TO HOUSE OF COMMONS STANDING COMMITTEE ON FINANCE
2002 PRE-BUDGET CONSULTATION
Presented by the Partnership Group for Science and Engineering
August 22, 2002
The Partnership Group for Science and Engineering (PAGSE) is a cooperative
association of more than 20 national organizations in Science and Engineering,
formed in June 1995, at the invitation of the Academy of Science of the
Royal Society of Canada. The national organizations which comprise PAGSE
include thousands of individuals from industry, academia, and government
sectors. PAGSE works together, and in partnership with government, to
advance research and innovation for the benefit of Canadians.
Member organizations of PAGSE provide core support for its meetings and
activities. These include defining the economic benefits of research in
Canada and the effects of research budgets, analyzing intellectual property
issues and other potential impediments to improving academic-industry
symbiosis, examining the international dimensions of research projects
and associations, and informing decision makers about science and engineering
and their importance to Canada.
PAGSE represents an extensive resource that, through contracts, can hold
events and undertake studies and assessments of benefit to government
departments and agencies, to non-government organizations, and to the
general public. The Royal Society of Canada acts as the agent for PAGSE
for any contracts or agreements involving PAGSE projects. PAGSE has the
Committee to Advance Research, a university-industry committee, which
addresses issues of considerable importance such as the study on "Setting
Priorities for Research in Canada". In addition, in partnership with
NSERC, a monthly breakfast meeting is held on Parliament Hill known as
"Bacon and Eggheads", to inform parliamentarians about recent
advances in science and engineering. There are also presentations co-hosted
by Industry Canada and PAGSE, on trends in science and technology policy,
by key decision makers from different countries. Each fall a symposium
is organized on science and engineering issues - the theme for 2002 concerns
international research collaboration and is entitled "Canada: A Partner
in Global Science and Technology".
1. General Comments
Research and innovation are of genuine value in building on our existing
knowledge-based economy. Research is a continuum from basic to applied,
with developmental work raising new issues which need to be addressed
by creative, basic research. The outcomes of these investigations enhance
economic development, thus raising the quality of life for Canadians.
PAGSE applauds the portfolio of government of Canada programs established
in the past five years including, amongst them, the Canada Foundation
for Innovation, Canada Research Chairs, Genome Canada, and the significant
contributions to the coverage of indirect costs - a watershed development.
We also appreciate the increased funding which was provided to existing
programs such as Technology Partnerships Canada and the Granting Councils.
By the recent papers on "Knowledge Matters: Skills and Learning
for Canadians" and "Achieving Excellence: Investing in People,
Knowledge and Opportunity", the Government is inviting Canadians
to be partners in some bold initiatives which will serve as a springboard
to positioning Canada amongst the leading nations in investment in research
and innovation. PAGSE is enthusiastic about a number of key recommendations
made in these papers.
2. Highly Qualified Personnel
Pivotal to Canada's strategy in research and innovation in industry,
universities and government, is the need for an adequate number of highly
qualified personnel. Towards this end, we concur with the recommendation,
in Knowledge Matters, to increase the percentage of 25-64 year olds holding
post-secondary credentials from 39% to 50% over the next decade. We also
recommend that the training of technicians, across a spectrum of disciplines,
is critical to the realization of any innovation agenda.
Students often shoulder considerable personal debt as a result of their
education. PAGSE recommends changes to the student loan system,
whereby a substantial proportion (50-70%) of student loans would become
"grants" (hence "forgiven") on a prorated and progressive
basis, for individuals who remain in, or return to, Canada in a productive
professional capacity for a specified period after graduation.
Graduates with masters and doctoral degrees are central to the success
of a knowledge-based economy. We agree with the recommendation
in Knowledge Matters that admission of masters and doctoral students to
Canadian universities increases by an average of 5%/year through to 2010.
However, we highly recommend that "stock - taking" occur in
2005 to determine whether this strategy should be pursued, or whether
adjustments are in order. PAGSE does have concerns about the
receptor capacity for M.Sc. and Ph.D. graduates in different sectors.
It would be irresponsible of government to provide major increases in
funds to support the education and training of highly qualified personnel,
if there is an appreciable shortfall in the capacity of industry, academia,
and government to appropriately employ such graduates.
PAGSE contends that the level of support of graduate students and postdoctoral
fellows is a matter of greater urgency, both in terms of recruiting students
into science and engineering, and retaining them on a career basis rather
than wholesale transfers to business, law, etc. Paying competitive scholarship/fellowship
stipends is also key to Canadians staying in Canada. Consider, for example,
the recent announcement by Gordon Brown, the U.K. Chancellor of the Exchequer,
increasing the annual Predoctoral Scholarships from 24,000$ CAN (10,000
pounds) to 31,200$ CAN (13,000 pounds), and the annual value of Postdoctoral
Fellowships from 40,800 CAN (17,000 pounds) to 50,400$ CAN (21,000 pounds).
[By comparison NSERC Predoctoral Scholarships are $17,300 or $19,100/year
(depending on level), and Postdoctoral Fellowships are $35,000/year.]
PAGSE highly recommends that the value of Predoctoral and Postdoctoral
awards be increased by 50% over a two-year period.
3. Research in Industry
PAGSE considers the issue of in-house research in industry to be Canada's
most pressing challenge in the area of research and innovation. Simply
put, Canada performs at an uncompetitive level in industrial research.
Indeed, Deputy Prime Minister John Manley, stated in Research Perspectives
(a publication by the University of Ottawa) in 1998 that "The Level
of R & D in the industrial and private sector is a nagging problem
in Canada". Furthermore Statistics Canada, on July 19, 2002 reported
that industries plan to reduce spending on research and development by
6.1% in 2002. This estimate accentuates the magnitude of the challenge
to Canada. Creative initiatives are required, on an urgent basis, to nurture
research in industry.
PAGSE endorses implementation of the following actions under
consideration by the Government of Canada, as described in Achieving Excellence:
Reward Canada's innovators by means of a prestigious national
award presented annually to internationally competitive innovators in
the private sectors. (Parenthetically, we recommend that this award complement
that of the existing Manning Innovation Awards established by the Private
Increase the supply of venture capital in Canada in all sectors, with
the Business Development Bank of Canada acting as coordinator and manager.
Provide support for personnel to SME's via NRC's Industrial Research Assistance
PAGSE also recommends the following:
Government supports research and innovation by graduate students
and postdoctoral fellows working in SME's: researchers are to be paid
regular employee wages (not Coop or Postdoctoral level stipends).
Increase the eligibility of the SR + ED Tax Credit Program to include
funding to companies which are not yet profitable, in addition to those
which are profitable.
Forums/Workshops be organized, in different areas of Canada, to consider
"Best Practices" in industrial research and innovation by middle
and senior management on a global basis.
4. University Based Issues
U.S. Congressman Vernon Ehlers, Chair of the Congressional Science Subcommittee
for Environment, Technology and Standards, recently stated that "Basic
research funded by National Science Foundation grants provides the base
for our economic expansion for the future, and we must increase our efforts
so the results of this research will provide great benefits to our children
and grandchildren". It is through basic research, and the outcomes
that accrue therefrom, that Canada will build economic capacity and increase
(1) Support for the Granting Councils (NSERC, SSHRC, CIHR)
PAGSE endorses the recommendation in Achieving Excellence, to
increase support to the granting councils. PAGSE recommends that the Government
of Canada provide a 3-year budget to the Granting Councils, with the magnitude
of the budget increase to the Councils over the 3-year time frame being
dependent on the specific needs in each case.
(2) Canada Foundation for Innovation
CFI, by its support of major infrastructure, New Opportunities, and infrastructure
to Canada Research Chair holders, has transformed universities in Canada
into globally more competitive institutions. Given the fact that: (i)
funds remain for only one major CFI competition between now and 2005 (or
two minor competitions); (ii) the substantial increase in New Opportunities
and Canada Research Chair infrastructure funds as a consequence of numerous
anticipated Faculty retirements, as well as the recruitment of Canadians
and others from abroad; (iii) there is a genuine need to support highly
visible international research collaboration not just for infrastructure
but also to cover the costs of personnel, consumables, and travel. PAGSE
recommends that CFI be allocated 350 million dollars for 2003-5.
(3) Indirect Costs
PAGSE was delighted that the Government of Canada in its budget for 2002,
allocated funds for the first time as a contribution to the indirect costs
of research. We endorse the commitment in Achieving Excellence, of the
support of indirect costs. PAGSE recommends that Canada provide
contributions on an ongoing basis to the indirect costs of research. We
suggest that the support be increased from approximately 22% for this
fiscal year to 30% for 2003, and 35% for 2004.
(4) Commercialization of Research
Technology transfer and business enterprise are now important elements
of the outcomes of university-based research. Universities need to markedly
build capacity for the commercialization of university research, including
the training and employment of individuals with skill sets in intellectual
property, contracts management, patents and licensing, venture capital
negotiation and management. PAGSE recommends that the Canadian
Government allocate new resources to the different elements of the commercialization
of university research. Support could involve supplementary funding to
the indirect costs program, or the creation of a Commercialization Office
/ Secretariat either reporting to Industry Canada, or created as a non-government
organization. In addition PAGSE highly recommends the creation of a Canadian
analog of the U.S. Bayh/Dole Act, critical to minimizing barriers to industry-university
5. Canadian Academies of Science
In the Innovation Environment Challenge of Achieving Excellence,
it is recommended that the Government of Canada consider support of the
Canadian Academies of Science (CAS). PAGSE strongly supports this initiative.
CAS would provide objective, independent expert assessments on pressing
issues and matters of public interest. It would also serve as a voice
for Canada in international science and technology.
6. Government Based Issues
In addition to new investments in IRAP (see above), PAGSE recommends
An enhanced, standardized, and well-coordinated Peer Review protocol
be established for all proposed research in government laboratories, except
for work in regulation (e.g. the US Department of Energy, which has had
Canadians serving on its Review Panels, subjects universities and government
originated project proposals to a common peer-review process).
A proposed initiative involving FINE, a network of researchers in government
laboratories, be supported, with the added expectation of partnership
with researchers in industry and/or universities.
The role of government labs in maintaining long-term information
systems (e.g. weather data and mapping) be reviewed and renewed. Given
that industry and academia does not usually pursue this role, and cognizant
of the value and significance of such information to Canadians, this is
an area where government can seize leadership and capitalize on new opportunities.