Budget labelled a "deception"

Quebec’s new innovation council is facing mass defections in the wake of the March 23rd provincial Budget, with five resignations already submitted and more anticipated in the coming days. The decision by Dr Camille Limoges — co-chair of the 26-member Council of Partners for Innovation (CPI) — and four others to withdraw from the Council was prompted by the lack of S&T-related initiatives in the Budget.

"Budget 06-07 was dismal. It betrayed the idea that the recommendations made by the Council were urgent and needed to be tackled," says Limoges, who co-chaired CPI with the minister of Economic Development, Innovation and Export Trade. (EDIET) "Quebec’s S&T policy had total support in the province so the actions of the government are pretty hard to accept … The story of what has happened since 03-04 has been pretty much a dismantling of the system."

(Limoge’s original CPI co-chair was EDIET minister Claude Béchard. He was replaced in February by Raymond Bachand in a Cabinet shuffle prompted by the firing of the province’s environment minister.)

In addition to Limoges, the resignations to date include Dr Bernard Coupal, president of Gestion T2C2/Bio Inc, Dr Denis Gagnon, professor emeritus at Laval Univ, Dr Jean Nicolas, an engineering professor at the Univ of Sherbrooke and Dr Robert Lacroix, an economics professor at the Univ of Montreal (U of M) and its former rector.

Coupal says his decision to resign was prompted by the Budget’s failure to address CPI’s recommendations for a new fund to stimulate technology transfer and reinstate the innovative BioLevier loan program, coupled with Limoge’s departure as co-chair.

"I don’t like to work for nothing. We worked hard on recommendations and writing up papers. Then there was nothing in the Budget related to what we had done," he says. "I agreed with Limoge’s letter (of resignation). I have a very high respect for him and when he resigned, one of my main reasons for working on the committee disappeared."

The idea for CPI stemmed from a May/05 colloquium on the state of Quebec innovation co-chaired by Lacroix and Jacques St-Laurent, president of Bell Helicopter, Textron Canada Ltd. CPI was formed last October, following the release of a major provincial economic development strategy. CPI held its inaugural meeting November 29 to undertake a two-phase work plan — make recommendations to the government on urgent matters to be addressed in the forthcoming Budget, and provide input into a reworking of the 2001 S&T policy, of which Limoges was a central architect (R$, February 12/01).

CPI completed work on the first phase and its members were looking forward to the government’s response in the Budget. They were dismayed when they saw that it contained only three minor research-related initiatives worth $25 million a year over three years. CPI’s advice to the Finance minister is confidential but almost certainly included recommendations to increase operating funds for post-secondary institutions or the lifting of a tuition freeze instituted by the previous Parti Québecois government.

Limoges says the research funding provided by the Charest government to the provincial granting councils has been cut by $9.9 million annually since FY03-04, taking nearly $30 million out of the university research system.

The problem has been compounded by the winding down and sunsetting of Valorisation-Recherche Québec (VRQ). After reaching a peak of $61 million in FY02-03, VRQ pumped $30 million into the university system in FY05-06. That drops to $13.6 million in the current FY, after which its funding will be exhausted. VRQ’s demise means the latest Budget’s pledge of $25 million annually nets out to a year-over-year increase of just $9 million.

Prior to his resignation, Lacroix told RE$EARCH MONEY that the lack of new university funding over the past four years has created a financial crisis among the province’s institutions (R$, March 31/06). He estimates that the collective deficit of provincial universities is running at nearly $400 annually, resulting in larger class sizes, under-utilized research infrastructure and an undermining of their competitive position relative to institutions in other provinces. He calls the government’s creation of CPI and the Budget’s response to its recommendations "a deception".

"There’s dramatic underfunding and it’s cumulative," says Lacroix, who stepped down as U of M’s rector last May. "If we decided to reinvest next year, we won’t be able to catch up because the rest of the country is investing."

QUEBEC UNIVERSITIES GOING "DOWN THE DRAIN"

Lacroix’s bleak description of the financial state of Quebec’s universities is supported by another CPI member, who did not want to be identified for this article. He says it’s now up to the government to respond to the CPI resignations and indicate whether S&T and innovation factor into its future plans.

"It’s in the government’s court right now … We wanted the Budget to address urgent issues and indicate what is to come in the next Budget. Instead there was nothing," he says. "My feeling is clear now. Quebec universities, after a few years of good support, are now going down the drain. We won’t be able to compete with other universities across Canada."

After Jean Charest took power in 2003, new post-secondary investments have been halted, most tax incentives for business were cancelled and a major overhaul of venture capital (VC) was undertaken to increase private sector participation and reduce public dominance of the industry (R$, June 23/03 & March 18/04).

In the case of VC, the objective had the support of the private sector but many contend its execution was bungled.

"All the changes happened at once without anyone talking to one another," says Coupal, a veteran of Quebec’s biotech VC sector. "It created a period of flux and pressure on some of our companies."

CPI was announced as part of the province’s new economic development strategy and conceived as an advisory body of limited duration to provide advice to the minister of Finance. Whether it will continue on to tackle the second phase of its work plan — a reworking of the 2001 S&T policy leading into public consultations and action in the next Budget — will depend on the government’s reaction to the resignation of so many of its members. Next year is also an election year in the province, and S&T and innovation typically don’t rank high on voters’ priority lists.

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