Ontario reducing support for innovation intermedaries in drive to eliminate deficit

The bloom is off the rose of Ontario's aggressive support for research and innovation as the provincial government proposes a host of cuts and caps funding for the flagship Ontario Research Fund to reduce spending and balance the books by FY17-18. Budget 2012 contains no new measures in support of research and innovation but does include reductions in the support it provides innovation intermediaries and there's likely more change on the horizon.

While specific organizations are not named, Budget documents show that the Ministry of Economic Development and Innovation (MEDI) will be reducing expenditures by $25.3 million over three years by "scaling back funding in select transfer payments including the Commercialization and Innovation Network Support".

The organizations that fall into this category include MaRS, OCE Inc, Regional Innovation Networks and Regional Innovation Centres. Spending reductions will begin at $2 million in FY12-13 and jump to $18.3 million in FY13-14 before falling back to $5 million in FY14-15.

The budget reductions at MEDI follow previously announced cuts of $66 million. This was achieved by cancelling the next two funding rounds of the Ontario Research Fund - Research Excellence (ORF-RE) program ($42 million) and cuts to the Strategic Jobs and Investment Fund ($19 million) and the Life Sciences Commercialization Strategy ($5 million).

The Budget further circumscribes the ORF-RE and ORF-Research Infrastructure programs by capping the operating and capital components. Budget documents note, however, that the cap "would not yield savings but would provide greater flexibility to continue matching federal awards to invest in research infrastructure and ensure the continuation of the program". The Budget also calls for the creation of a Jobs and Prosperity Council to advise government on which business support programs should be rolled into a new Jobs and Prosperity Fund (JPF) and which should be eliminated for a savings of $250 million in FY14-15. The Council will be tasked with examining the province's R&D tax credits with the view to boost business R&D expenditures and simplify compliance and administration.

Its primary function, however, will be to consolidate programs into the JPF and reduce administrative costs by 25%. Ontario currently provides approximately $2 billion in annual support to business spread over more than 40 programs and across seven ministries.

The Budget calls for a deficit of $15.9 billion this year with complete elimination by 2018.

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