The Hon John Manley, Minister of Industry

Investing in Innovation

By The Hon John Manley,

Minister of Industry

It is imperative that we innovate. The Government of Canada has been promoting and encouraging innovation for the last six years. Budget 2000 deepens our commitment.

For example, the budget provides $900 million over five years through the granting councils to establish and sustain 2,000 Canada Research Chairs by 2004-05. Universities make an important contribution to research and innovation in Canada. The budget recognizes, however, that the same institutions face intense competition in attracting and retaining the best researchers.

We want Canadians to have the opportunities to create ideas here, in Canada. The research chairs will encourage the creation of a critical mass of world-class researchers. Our government's goal is to provide opportunities to promising young researchers from across Canada and to attract researchers from around the world.

The recent budget also increased funding for the Canada Foundation for Innovation by a further $900 million. The government provided an initial $800 million to the Foundation in 1997, adding $200 million in the 1999 budget. CFI enables Canada's finest minds to carry out world-class scientific research and technology development by investing in infrastructure projects at Canadian universities, colleges and teaching hospitals. To date, the Foundation has funded projects in every part of the country - reinforcing strengths in small and large institutions while creating new opportunities.

For innovation to occur, bright new ideas must be turned into commercially successful products and services. These can be high risk undertakings. The government will help by allowing employees to pay tax only when they sell their qualifying stock options, and not when they exercise their options. Capital gains taxes will also be lowered: the amount of capital gains included in income for tax purposes will be reduced from three-quarters to two-thirds.

These measures will help Canada become a magnet for brains in the next decade. So that if a university graduate moves south, it's for the sandy beaches and the warm winters and not because of lack of opportunity here. Constant innovation will help to ensure that Canada can compete globally during this time of tremendous change.

Perhaps biotechnology best represents the tide of that change. Genome Canada will receive $160 million to fund five genome science centres that provide laboratory services to researchers and accelerate genomics research. In addition, over the next three years, federal government departments, including Industry Canada, will be supported by a further investment of $90 million to improve the biotechnology regulatory system.

Another leading-edge field involves the Pre-Competitive Applied Research Network, or PRECARN. This national industry-led consortium helps Canadian companies undertake research in artificial intelligence and advanced robotics. PRECARN uses federal investments to match private sector and provincial government contributions. A new investment of $20 million will support "Phase III" of PRECARN's program for research and development.

Budget 2000 provides the right economic, social and regulatory framework within which innovation can more easily occur. There's no question that we need to encourage risk and reward success in Canada. With this, the first budget of the 21st century, I am confident that we are taking the right steps to create Canada's culture of innovation.