Federal S&T outlays remains flat, account for shrinking portion of government spending

National defence bucks trend

Science and technology spending by the federal government has increased as a proportion of overall government expenditures over the past 13 years but has retreated in recent years from a high of 5% in FY03-04, according to the latest data from Statistics Canada. Federal S&T outlays totalled $10.7 billion in FY09-10, a modest increase from the previous two years but not enough to alter its 4.3% share of overall spending of $248.4 billion.

Of the S&T total for FY09-10, $5.4 billion is spent intramurally while $5.2 billion is spent by extramural performers, with the higher education sector accounting for $3.3 billion or 62.7% of the extramural total. After higher education, the business sector received the next-largest amount ($987 million, marginally up from FY08-09 but down from $1.0 billion in received in FY05-06. Intramural spending is roughly evenly split between R&D and related scientific activities (RSA). Canadian non-profit institutions have also fallen off from a high of $548 million in FY07-08 to $412 million in FY09-10, a three-year decline of nearly 25%.

Of the 13 departments and agencies listed as receiving federal R&D funding, 10 performers experienced a slight increase from the previous year, while three received slightly less. The most obvious exception to the funding trend is National Defence, which enjoyed a 30.2% year-over-year increase from $334 million to $435 million.

The general lack of new funding and its impact on federal intramural activities is perhaps best illustrated by the National Research Council (NRC) which received less in FY09-10 ($571 million) than it did in FY05-06 ($629 million). The inability to attract new funding has negatively impacted NRC employment levels with a 13.7% decline in personnel engaged in S&T activities in the past two years, and an 8.2% drop in the same period for R&D personnel, which now stands at 3,520 from a high of 3,833 in FY07-08.

Stagnant S&T spending by many performers located in the National Capital Region pushed down the total performed by $77 million or 2.2% to $2.9 billion, with 86.7% performed on the Ontario side of the Ottawa River.

As expected, higher education institutions received the bulk of federal S&T support ($3.3 billion) with $2.9 or 90% allocated to R&D. The largest single funder of the higher education sector is the Canadian Institutes of Health Research ($816 million), closely followed by the Natural Sciences and Engineering Research Council ($805 million), the Canada Foundation for Innovation ($567 million) and the Social Sciences and Humanities Research Council ($528 million). The latter includes $315 million for the indirect costs of university research.

For the business sector, the $805 million federal R&D funding allocated to companies in FY09-10 came in the form of contracts ($305 million) and grants and contributions ($495 million) and research fellowships ($5 million) Payments for RSA totalled $182 million.

Industry Canada was the largest source of grants and contributions ($288 million), followed by the NRC $87 million), Atlantic Canada Opportunities Agency ($56 million) and Natural Resources Canada ($51 million). The leading source of R&D contracts to business was the Canadian Space Agency ($181 million), followed by National Defence ($84 million).

As of FY09-10, federal S&T personnel totalled 37,044, with 13,813 engaged in R&D, 20,601 in RSA, 2,016 administering extramural R&D programs, and 601 administering extramural RSA programs.

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