TO HOUSE OF COMMONS STANDING COMMITTEE ON FINANCE
2015 PRE-BUDGET CONSULTATION
The Partnership Group for Science
282 Somerset Street West, Ottawa
August 7, 2015
Canadians understand that the economic, social and environmental
health of the country depends crucially on science, technology
and innovation (STI). Whether it is in the development of
new diagnostic technologies in health, renewable energy technologies
to heat and light our businesses and homes, or bringing a
new product to market that will enhance prosperity and create
jobs, STI touches every aspect of our daily lives.
With a relatively stable economy, high standard of living,
and world-leading educational system, Canada has an outstanding
opportunity to build on recent investments in our STI enterprise
to become a global leader in the knowledge economy. We punch
above our weight in terms of international science impact
and play host to some of the world's leading researchers and
research institutions. However, other countries and key trading
partners, in particular the United States, Germany, and the
UK, are investing proportionately more in science and reaping
greater benefits. Canada can and must do more to become a
global leader in STI. Key to achieving this goal will be creating
an enduring and stable foundation for discovery-based research
to generate the ideas that fuel innovation, building and renewing
science infrastructure to accelerate productivity growth and
resilience in northern communities, and making talented students
and their ideas more mobile within Canada to facilitate knowledge
sharing and innovation.
The Partnership Group for Science and Engineering
(PAGSE) recommends that the Government:
• Increase investments in science and technology
to match those in comparator countries.
This recommendation addresses the 2015 pre-budget consultation
theme of productivity, infrastructure and communities, and
• Build smart grid technologies in northern
communities to improve resilience, sustainability, and lower
energy costs. This recommendation addresses the same
three themes as the first recommendation.
• Establish Canada Opportunity Scholarships
to enable graduate students to study at the best institutions.
This recommendation focuses particularly on jobs and strategies
to bring people with excellent skills to the notice of employers
who need highly trained personnel, regardless of their location
• Provide tax credits for building and supporting
new industry-partnered research laboratories across Canada.
This recommendation focuses on taxation and a strategy
to accelerate the ideas-to-innovation agenda by bringing applied
research laboratories closer to key sources for cutting edge
The Partnership Group for Science and Engineering (PAGSE)
is an association of 24 professional and scientific organizations
representing greater than 50,000 members from academia, industry
and government sectors. It represents the Canadian science
and engineering community and seeks to advance research and
innovation for the benefit of Canadians.
PAGSE presents a consensus statement based on consultations
with its members. We seek to build on existing government
programs and initiatives to strengthen the landscape for STI
in our country. We concentrate on two themes: the upstream
end of the innovation chain and the flexible development of
A stable and enduring foundation for discovery-based
Our prosperity depends on our ability to translate the knowledge
and ideas created by discovery-based research into innovations
that improve economic productivity, either by cutting costs
or creating new markets. While the path from idea to innovation
is not always straight or even obvious, discovery research
plays an essential role because it provides ideas that lead
to innovation. Consider, as an example, the work of the late
Dr. Michael Smith at the University of British Columbia. Dr.
Smith was awarded the 1993 Nobel Prize in Chemistry for his
“fundamental contributions to the establishment of oligonucleotide-based,
site-directed mutagenesis and its development for protein
studies” (Nobelprize.org) or, in other words, his ability
to manipulate DNA, the hereditary material for life, at will.
His research was foundational and curiosity driven, without
any direct connection to an applied problem. Yet this work
now has a very innovative application: it helps produce human
insulin, which keeps ~ 2.4 million Canadians and others with
diabetes healthy and safe.
Support for a vigorous discovery research environment is
key to providing the ideas that fuel innovation. While recent
investments in discovery research -increasing funding for
the Tri-Councils and creating the Canada Excellence Research
Fund - are welcome, more needs to be done to ensure Canada
remains globally competitive in supporting this key component
of the STI system. Canada trails many OECD countries in support
for Research and Development (R&D) funding as a percent
of GDP. This gap is growing as Canada has slid from 16th to
23rd between 2006 and 2012 in terms of proportional R&D
funding among OECD economies. During this time, spending as
a proportion of GDP has dropped by 2 percent to 1.74per cent1.
Notably, the Scientific Advisory Board of the Secretary General
of the United Nations suggests R&D funding should be 3.5
per cent of GDP2. R&D funding at this level
would place Canada in the enviable position of being a global
leader in support for innovation. We encourage the Government
of Canada to work toward committing 3.5 per cent of GDP to
fund research and development by 2025.
Developing renewable energy resources for Canada’s
Remote northern communities in Canada are not connected to
the large electrical power grids available in the south. They
operate as isolated microgrids supplying residential, business,
and industrial customers. Most rely on diesel fuel to generate
electricity, which is expensive to produce and transport.
High electricity generation costs are passed on to Northerners.
This problem is compounded by diesel generators’ substantial
environmental footprint, which includes greenhouse gas and
black carbon production in a region where climate change is
occurring faster than nearly anywhere else on Earth.
Renewable energy sources such as solar, wind, geothermal,
and hydro power can help offset the impacts of diesel generation.
Combinations of renewables can be tailored to each community's
needs and local availability of the energy source. For example,
Yukon and Northwest Territories have abundant hydro power
potential, which are underused, in part, because energy storage
technologies have not been deployed broadly. Smart grids work
around this limitation by optimizing generation, delivery,
and load of electricity.
Federal leadership to support the construction and implementation
of smart grids is critical as Territorial governments have
insufficient resources to explore, test and deploy renewable
energy options. The Federal government could set a target
for investment in renewable energy in Northern communities
to reduce the reliance on fossil fuels by about 20 per cent.
Progress towards this target would improve energy efficiency,
enhance reliability of energy supply, and reduce costs of
living in the North. This change to northern infrastructure
would also reduce greenhouse gas emissions, which would help
meet emissions targets in the process, and facilitate new
economic development by creating jobs and training opportunities
in the North for civil, electrical, mechanical and environmental
Funding emerging leaders in research and innovation
Ideas that shape and re-shape the economy can come from anywhere
in Canada or around the world. Yet, the people generating
these game-changing ideas are often separated from the best
training opportunities by great distances and an uneven playing
field in terms of costs of study. PAGSE recommends creating
a fund to help emerging leaders in research and innovation
to contribute to Canada's economic evolution.
For leading international students, the appeal of coming
to Canada is the chance to work with world-leading researchers
in top-flight institutions, but barriers associated with visa
processing are reducing Canada's ability to attract the best
and the brightest from the global talent pool3.
The federal government can help increase Canada’s competitiveness
for access to international talent in two ways. The first
is by ensuring that visa processing times are competitive
with key competitors, such as the USA and the UK, and that
visa conditions facilitate stable progression of studies from
undergraduate student to postdoctoral researcher.
The second recommendation is to help equalize access and
opportunity to education across Canada's regions, an effort
that will benefit Canadian students as well as international
ones. A Canada Opportunity Scholarship Program for Canadian
permanent residents and international students would make
it possible for the best students from any part of Canada
to pursue research and innovation at the graduate level (MSc
and PhD) anywhere else in Canada. Tuition fees vary significantly
across Canada but costs of living vary dramatically. A student
pursuing graduate work in plant biotechnology at the University
of Saskatoon can expect to incur annual expenses of $15-$18k4.
To pursue the same program at the University of British Columbia,
a student living in a modest studio apartment might pay annual
costs of $23k5.
PAGSE recommends 1000 Canada Opportunity Scholarships of
$5,000 be funded per year for two years of study for any advanced
degree in science and technology, including graduate work
in science, technology, engineering and mathematics (STEM)
fields. The annual program costs in the first year would peak
at $5 million per year and costs in subsequent years would
then have an annual maximum of $10 million.
Update the federal government Scientific Research
and Experimental Development (SR&ED) Tax Credit Program
The SR&ED program was created to encourage Canadian businesses
of all sizes, in particular small to medium enterprises (SMEs)
and start-up firms, and in all sectors of industry to conduct
research and development (R&D) in Canada. It is among
the most generous program of its kind in the world but concerns
remain that Canada remains near the bottom of its peer group
in terms of investment in innovation, at 13th out of 16 countries6.
PAGSE recommends retargeting existing tax credits to operating
costs that co-localize and embed industrial R&D facilities
with universities and government research labs. Such joint
facilities would complement existing programs that seek to
encourage industry-academia partnerships such as those run
by MITACS and NSERC. It also extends the potential impact
of CFI infrastructure investments. This initiative would help
unlock the wealth of ideas that can be ‘trapped’
within universities by providing a physical space to facilitate
routine research-industry collaboration and encourage communication
among researchers in different research fields from academia,
government and industry. They would serve as science and engineering
hubs for collaboration and attracting partners from Canada
and around the world to draw upon the Canadian R&D capabilities
These innovation hubs could have the added value of making
smaller universities attractive destinations for training,
research, development and other related science and engineering
activities. Funding for innovation projects and funding for
hiring educated employees depends on a successful innovation
ecosystem, in which incentives provided by an improved SR&ED
tax credit program have an important role.
Canada’s federal government has a goal to enhance and
assist innovation. There are clear opportunities to integrate
innovation in northern development. Nevertheless, the science
and engineering research community is unanimous that, over
time, the erosion in support for basic research stifles the
supply of ideas that drive innovation and the supply of young
innovators from our universities. PAGSE urges the House of
Commons Standing Committee on Finance to expand resources
available for basic research.