Federal S&T outlays set to decline 6% this year as stimulus spending expires

Departments and agencies hit hard

The new decade has not been kind to federal support for science and technology. Federal spending on S&T is projected to decline for the second year running, with a 5.9% forecast drop in FY12-13 to $10.9 billion — the lowest total outlay in the past five years. Related scientific activities (RSA) took the biggest hit, tumbling 8.6%, while R&D was down 4.3%, according to the latest data from Statistics Canada.

The end of stimulus funding and government actions to eliminate the annual deficit appear to be the two major drivers behind the decline which, when combined with the previous year's drop, shaved nearly $1.1 billion or 8.9% from federal expenditures from a high of $12 billion in FY10-11. Using constant 2002 dollars, FY10-11 marked an historic high for federal S&T outlays, reaching $9.8 billion, up 42.9% over the 10-year period beginning in FY00-01.

From a two-year perspective, however, R&D appears to be the biggest loser, registering a drop of $859 million or 11% to $7 billion since FY10-11. In comparison, RSA declined just 5% to $4 billion over the same period. Drilling down further, federally supported R&D spending by provinces and municipalities and intramural R&D expenditures are taking the brunt of the cuts. Spending by provinces and municipalities plummeted 84.7% over the past three years to just $26 million while federal intramural spending declined 17.7% from $3 billion in FY10-11 to $2.5 billion in FY12-13.

Business expenditures declined 5.5% over the same period to $915 million while higher education spending was flat, holding steady at $2.9 billion. (Contracts and research fellowships to higher education institutes add a further $367 million). Federal funding of foreign performers was the only category to register an increase, rising 5.8% to $197 million.

most departments experience declines

Across major departments and agencies, 14 of the 16 tracked by StatsCan registered declines. Only the Canada Foundation for Innovation and Health Canada received more in FY12-13. Overall, spending by the departments and agencies declined 7.2%, while spending categorized as "Other" dipped a mere 0.2%

The steepest cut was delivered to Statistics Canada itself, which suffered a 30% year-over-year drop (the department's S&T spending can vary from year-to-year depending on the volume of surveys in the field). Both the Canadian Space Agency and Agriculture and Agri-Food Canada were compelled to absorb significant reductions (15% and 14.6% respectively), followed by Industry Canada (12.7%) and National Defence (10.7%). Cuts to the remaining departments and agencies ranged from the Social Sciences and Humanities Research Council (1.6%) to Atomic Energy of Canada Ltd (8.5%).

Businesses received $1.2 billion in R&D and RSA in FY12-13. The major source for this support comes through grants and contributions ($706 million), primarily Industry Canada ($355 million), Natural Resources Canada ($214 million) and the National Research Council ($89 million). The leading source of contracts to industry was the Canadian Space Agency ($140 million) which was also the top source of scientific activities payments to business ($44 million).

Federal intramural R&D spending is closely aligned with government socio-economic objectives. Energy R&D was the single largest expenditure ($717 million, followed by agriculture ($360 million, protection and improvement of human health ($280 million) and defence ($276 million).

energy R&D soars

The importance of energy to the economy is reflected in the impressive increase in R&D spending, soaring from $214 million or 10% of all intramural expenditures in FY02-03 to $717 million in FY10-11 (the latest year for which data are available), or 25% of all intramural spending.

Not surprisingly, the number of federal scientific and professional personnel is set to decline in 2012-13 to 19,844, down 4.1% from 20,701 the previous year. The bulk of the reductions are in the area of related scientific activities, which dropped 5.1% to 11,861. R&D personnel declined 2.4% to 6,822 while personnel that administer extramural R&D programs dropped 3.2% to 842. Technical personnel also declined 2.3% to 7,977 while other personnel dropped 5.1% to 9,562. Taken together, all categories of S&T personnel totalled 37,382, down 4% from the previous year. At the departmental level, Statistics Canada suffered the greatest job losses, dropping nearly 1,100 people for a 16.7% reduction.

Of the $12 billion spent on S&T in 2010-11, the National Capital Region accounted for the single largest amount ($3.3 billion/intramural only), followed by Ontario ($3.2 billion), Quebec ($1.8 billion), British Columbia ($924 million), Alberta ($691 million), Manitoba ($355 million), Nova Scotia ($337 million), Saskatchewan ($248 million), New Brunswick ($131 million), Newfoundland ($127 million), the northern territories ($104 million) and PEI ($49 million).

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