Federal S&T spending takes a slight dip for the first time in five years

AECL and space agency buck the trend

Federal expenditures on S&T declined in real terms and as a percentage of government spending in FY06-07, as the Harper government ramped up spending on military and other measures in its inaugural Budget last Spring. S&T outlays this year totalled $9.185 billion or 0.5% less than $9.228 billion in FY05-06. The drop is even more pronounced for R&D, which experienced a year-over-year decline of 1.5% from $5.751 billion to $5.663 billion.

In contrast, federal spending overall (as gauged by the Main Estimates) jumped 6.8% to $168.6 billion, the largest annual increase in the past 10 years.

The drop in S&T spending is only the second time since FY 97-98 that federal outlays have declined, the other occurring in FY02-03. And after nine years of hefty increases to the R&D in higher education sector, the annual total in FY06-07 inched up to $2.465 billion, just $10 million or 0.4% more than the FY05-06 total (see chart below). Federal intramural R&D spending has remained largely unchanged for the past seven years.

The absence of increases to federal S&T and R&D spending appears to end a remarkable run that saw S&T spending increase 61.3% between FY95-96 and FY06-07 (33.2% in constant 1997 dollars). During that time R&D spending jumped 63.4% (36.3% in 1995 dollars).

The higher education sector has been the major — if not the only — beneficiary of federal largess. Since FY97-98. federal S&T spending in the post-secondary environment increased 240% from $725 million to $2.365 billion. The jump in R&D support has been nearly as spectacular — 206.5% over the same period.

The inequity in increases to post-secondary institutions and federal departments is borne out when individual entities are examined. Organizations such as the grant-ink councils, the Canada Foundation for Innovation and the Indirect Costs of University Research program have fuelled a major renaissance in university research. At the same time, budgets for line science-based departments have been largely stagnant or declining.

For example, Industry Canada, has seen its R&D drop from a FY00-01 high of $503 million to $296 million. In the last year alone, the department's R&D expenditures dropped $79 million or 21.1%.

The FY06-07 budgets of several other departments — Agriculture and Agri-Food Canada, Environment Canada and Natural Resources Canada — are also down. Even federal support for Genome Canada dropped this year, tumbling 33.3% from $92 million in FY05-06 to $62 million this year.

There are exceptions. The federal allocation to the Canadian Space Agency is up 9.6% to $370 million this year. Atomic Energy of Canada Lt also saw a 10.4% increase to its federal support, rising to $201 million.

SOCIO-ECONOMIC BREAKDOWN

Statistics Canada also breaks down federal S&T and R&D spending by socio-economic objective, with a further breakout for intramural and extramural spending. The data are for FY04-05.

For R&D, public health emerges as the largest single area for combined intramural and extramural, with $1.2 billion in spending. It is followed by industrial production and technology at $906 million, and non-oriented research ($636 million), production, distribution and rational utilization of energy ($380 million), agriculture ($348 million) and exploration and exploitation of space ($315 million).

For intramural R&D spending alone, agricultural production and technology tops the list at $269 million, followed by non-oriented research ($208 million), public health ($203 million), production, distribution and rational utilization of energy ($199 million), defence ($191 million) and industrial production and technology ($174 million).

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