What to expect on the R&D front from tomorrow’s “transformational” budget?

Canada’s federal budget is due in less than 24 hours, and so we still have some time to speculate about it. There are four elements to work with and to extrapolate from. First, Harper’s declarations at Davos indicate a will to address some aspects of government funding to R&D programs. Secondly, there seems to be an atmosphere that this is a front where the budget will carry some good news. Thirdly, the recommendations of the Jenkins report have been at the core of all R&D discussions lately. And finally, there is this element of “wishful thinking”, which is highly subjective of course, but nevertheless omnipresent in any process involving guesses and predictions. So, off we go.

1. The Scientific Research and Experimental Development (SR&ED) program: The recommendations of the Jenkins panel for SR&ED go “deeper” than they look, which of course means that the government will not be able to move full tilt on reforming that program. Still, even minor changes in the spirit of the report can save the government hundreds of millions of dollars. This is cash that can be invested elsewhere in direct funding for programs supporting the innovation agenda, without affecting this year’s cost-cutting budget. So see below where the money could go.

2. The National Research Council (NRC):  Again, and in spite of the carefully chosen words, the recommendations of the Jenkins report on this front go too far towards the dismantlement of this venerable institution. Changes are to be expected but not necessarily the way the R&D panel suggests. There will definitely be a refocussing on the business and commercialization end, which is what the new president, John McDougall, is doing anyway. However, Goodyear’s talk about the NRC “hopefully being a one-stop, 1-800, ‘I have a solution for your business problem,'” may usher a net gain for the NRC. This is connected to 4) below.

3. The Tri-council: I don’t expect major cuts to the Tri-council, including to the programs that support investigator-driven basic research at universities. We are told that the presidents of the major universities, the AUCC, the CAUT have all lobbied  against any cut to these programs. Plus, you always have the specter of another “Don’t leave Canada behind” campaign…  However,  NSERC’s Research Partnership Program (RPP) seems to be getting lately an inordinate amount of praise from Gary Goodyear. This can either mean more funding to that part of NSERC or it could be some kind of “we like it so much that we are going to take it away and enhance it further”. See 4) below.

4. The creation of an “Industrial Research and Innovation Council” (IRIC) to deliver the federal government’s business innovation programs, as recommended by the Jenkins report, seems to be one of the surest things. The new council is supposed to be an “arm’s-length funding and delivery agency that will serve as a common application portal and service to help businesses find the right programs for their needs (a “concierge”).” Funny that Goodyear has used essentially the very same words to phrase his preferred “vision” for the NRC. Does it mean that IRIC will then be part of the NRC, since it is supposed to encompass IRAP anyway? On the other hand, the existence of an outlet such as IRIC could make NSERC’s RPP program redundant. Sooner or later, there will be pressure to consolidate and move the RPP programs to IRIC. Under this scenario, Naylor and his friends on the R&D panel may come to regret not having proposed this in the first place, with an additional  recommendation to the effect that the RPP cash should stay behind at NSERC in support of basic research at universities, and that new monies (from SR&ED savings) be found for IRIC.

All this could be announced tomorrow, yet will have to wait far into the future to be fully implemented. Didn’t Mr. Flaherty say, “We’re looking at 2020 and beyond. We’re not just looking at next year and the year after that.”

5. As said before, any minor reform of SRED could release some cash for more direct funding of R&D programs. Where could this money go? IRAP will surely get some, and NSERC’s RPP as usual. I am also betting on other hybrid organizations, which seem to be quite liked by government because they are showing an innovative spirit, albeit in directions of research and in their delivery mechanisms. With a nimble and flexible modus operandi, something the Tri-council lacks big time, they can react quickly to opportunities.

6. Last but not least, I believe the government will be acting on the following recommendation by the Jenkins report. “The Prime Minister should assign responsibility for innovation to a single minister, supported by awhole-of-government Innovation Advisory Committee, evolved from the current Science Technology and Innovation Council (STIC), composed of external stakeholders, who would then work with the provincial and territorial governments to initiate a collaborative dialogue to improve coordination and impact.”

This would then go to Gary Goodyear, who expects it and who has been working hard for years to earn it. If he can manage to be a tooth fairy when Jim Flaherty is being the axe man, then he would surely have the full support of the research community.

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