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Budget Shifts Science Focus Back to Basics


MNP's TAKE: The 2016 federal budget strengthens Canada’s research and innovation system by dedicating new resources to discovery research, infrastructure at post-secondary institutions and federal laboratories, and by accelerating the diffusion and commercialization of knowledge into applications that benefit industry and society. An additional $95 million per year has been earmarked on an ongoing basis to the research and innovation granting councils, which represents the largest increase in annual funding for R&D in over a decade. Most of this investment will fuel discovery research, which for the large part, is not undertaken by Canadian businesses. Canadian businesses traditionally rely on the Scientific Research & Experimental Development (SR&ED) tax incentive program to compensate spending on Research & Development (R&D). The federal budget did not propose any changes to this important Canadian tax program. Despite this, it is important to note that discovery and business-led R&D are often complementary to one another by offering opportunities to synergize and fuel future innovations and create new industries eventually leading to economic growth.

In order for your business to remain competitive, it is important you continue to improve and innovate. With a renewed focus by the Canadian government to fund discovery R&D, it is vital your business takes full advantage of tax incentives for complementary business-led R&D such as those through the SR&ED program. In these instances, knowing what to look for is key. By identifying recoverable activities and costs, preparing compliant claims and efficiently navigating through the claims process, you will be able to capitalize on every opportunity available. 

To learn more about how you can get the most out of your innovation, contact Jay McLean, CPA, CMA, P. Eng, MBA, BASc., MNP's National SR&ED Director at 519.725.7700 or [email protected]


Funding increases for universities and federal labs a big departure from Harper government’s emphasis on commercial applications

After the federal Liberals pledged to treat scientists with respect following last fall’s election campaign, Canadian researchers were left to wonder how that respect might translate into dollars and cents.

The answer, unveiled Tuesday in the form of the Trudeau government’s first budget, is clearly directed at bolstering basic research. With increases aimed at both university and federal labs, the budget represents a marked shift away from the Harper government’s strong emphasis on science funding tied to commercial applications and industrial partnerships.

As expected, the government has increased funding for the three granting councils that funnel federal dollars to university researchers across the country in the areas of health, natural and social sciences. After years of relatively flat budgets while the Conservatives directed money toward large, signature projects and infrastructure, science advocates were urging the government to provide more support to individual researchers who are struggling to maintain their programs day to day.

A $46-million increase was already on the books based on the last budget of the outgoing Conservative government. The new budget augments that to $141million, including $19-million to help cover the so-called indirect costs that universities must meet to support scientific research on their campuses. That translates into 4- to 6-per-cent increases for the granting councils above their 2015 operating level, the largest step-up in a decade.

“It’s an important step towards getting us back to globally competitive research levels,” said Paul Davidson, president of Universities Canada, an umbrella organization that represents Canada’s university administrations.

Given Canada’s relatively low ranking in research intensity – defined as the amount of money spent on research and development as a percentage of gross domestic product – the government’s increases still have a long way to go to make up for lost ground, but the budget’s direction was generally greeted with optimism by scientists and research advocates alike.

“To me, it says all the right things and it’s money on the table,” said Kristin Baetz, a researcher at the University of Ottawa and president of the Canadian Society for Molecular Biosciences.

Representatives of the college sector, which benefited from the previous government’s support of applied science, were more cautious about the shift.

“This budget is definitely focused on discovery research. … None of that [money] is set aside for the applied research that colleges and polytechnics do,” said Robert South, director of public policy and advocacy for Polytechnics Canada. Noting that small and medium-sized businesses benefit when research can be turned into products or new processes, he added: “That is a weak spot in Canada’s innovation ecosystem.”

The budget also renewed funding for Genome Canada, with a $237.2-million infusion to fiscal year 2019-20. This will be crucial for supporting the organization’s broadening portfolio of funding programs that have increasingly had an impact beyond health and medicine. “There’s been a growing realization that this is a crosscutting science,” said Genome Canada’s president Marc LePage.

Yet the most intriguing and murmured-about aspect of the budget from researchers’ perspective is not about funding, It lies in the short passage that tasks the Minister of Science, Kirsty Duncan, with undertaking “a comprehensive review of all elements of federal support for fundamental science over the coming year.”

To Jim Woodgett, director of Toronto’s Lunenfeld-Tanenbaum Research Institute, this means the government is planning to step back and take a hard look at the rather complex bureaucratic apparatus that funds research in Canada. For several decades now, successive governments have made their mark by piling new elements onto the system. The Liberals now seem ready to reevaluate.

“It’s a good time to do this, and should lead to better co-ordination of what has become a grab bag of unnecessarily bespoke structures that are often overlapping,” Dr. Woodgett said.

The review may allow the government to tackle other issues bubbling in the background, such as the need to boost and improve access to supercomputer resources that are used by scientists across the country. But it also suggests that some of the organizations and entities that make up Canada’s increasingly balkanized science funding landscape are heading for some sort of consolidation with potential winners and losers in the process.


This article was written by Ivan Semeniuk from The Globe And Mail and was legally licensed through the NewsCred publisher network.