NSERC rejects CMC Microsystems proposal for continued funding support

Exploring alternative sources

An historic funding agreement between CMC Microsystems and the Natural Sciences and Engineering Research Council (NSERC) is coming to an end after 30 years. The granting council turned down CMC's latest request for $57 million over five-years to support its National Design Network (NDN), instead providing progressively declining funds over the next three years. In its ruling, NSERC stated it "no longer supports large infrastructure grants" and directed CMC to "explore other funding sources".

As a transition measure, NSERC will award CMC $8 million in 2016-17, $4 million in 2017-18 and $2 million in 2018-19. The sunsetting envelope is ostensibly to allow the non-profit corporation time to identify and secure alternative funding sources, although the exact nature of those sources is unclear.

The decision comes despite a favourable ruling from a committee of external experts that recommended CMC be re-funded at existing levels ($40 million over five years).

"I'm disappointed. We believe it was a fundable proposal and I think NSERC agreed with that," says Dr Ian McWalter, CMC's president and CEO. "Our number one priority has always been the professors and graduate students and NSERC funding was sufficient to support that."

For its part, NSERC says the decision reflects changes in the way it supports university-based research, as well as a dramatically different ecosystem from the days when it faithfully renewed CMC support.

"The external committee made a favourable recommendation but it doesn't take into account the same factors that NSERC does … Senior management made the decision that we no longer support projects of this scale outside of a competitive framework. We have a flexible, peer-reviewed program portfolio," says Dr Bettina Hamelin, NSERC's VP research partnerships. "This is a large grant that NSERC has supported for 30 years — about $200 million over the years. It's the single largest grant in our portfolio."

While Hamelin acknowledges that CMC was "a special case", she asserted that NSERC's ongoing support was "not sustainable" and suggested that it explore funding opportunities with the Canada Foundation for Innovation (CFI), the Business-Led Networks of Centres of Excellence (BL-NCE) or the Centres of Excellence for Commercialization and Research (CECR).

In the wake of the NSERC decision, McWalter has been meeting with officials at the CFI, the department of Innovation (CFI), Science and Economic Development (ISED), the National Research Council and other organizations to explore potential new avenues of funding. He acknowledges that CMC and the NDN may have to change the nature of its offerings to conform to differing requirements imposed by a new funding body but adds that the BL-NCE and CECR programs are inappropriate.

"They are not at all our model. They are completely sectoral and take away all the discovery aspects. They are also later stage and relatively small amounts of money," says McWalter, adding that CFI — a major funder of CMC infrastructure and equipment — doesn't provide much "people funding". "With Industry Canada (ISED), there are opportunities for advanced manufacturing. "If we could get authority to support SMEs (small- and medium-sized enterprises) that would be of huge benefit."

Hamelin says that despite its favourable recommendation, the external review panel it did cite alleged shortcomings in CMC's past performance in the areas of external partnerships and industry funding.

"CMC has not pursued (industry support) as aggressively as we had hoped," says Hamelin. "They did not come close to what one would expect."

McWalter says CMC has relationships with nearly every province in the country as well as multiple agreements with organizations across Canada and 15 other countries.

"As for the argument that industry should fund this type of work, there's a misunderstanding of what CMC is and how things work here," says McWalter. "You can't get industry to fund general research and (CMC-affiliated) professors receive $25 million in support from industry. We don't want to compete with that."

He notes that CMC created a business-focused subsidiary in 2011 using "unrestricted net assets". DMT Microsystems offers commercialization services aimed at maintaining and enhancing manufacturing expertise in Canada (R$, December 9/11).

In explaining the NSERC decision, Hamelin raises the issue of fairnesss, arguing that NSERC's support of one sector (microelectronics) and not others could be seen as discriminatory.

"It's sector specific and many others are deserving," she says.

McWalter counters by noting that CMC supports advanced microelectronic research, design and prototyping with applications in many sectors ranging from telecommunications and electronics to healthcare, energy, environment, transportation and aerospace. Much of what CMC supports underpins advanced manufacturing technologies, which McWalter says is an area of research and innovation Canada can't afford not to be part of (R$, August 27/13).

Strong pipeline of HQP into industry

Perhaps CMC's most potent argument for continued NSERC support is its training of graduate students, post docs and research staff at university-based micro- and nanoelectronics facilities across Canada. Many of these skilled personnel find their way into industry, with lesser numbers entering careers in academia and government. CMC data show that between 2010 and 2014, 2,689 CMC-training personnel found work in industry, compared to 494 who moved into academia and 110 to government. McWalter asserts that CMC-trained researchers and engineers are integral to competing in a highly competitive global environment.

"There are 2,500 graduate and post doc students that have gone into Canadian industry that have CMC-based knowledge and hands-on experience at a commercial level," he says. "Value chains are now global so we need fundamental innovation in the base technologies that drive technology. That's the micro-nano stuff."

One observer of the Canadian microelectronics sector says the failure of NSERC to continue supporting CMC is "a big loss for Canada" and reflects "the absence of a research strategy for enabling disciplines such as those supported by CMC".

"CMC graduates move into many sectors because the technologies CMC supports are sector agnostic ... The discussion ought to have been, is this organization important?" says the observer. "It is a pity that this action could not have been averted ... I worry this will be another misstep that makes recruitment of research leaders more difficult."

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