Conspiracy theories are rife surrounding the spectacular failure of the National Research Council to secure new funding in the Budget. Whether any withstand the scrutiny of time is a matter of speculation, but the NRC's sorry fiscal state of affairs is beyond question. The same message has been carried to government twice in the last two years: the NRC must receive an increase to its base funding in order to play its undeniable role as a key agent of innovation. The response both times was official silence, made somewhat murky by assurances from senior bureaucrats that some form of relief - $20 million for a Montreal-based aerospace institute and resources for cluster development in Atlantic Canada - would be quietly made available in the coming days or weeks.

In the days following the Budget announcement, REEARCH MONEY spoke with several individuals in and outside of government seeking an explanation for Ottawa's apparent refusal to grant the NRC a badly needed increase in base funding, financing for its well-publicized strategic initiatives, and resources for strategic cluster development. Each response was different, but they to fall into several distinct categories. The NRC is a casualty of:

* a Budget that foregrounded tax reduction over more government spending.

* political indifference to an aging institution that, despite recasting itself as a key player in the innovation system, has simply fallen out of favour;

* the Human Resources Development Canada jobs grant scandal;

* a break with the Liberal tradition of announcing funding initiatives within the Budget envelope; or,

* a Budget approval process that favours proposals armed with influential backers and supporters.

Whatever the explanation, the silence surrounding the NRC's proposals has been greeted with shock in the S&T community, none more than the NRC itself, which had already begun developing projects and relationships with potential partners that depended upon increased funding.

Dr Arthur Carty, who attended a Budget lock-up before the official announcement was made, is at a loss as to why the NRC came up dry after receiving encouraging words in the preceding months. "I saw the full extent of the money being doled out - which is quite considerable - then I realized the NRC didn't even figure," Carty told RE$EARCH MONEY in his first post-Budget interview. "I really don't have any understanding of what's going on. I thought this would have been an opportunity to invest in innovation and invest in the future. This gives us a real problem with some of our initiatives"

Industry minister John Manley has said there's still hope for near-term relief, but there are no specifics. Dr Gilbert Normand, secretary of state for science, research and development, can only offer vague assurances that the NRC will be considered in future Budgets and is noncommital on its chances before next year. "I don't know. I'm not Paul Martin," he says. "It's an issue for us and we want it to be a priority too. We want to commercialize our discoveries and we will take the means to do that."

Without a hike to base funding, the NRC is faced with fundamental problems such as finding the cash to pay for heating its physical plant in the midst of soaring energy prices, and phasing out research programs or even whole institutes. Initiatives such as its National Fuel Cell Research and Innovation Initiative and proposed institutes in Alberta and Atlantic Canada are now in limbo. Even if the $20 million increase for a Montreal aerospace institute and cluster development in Atlantic Canada is approved, the money is targeted and won't solve the NRC's increasingly desperate challenge to maintain its output of basic targeted research across its constellation of institutes. The same goes for the NRC's share of funding initiatives that were approved - $160 million for Genome Canada, $200 million annually to refurbish federal laboratories, and $100 million for a Sustainable Development Technology Fund.

"Anything more than half of what we asked for would have been helpful, but we didn't expect to have nothing in our hands," says Carty "The dust hasn't settled yet and there may be news later on, but the impact on morale around here has been considerable."

R$