Ottawa introduces new national security guidelines for NSERC grants

Sebastian Leck
July 14, 2021

Innovation, Science and Economic Development Canada (ISED) has released new national security guidelines for universities and research institutions after concerns were raised earlier this year about research partnerships with Chinese companies.

The guidelines — published on ISED's website — will be applied immediately and will be mandatory for federal research partnership funding through the Natural Sciences and Engineering Research Council of Canada’s (NSERC) Alliance Grants program for "any application involving private sector partner organizations," ISED said in a statement.

As part of their grant applications, researchers will now be required to complete a risk assessment and develop a risk mitigation plan describing the measures they will put into place if risks to Canada's national security are identified.

ISED said that NSERC will review the risk assessment and mitigation measures and consult with national security agencies and departments on a "case-by-case basis." They plan to expand the guidelines to all granting councils and to the Canada Foundation for Innovation in the near term.

"By requiring that risk assessments be submitted with research funding requests, these new mandatory guidelines will help protect Canadian research, knowledge and intellectual property,"  Minister of Innovation, Science and Industry François-Philippe Champagne said in a release.

"We will not take chances with Canada’s national and economic security. Projects that are deemed high risk, or where the risk cannot be mitigated, will not be funded."

The government's new guidelines do not mention any specific nations. However, the working group was tasked with developing the guidelines after a Globe and Mail report detailed Alliance Grant partnerships between Canadian researchers and the Canadian arm of Huawei Technologies, a telecommunications company based in China.

In February, NSERC told Research Money that Alliance Grant funding goes only to researchers at Canadian universities and not to partner organizations.

"NSERC funds match investments the academic institutions obtain from partner organizations according to established cost-sharing ratios. Financial investments from NSERC and partner organizations are paid directly and only to the universities," they wrote in an email at the time.

Partnerships with foreign not-for-profit and government organizations are not eligible for Alliance Grants.

Researchers asked to assess the risk level of their research and partners

The new guidelines ask researchers to assess the potential national security risks based on their type of research and partners.

Researchers applying to NSERC Alliance Grants will assess whether their research is "of interest to foreign governments, militaries, or their proxies" or has "potential military, policing, or intelligence applications, even if that is not your intended use for it."

They're also asked to assess their chosen research partner and whether they have affiliations to third party governments, militaries or organizations that could negatively impact Canada’s national security.

The government's "non-exhaustive" list of research areas that may be considered sensitive is as follows:

  • Advanced Materials and Manufacturing
  • Advanced Ocean Technologies
  • Advanced Sensing and Surveillance
  • Advanced Weapons
  • Aerospace
  • Artificial Intelligence
  • Biotechnology
  • Energy Generation, Storage and Transmission
  • Medical Technology
  • Neurotechnology and Human-Machine Integration
  • Next Generation Computing and Digital Infrastructure
  • Position, Navigation and Timing
  • Quantum Science
  • Robotics and Autonomous Systems
  • Space Technology

The risk assessment also includes an item on whether the researcher works in areas related to critical minerals and critical mineral supply chains. China currently has a near-monopoly on the trade of critical minerals, but federal and provincial governments are pushing to make Canada a preferred supplier.

The Government of Canada–Universities Working Group was established in 2018 and includes representatives from NSERC, the Canada Foundation for Innovation, Canadian Security Intelligence Service, the National Research Council, U15 Group of Canadian Research Universities and other government and research bodies.

The Government of Canada asked the working group to develop a set of national security guidelines in March 2021.

New guidelines currently cover only partnerships that receive federal funding

Margaret McCuaig-Johnston, a former executive vice-president at NSERC and a former member of the Steering Committee for the Canada-China Science and Technology Initiative, said the guidelines are a welcome first step, but they only cover partnerships receiving federal funds.

Many Chinese companies have "deep pockets" and can fund research on their own, she said — and often with the stipulation that funding amounts are not publicly disclosed.

"For the last number of years, we've seen that collaborations are happening without Canadian researchers applying for matching NSERC grants," said McCuaig-Johnston, who is currently a senior fellow at the University of Ottawa's Institute for Science.

"What this means is sometimes even the presence of millions of dollars in a particular research lab isn't visible to the public."

McCuaig-Johnston pointed to one recent example. Researchers at Queen's and York University have received funding from the Chinese company iFlytek, which has supplied surveillance equipment used in the Xinjiang region in northwest China populated mainly by Muslim Uyghurs.

Chinese government agencies are using the company's technology to create a national voice biometric database, according to Human Rights Watch.

The current guidelines also only address partnerships with private sector organizations, she said. In future, she would like to see guidelines on partnerships with foreign universities and research institutions as well.

"Our researchers often will say, you know, I've partnered with my friends in China for 20 years," she said. "There's nothing wrong with what they're doing, but these researchers aren't fully informed of China's policy, which has ramped up under Xi Jinping for the integration of military and civilian technology development."

"That puts our own researchers at risk of helping China's military and going against Canadian values. And that then should become our priority — not just continuing to partner with China as we wish China to be."


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