The Socio-Economic Importance of Scientific Research To Canada

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The Socio-Economic Importance of Scientific Research to Canada Page 35© David A. Wolfe and Ammon Salterjust under $100 million. At the same time, the federal government separated the grants andfellowships activities in the social sciences and humanities from the Canada Council to formthe Social Sciences and Humanities Research Council. Along with the Medical ResearchCouncil, established in 1969 out of another unit within NRC, these bodies assumedresponsibility for administering federal support for research activities. Federal funding forbasic scientific research continued to grow steadily over the next decade (Kavanagh 1993).The last decade, in particular, has witnessed several attempts by the federal government toboost our level of investment in research and development. In 1987, the federal and provincialgovernments jointly signed the first National Science and Technology Policy, which created theCouncil of Science and Technology Ministers. Its objectives, among others, were to optimizethe existing S&T policies of both orders of government and to identify S&T policies andprogram actions that might be undertaken jointly. In the same year, the federal governmentannounced the launching of its science and technology strategy, 'InnovAction', designed toincrease industrial innovation and technology transfer, as well as develop and promote strategictechnologies. The strategy was assigned an initial five year budget of $1.3 billion allocatedamong several program initiatives, including:! Science and Technology Programs (Strategic Technologies, Sector Competitiveness,Services to Business) — $466 million;! Canadian Space Program — $256 million;! Networks of Centres of Excellence Program (funding for 15 networks) — $240 million;! increases to the federal Granting Councils — $200 million;! Canada Scholarships Program (for undergraduate students) — $80 million.The principle thrusts of the program were subsequently refinanced for a further five years at acost of $1.5 billion. “Most of this new funding is targeted at increasing the base funding levelsof the national granting councils, which had been eroding as a result of inflation and theincreased cost of research infrastructure” (Dufour and de la Mothe 1993, pp. 35-36). Thecontinuing support for this program by the Conservative government and the central placeassigned to both the Networks of Centres of Excellence program and maintaining the basefunding levels for the national granting councils demonstrated a commitment to the importantrole played by basic scientific research in the country’s economic development. This wasmatched by the initiatives of several provinces in launching their own Centres programs and/orproviding increased funding for basic research.The results of the federal election in 1993 seemed to signal a continuation of the policydirection set by the previous government. In the fall of 1994, the Liberal government released35
The Socio-Economic Importance of Scientific Research to Canada Page 36© David A. Wolfe and Ammon Salteranother series of policy documents outlining its broader economic agenda. The frameworkdocument issued by the Department of Finance (cited in the introduction to this paper) stressedthe role that it saw for innovation policy as one of the four pillars of its economic agenda. Acompanion document issued by Industry Canada, Building a More Innovative Economy, placedthe government’s S&T initiatives within the context of its broader economic agenda. Policyinitiatives were to be pursued in four key areas: trade, infrastructure, technology and theclimate of the marketplace. Of the four key areas, the two most central to the concerns of thispaper are infrastructure and technology. In the area of infrastructure spending, the governmentindicated its strong intention to support the information highway. It highlighted itscommitment to regulatory reform in the area of telecommunications policy, its efforts to extendthe CANARIE network with capital spending and its support for the linking of all schools andlibraries in the country to the Internet through the SchoolNET program. With respect totechnology, it outlined some of the key issues to be addressed in the S&T Review, includingthe need for a more systematic approach to the commercialization of R&D, the need to developa strong scientific culture in Canada, the need to establish which scientific and technologicaldevelopments Canada should pursue, the need to ensure that federal labs play an effective rolein the commercialization of technology and the need for measures to promote the rapiddiffusion of technology to industry (Government of Canada, 1994c, p. 61).The federal budget for 1994 reflected some of the broad themes outlined in the policydocuments, but clearly further development awaited the outcome of the S&T Review. Chiefamong the measures announced were the cancellation of the KAON project, a revamping of thespace program, funding for the Canadian Technology Network, additional funds for theNational Research Council, along with a stabilization of funding for the Networks of Centresof Excellence and the Granting Councils. The first budget seemed to provide some degree ofsupport for the directions promised in the Red Book. However, this sense of complacency didnot last long. In the next budget of February, 1995, the government signaled a change indirection away from the themes of the Red Book and towards a priority on deficit reduction.Not awaiting the outcome of the S&T Review, nor many of the other program reviews that hadbeen launched, it leveled a series of major cuts at program spending. The cuts were substantialacross the board and hardly any portfolio was spared, including the S&T one. IndustryCanada was particularly hard hit, with expenditure reductions of more than 42 per centplanned over a two year period, including many of its subsidies to business. The budgets of thethree granting councils were not spared, with NSERC, SSHRC and the MRC all targeted formajor reductions. A recent estimate suggests that over the three years since, when budgets areadjusted for inflation, MRC has suffered a 17.9 per cent reduction, NSERC 11.8 per cent and36
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