climate Change Canada.

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