Department of Finance, Canada

Budget afoot. Canadian Finance Minister Jim Flaherty buys ritual shoes before presenting this year's budget.

Canada Holds the Line on Research

The arrival of the federal budget has become like Groundhog Day for Canadian scientists. Every year, the government's finance minister pokes his head out and unveils a series of measures that result in heightened competition for rank-and-file scientists but, in the end, leave unchanged the overall amount of money available for research grants.

Yesterday was no exception. Finance Minister Jim Flaherty's blueprint for the fiscal year that starts on Sunday takes a bite out of the base budgets for the nation's three granting councils. It's part of $5.2 billion in government-wide cuts over the next 3 years in a $276 billion budget. But the granting councils also benefit from targeted funding for "industry-academic" partnerships, allowing the budgets for the Natural Sciences and Engineering Research Council (NSERC) and the Canadian Institutes of Health Research to hold steady at roughly $1 billion apiece and the Social Sciences and Humanities Research Council budget to likewise tread water at roughly $660 million.

At the same time, the government announced a 5-year, $500 million allocation, starting in 2014, for the next round of competitive grants through the Canada Foundation for Innovation, which has spent $5 billion over the past decade on university research infrastructure. It's also giving Genome Canada $60 million over 2 years for a new competition in the area of applied research to improve human health.

Association of Universities and Colleges of Canada President and CEO Paul Davidson thinks that research did quite well in comparison to other government programs. "We're very encouraged," he said. "I think there are a lot of smart and strategic investments here, particularly in the area of innovation." The granting councils, he added, "are kept whole in a year when many people are facing 7-, 10-, and more percent cuts."

At least that's true for the new fiscal year. But in 2013-14, the natural sciences and medical councils may have to absorb a $15 million blow, and the social science council a $7 million hit, as part of the next round of multiyear austerity measures. That is, unless the government launches another initiative aimed at achieving cozier relations with industry.

"Our understanding is that the savings identified through the strategic operating review by the granting councils are being fully invested in the granting councils," Davidson said about future cuts. "What that says to researchers is that the research environment remains whole, and that this is a stable and enviable place to work, internationally."

Canadian Association of University Teachers Executive Director James Turk begged to differ, however. He opposes the Conservative government's continued efforts aimed, as it puts it, at "directing money away from science-driven, basic research and trying to refocus researcher's attention on what will serve the structure and commercial interests of the business community."

That trend is clear in this year's budget. In the case of NSERC, which once touted its Engage Grants program as a means of promoting "speed dating" between industry and academia, a $15 million budget cut has been offset by $15 million for the council's Strategy for Partnerships and Innovation.

"This is a pattern they've been on since 2007," Turk said, forecasting even lower approval rates in granting council competitions. "It's worrisome that they continue to think like [the late] George Steinbrenner building the [New York] Yankees into a pennant contender by spending enormous amounts of money on a few high-profile people."

Minister Flaherty described the government's approach as a triumph in moderation. "Because of our government's responsible choices, we can eliminate the deficit through common-sense, moderate restraint," he said in his budget speech. "We have no need to resort to the drastic cuts being forced upon some other developed countries."

The new budget also continues the government's plan to convert its primary in-house research arm, the National Research Council (NRC), into a toolbox for industry. NRC saw its budget boosted by 31%, to $700 million, with $67 million to support its "refocusing on business-led, industry-relevant research." Spending on the council's Industrial Research Assistance Program, which provides extramural grants to businesses to develop new products, will double, to $220 million. The government also plans to invest $12 million a year to create Business-Led Networks of Centres of Excellence, making it a "permanent" fixture in the Canadian research firmament.

At the same time, the new budget whittles away at the country's Scientific Research and Experimental Development tax credit program, considered the most generous in the world. In what finance officials called "the first phase of the government's new approach to supporting business innovation," capital expenditures will no longer be eligible for the credit, and the overall rate will drop to 15% from 20%, effective 1 January 2014.

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