NRC budget declining 8% in FY11-12 as realignment shifts funding to new priorities

IRAP hit with staff cuts

National Research Council (NRC) president John McDougall has come out swinging against "unfounded media speculation" of a 20% cut to its FY11-12 budget while acknowledging a year-over-year reduction of $58.1 million or 7.8%. The refutation of media accounts of budget slashing is contained in McDougall's June 16th memo to staff which states that "there have been no new additional cuts to NRC's budget announced by the Government for this year".

The staff memo also noted that the impact of June 2nd federal budget on the NRC is "still to be determined", adding that efforts to reduce NRC's lingering structural deficit has resulted in "some realignment of programs in recent weeks".

Confusion over the NRC's budget status comes amidst a major realignment of its operations and activities to achieve its vision of becoming "the most effective research and technology organization in the world, stimulating sustainable domestic prosperity".

With initial changes now being implemented, however, there are growing anecdotal reports of plummeting morale as the organization continues to examine business cases for programs and confirm its new flagship programs — printable electronics, resilient wheat, bio-composite materials and algae to achieve CO2 reductions (R$, May 2/11).

"There has been an 8% reduction (in the NRC budget) according to the main estimates due to a decline in the grants and contributions budget," says Kathy Trim, DG of NRC's Communications and Corporate Relations Branch.

A major cause of concern appears to be NRC's shifting of 20% of its strategic investments and all of its capital investment decisions "upward" to the senior executive committee (SEC) — a trend that will ultimately see 60% of all funding decisions controlled by the increasingly powerful internal body (R$, March 17/11).

"The institutes will get new money to deliver new programs. We're not shrinking the institute budgets necessarily," says Trim. "We want to create a more flexible and zero-based budgeting regime."

main estimates

Recently released Part III estimates for the NRC indicate that a major decline in spending is being forecast, from a high of $990.7 million in FY10-11 to about $620 million in FY 12-13. The latter amount does not include cluster funding, which is slated to sunset at the end of FY11-12 after being given a two-year, $135-million extension in Budget 2009. According to Trim, NRC will seek clarification this year on whether the cluster funding is to be renewed.

continued cluster funding uncertain

The Main Estimates state that: "The $72M difference in planned spending between FY11-12 and FY12-13 is largely due to the sunsetting of Technology Cluster Initiatives ($66.7M, up for renewal in March 2012) and anticipated savings in collective agreements ($4.1M)."

The Main Estimates further project a decline in overall NRC employment from 3,743 in FY11-12 to 3,375 in FY12-13. Once again, the drop is largely attributed to the sunsetting of the Technology Cluster initiatives.

The controversy over the status of the NRC's budget was fanned further by the revelation last week that 66 staff members with the Industrial Research Assistance Program (IRAP) will lose their jobs, largely through attrition. Widely regarded as one of the most cost-effective programs for assisting companies in product development and market entry, IRAP received $200 million for FY09-10 and FY10-11 through the government economic stimulus program to offset the impact of the financial meltdown of 2008. That funding has now expired and, to the surprise of many observers, has not been extended or made permanent.

Trim says IRAP has been "over programmed" and that the cuts will be spread across the organization from administration, information technology services and the ranks of IRAP's industrial technology assistants (ITAs). She adds that several new IRAP positions are being created with the realignment, lowering the job loss to 52.

Further concern is being expressed over the changing composition of the advisory board attached to each NRC institute. According to one external member, upcoming advisory board meetings have been postponed with current members jettisoned to make way for new members allegedly favoured by McDougall.

Trim says the wholesale changeover of advisory board membership is "speculation", noting that the NRC is examining board composition "as part of the transition to program-based management". She adds that the boards will be revamped and while they will serve the same function as they do now, they won't be as institute-focused, reflecting the NRC's attempted to de-emphasize individual institutes in favour of a cross-cutting, multi-disciplinary approach to technology development and exploitation.

Note: John McDougall declined to be interviewed for this story as he is travelling internationally.

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