RE$EARCH MONEY Analysis: Science and technology proposals and requests for additional funding left hanging in absence of normal Budget cycle

This week's Speech from the Throne will likely continue with the good news that the Liberal administration is firmly behind building Canada's knowledge-based economy (KBE) but it's unlikely to provide much comfort or direction to those expecting announcements through the normal Budget cycle. With the chances of seeing a formal Budget before the fall (and next February at the latest) now vanished, backers of proposals currently before the government are understandably confused and frustrated.

Whether the absence of a traditional Budget cycle represents a huge lapse in the government's innovation policy or - as some contend - merely a lack of coordination, is a matter of considerable debate within Canada's S&T community. Several of the larger S&T-related proposals currently before government require urgent attention for diverse reasons, and the burning question remains: is the Liberal administration willing to allow those initiatives to languish for up to a year, exacerbating the pressures they were meant to address or alleviate?

Whether it's dilapidated federal research infrastructure, the crisis facing indirect costs of university research or the shortage of highly qualified personnel, the Liberal government has its work cut out as it tries to build an innovation system that's both world-class and globally competitive. Beyond the purely economic pressures S&T is positioned to confront, there's the whole area of sustainable development and environmental issues that were only partially addressed in last year's Budget.

SEARCHING FOR CLUES

Canada's innovation system is still far from complete, and the inspiring words of Finance minister Paul Martin in speech after speech don't replace concrete action and additional funding. Yet those speeches, the Economic Statement and Budget Update and the Liberal election platform document - Opportunity For All - are precisely where people are looking to seek clues as to which proposals will get the green light. The process is distressingly akin to reading tea leaves, leaving many observers and fund hopefuls questioning the government's ability to act on its oft-repeated commitment to science, research and innovation.

No doubt, the throne speech will press these buttons once again and perhaps provide some incremental insight into the government's future plans. But there's no doubt that there is considerably less room to manoeuvre this year, given the contents of the pre-election Economic Statement and Budget Update (R$, October 23/00). Now dubbed the mini-Budget, it announced $100 million in new funding for the Social Sciences and Humanities Research Council and another $500 million for the Canada Foundation for Innovation. And it also delivered a series of tax cuts totaling $100 billion over five years when added to the tax reduction measures introduced last February, leaving few resources to fund new S&T or research initiatives.

ECONOMIC DOWNTURN

Compounding the impact of the tax cuts on new spending is the downturn in the US economy and uncertainty over the extent to which Canada will be affected. With economic growth now more difficult to predict, the government may be more reluctant to approve funds for programs with multi-year or ongoing requirements.

So where does that leave the various proposals and their backers? Opinion seems to be split into two camps. Of those contacted by RE$EARCH MONEY, some fear that most proposals will be out of luck until the next Budget, meaning a delay of eight months to one year before they learn whether their project, program or facility is approved and funded. Others are more optimistic, and contend that the rhetoric of innovation and the KBE will be backed up with action in several fronts. They predict that a select number of S&T initiatives will be funded outside of the traditional Budget cycle, with nods going to approval for the indirect costs for university research, National Research Council cluster funding and some of the larger departmental proposals now being pitched to government.

POWER STRUGGLE

A simmering inter-departmental battle over control of the approval process for new initiatives makes any speculation on which proposals receive funding outside the Budget cycle more difficult. But the resurgence in power emanating from the Privy Council Office and the emergence of Brian Tobin as Industry minister will inevitably have a dramatic impact on the balance of power within government.

Tobin is expected to embrace science and innovation as a top priority for his department, and with the backing of the Prime Minister, it's expected that many of the themes outlined in the Opportunity For All election platform will be energized with new S&T spending through Industry Canada. Some read this as a shift away from the Finance department which has been championing S&T and innovation under the leadership of Paul Martin and DM Kevin Lynch. With Finance possibly waning as the dominant arbiter over new funding initiatives, that leaves the field open for the possibility of decisions outside the Budget cycle.

And that ultimately spells good news for proposals that have been effectively molded to fit the government's messages on science, innovation and the KBE. Time will ultimately reveal which predictions are accurate, but the betting money is on announcements of new spending before the summer break. In the meantime, watch for key statements from the ministers of Industry and Finance as the battle over spending heats up.

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