Budget 2017: Fueling Innovation with Skills Training, Superclusters, and Science

April 17, 2017

By: Joelle Thorpe, Ph.D., Mitacs Canadian Science Policy Fellow 

The views expressed herein are those of Dr. Thorpe and are not necessarily shared by any organizations with which she is affiliated.

The Government of Canada clearly understands the importance of innovation. In fact, the word “innovation” itself appears more than 250 times in Budget 2017—not an easy feat considering the document, released on March 22, is a mere 280 pages in length. It is true, as is stated more than once in Budget 20171, that Canadians need to be prepared for the changing workplace. Encouraging and facilitating Canadian innovation is certainly a smart strategy to remain competitive globally, given that “innovation is what allows Canadians to adapt to change and prepare for the future.”2  As any enthusiast of evolutionary theory knows, being adaptable to change is an exceptionally effective life strategy! So, I agree that an innovative nation will be a strong and competitive nation, leading (I hope) to prosperous lives for many Canadians. Budget 2017 proposes several ways to support and stimulate innovation in Canada: increase the number of skilled workers, improve market access for innovative products, and invest in research and development (R&D).

Training innovators for the “real world” 

Budget 2017 proposes some measures to make it easier for all Canadians to increase their education and broaden their skills and to stimulate young Canadians’ interest in science, technology, engineering, and mathematics (STEM). These investments, in theory, should help to remove one of the bottlenecks to innovation: lack of skilled workers. Investments to encourage Canadians to go back to school to upgrade their skills or gain entirely new skills to remain competitive in the workforce include:
  • $59.8 million over 4 years and $17 million per year thereafter has been proposed to improve access to student loan programs for part-time students,
  • $107.4 million over 4 years and $29.3 million per year after that is dedicated for extending eligibility for Canada Student Grants to students with dependent children,
  • $132.4 million over 4 years plus $37.9 million per year subsequently has been included in Budget 2017 for improved Employment Insurance (EI) benefits so that Canadians can continue receiving EI after returning to school, and 
  • $287.2 million over 3 years has been proposed to start a pilot project with the aim of making it easier for adult learners to be eligible for Canada Student Loans and Grants. 
Current and future students may also benefit from some investments proposed in Budget 2017. New university graduates sometimes struggle to find employment partly because they lack the experience and skills that many employers want to see. One solution to this problem is for students to gain “real world” experience outside of academia during university through co-op programs or other internships. Budget 2017 has indicated an investment of $221 million over 5 years in Mitacs, a not-for-profit organization that connects university students including graduate students and post-doctoral fellows with businesses and government players so that students can gain experience outside the classroom and, ideally, find stable employment after completing their degrees or training. The Government of Canada (GoC) also wants to see more Canadians gain skills in STEM and is encouraging this by providing $10.8 million over 5 years to the PromoScience Program, which runs hands-on STEM activities for youth to fuel interest in STEM.

All in all, it seems that Canadians interested in furthering their education and students interested in gaining work experience will be positively impacted by Budget 2017; in turn, the number of skilled workers in Canada (particularly those in the STEM fields) may increase, possibly leading to a more innovative workforce.

Harnessing innovation with multisector partnerships 

In addition to a lack of skilled workers, another bottleneck to innovation is market access for exports. Some items in Budget 2017 may help to remove this bottleneck in part by encouraging the formation of superclusters and the procurement of goods and services provided by Canadian innovators. Superclusters, like those in Silicon Valley, are “dense areas of business activity that contain large and small companies, post-secondary institutions, and specialized talent and infrastructure.” By encouraging knowledge sharing and strengthening connections among businesses, post-secondary institutions, and research institutions, the goal of superclusters is to boost private sector R&D that has commercial outcomes and applications. To stimulate the formation of superclusters in Canada, Budget 2017 proposes $950 million over 5 years (already promised in Budget 2016 and the Fall Economic Statement) to be disbursed on a competitive basis with a focus on advanced manufacturing, agri-food, clean technology, digital technology, health- and bio-sciences, clean resources, and infrastructure and transportation. 

In order to support Canadian innovators, Budget 2017 also proposes up to $50 million to create Innovative Solutions Canada. This new program will dedicate a portion of federal department funds to the procurement of goods and services (including R&D) from Canadian innovators. Not only will this allow the government to take advantage of the most cutting-edge R&D, but it will also provide business and feedback to Canadian innovators.

The GoC appears to be trying to make it easier to be a Canadian innovator by proposing measures to stimulate the creation of innovation “hubs” where universities and businesses work together to bring innovative R&D products to market and to encourage the use of Canadian innovations by government departments and agencies.

Support for science that paves the way for innovation 

A budget so clearly focused on innovation cannot ignore funding for science, because the third (and arguably most obvious) bottleneck to innovation is investment in R&D. Fortunately, Budget 2017 includes some funding provisions for targeted areas of academic and government research. Budget 2017 has allocated funds to the:
  • Stem Cell Network ($6 million), 
  • Canadian Space Agency ($80.9 million over 5 years), 
  • Institute of Quantum Computing ($10 million over 2 years), and 
  • Canadian Institute for Advanced Research ($35 million over 5 years). 
Budget 2017 also reflects a desire to make Canada the world leader in the field of artificial intelligence (AI); $125 million will be allocated to create a Pan Canadian Artificial Intelligence Strategy to increase the number of researchers studying AI and deep learning in Canada and to encourage investment by companies interested in AI and its applications. In another attempt to attract and retain top scholars, Budget 2017 proposes $117.6 million over 8 years (from the already existing Canada Excellence Research Chairs program) to support 25 new Canada 150 Research Chairs.

Budget 2017 also includes some considerations for federal science; $59.6 million will be provided to the National Research Council, which provides R&D services such as facilities and scientific expertise to Canadian businesses. Moreover, Natural Resources Canada and Transport Canada will receive $229 million over 4 years for R&D in clean energy and clean transportation; Natural Resources Canada, Agriculture and Agri-Food Canada, and Fisheries and Oceans Canada will receive $200 million over 4 years for clean technology research; and research on climate change and soil and water conservation will be supported through $70 million over 5 years provided to Agriculture and Agri-Food Canada.

These proposed investments suggest that scientific research in Canada is being guided toward a few specific fields that have obvious links to innovation. Given the theme of Budget 2017, perhaps this should not be surprising. Evidently, the GoC is trying to stimulate innovation in Canada by making it easier for Canadians to re-educate themselves and gain experience so they can participate in the workforce more fully, by encouraging the development of innovation hubs, and by funding science research that leads to new products that can be commercialized. These are all important aspects of innovation; however, there is one important piece of the innovation pie missing, which could disproportionately impact young scientists in Canada.

A missed opportunity?

Budget 2016 arrived to much fanfare from the academic science world—with funding boosts to the Tri-Council Agencies (NSERC, CIHR, and SSHRC) to the tune of $95 million per year on top of the annual $46 million provided in Budget 2015. This increase in funding signalled a government that was rededicated to basic science in Canada. Perhaps because of this renewed support for the Tri-Council Agencies in Budget 2016, many have expressed surprise that Budget 2017 did not mention them at all. What does this mean?

Fundamental science (i.e., research coming out of universities that doesn’t necessarily have an immediately apparent application) is a prerequisite for innovation. The GoC presumably recognizes this, because in Budget 2017 it predicts that “Canada will be on the leading edge of discovery and innovation, with more ground-breaking research being done here at home, and more world class researchers choosing to do their work at Canadian institutions.” Funding for basic science leads to innovative outputs indicated by patents in the U.S., and in Canada it has supported the discovery of insulin and has resulted in more intelligent AI systems that use deep learning modelled on the human brain. Without a doubt, university researchers whose labs and trainees depend on NSERC, CIHR, or SSHRC help drive innovation in Canada. Unfortunately, academic researchers’ contributions to innovation are sometimes downplayed when we focus on short-term solutions for increasing innovation; in many cases, it can take years before the applications of basic research become clear.

A lack of funding for university research may disproportionately impact early career researchers (graduate students and post-doctoral fellows) looking to gain a footing in their academic careers. A project recently launched to explore the impact of changes to science funding in the U.S. has suggested that because far more undergraduates, graduate students, and post-doctoral fellows are supported by government science funding compared with established faculty members, it is these groups—the trainees—who will likely be most influenced by cuts to research funding. Although this is an assessment of the American system, it would not be surprising if a similar trend existed in Canada. Of course, those scientists in fields related to AI and other specifically named industries may feel optimistic after reading Budget 2017. But there are likely others who are feeling concerned about whether the absence of Tri-Council Agencies in Budget 2017 should be taken as a sign of possible future funding freezes or decreases that could negatively impact young scientists striving for academic careers in Canada.

Based on Budget 2017, it appears that the GoC is aiming to drive innovation in Canada. Given how the Tri-Council Agencies contribute to innovation via support to basic research it is curious that they weren’t mentioned in the latest budget. Funding academic research is a win-win-win for all Canadians: it can help early career scientists reach success on the tenure track, it can increase the number of openings for students wanting to study STEM, and it can lead to unimaginable innovations that will enable Canada to remain competitive in the global economy. What have we got to lose by supporting basic research in Canada?

A final note on evidence-based decision making

The current GoC has been promoting its evidence-based decision making approach ever since coming into power in 2015. Budget 2017 is no exception, including a proposed $2 million annual budget for the new Chief Science Advisor to support the use of scientific evidence in government decision making. Last June, a review of fundamental science funding was commissioned in order to gather input from relevant stakeholders about how funding for fundamental science is working in Canada and where improvements could be made. Perhaps the Tri-Council Agencies were absent from Budget 2017 because this review will provide evidence to guide government decisions about funding for fundamental science in Canada. Time will tell.


1For what it’s worth, the word “innovation” appears 72 times in the 271-page Budget 2016, 174 times in the 528-page Budget 2015, and 110 times in the 427-page Budget 2014. “Science(s)” appears 60 times in Budget 2017, 56 times in Budget 2016, 76 times in Budget 2015, and 31 times in Budget 2014.

2Page numbers to all Budget items discussed in this article can be obtained by contacting the blog author.

Joelle Thorpe spent many years studying many things, including hormones, parental behaviour, stress, and reproduction in furry critters. She recently stepped away from the lab bench to enter the exciting world of science policy. When she's not busy thinking (and sometimes writing) about how science and policy intersect, Joelle can be found with her nose in a good book. Connect with her on Twitter: @JoelleThorpe.

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