12 Thoughts About The Budget

Well, the federal budget dropped this week. Pundits seem to be in agreement that the overall budget is long on style and short on substance – at least so far as dollars are concerned (Coyne, Wells, Hébert). To some degree this is true on the innovation and research policy front, though there’s a lot to unpack. 

On the innovation and skills side, there’s a lot to like in the budget – there are a lot of details yet to come, but the potential is encouraging. In fact, I’m a little concerned that this plan may be too ambitious.

Too much ambition is definitely not a problem on the research side. This budget is very thin on research. Actually, it goes beyond thin into strange. We’ll need to spend some time figuring things out.

For a much more complete overview of the implications for the sector, I highly recommend the analysis from Alex Usher and his associates at HESA (.pdf here). This post is going to be more of a personal set of ideas and highlights. Here are 12 thoughts about the budget:

  1. Innovation and Skills Plan. Instead of an “Innovation Agenda”, we are presented with the “Innovation and Skills Plan”. The budget does a pretty good job of laying out what this plan looks like, how the pieces are supposed to fit together, and it even manages to plausibly link it to middle class success. (Note for those of you following along at home: I found Table 1.1 on p. 46 really helped me understand how all the pieces are supposed to fit together.)
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  3. Skills. Overall, I think the government did some very good work here. Full marks for working with the province through Labour Market Transfer Agreements – new money and collaborative reform rather than a unilateral federal program is tougher but the right thing to do. Changes to student financing seem like a positive step (though HESA knows much more about this than I).
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  5. FutureSkills Lab. As recommended by the Minister’s growth council, the government is allocating $225M over four years to establish a new organization to “support skills development and measurement in Canada”. I’m still not clear on how this isn’t already ESDC’s role, but sometimes a new organization can bring fresh thinking to an issue. This organization has a mandate to identify skills needed, explore innovative ways to develop them, and perform analysis and evaluation. Thankfully, the program doesn’t kick in until next fiscal year, so there is time to work out the details. It would be GREAT if we could get this right (fingers crossed).
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  7. Brief aside on program development.  We could do much better on program development in this country, and maybe (hopefully) #futureskillslab will get this right. At Mitacs we embraced a form of ‘rapid iterative prototyping’ for program development. We developed ideas, designed small-scale pilots, and then tested them. Many of them fail (don’t tell anyone from Mitacs I told you this). Others had success but didn’t have a clear path to growth or sustainability. A few made it to fully-fledged programs and have demonstrated enormous success (more on that in a minute).

     

    We need program development sandboxes to try out policy ideas. But – and THIS IS THE IMPORTANT PART – we also need mechanisms to evaluate their impact and then scale them up or shut them down. It would be great if this fail-fast/rapid iterative prototyping approach to program design could be embedded in the new initiatives announced in this week’s budget.

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  9. Mitacs. I’m completely biased, but I’m going to simply come out and say it: I’m thrilled for the investment in Mitacs – $221M over five years. Having spent so many years talking to students and companies who used the programs, I deeply believe graduate research internships confer enormous benefits to students and encourage a culture of research in many small and medium sized Canadian companies. The government, universities, and community should take pride in having supported the growth of such a successful program – a global pioneer in the field (/end_proud_rant).
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  11. Youth. I’m also encouraged by measures to increase youth engagement with STEM – particularly through the $10.8M in NSERC’s PromoScience Program. This is an easy investment to overlook, but building STEM literacy and interest in K-12 education makes a lot more sense to me than simply teaching kids to code (wait, what? Right – there’s also $50M in the budget to teach kids to code). All kids, regardless of what careers they pursue or what disciplines they study, will benefit from the critical thinking and fact-based inquiry provided by good STEM experiences in elementary and secondary schools. (Disclosure: I’m a volunteer board member with the great organization Let’s Talk Science which has received PromoScience funding).
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  13. Innovation. Right, generally I think this is pretty good. As I referenced in my last post, innovation tends to get confused with industrial strategy – a point made explicit here when the Budget outlines the sectors the government is backing through “big bets”: advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences and clean resources. But it also gets into some real innovation policy around program review, venture capital, procurement and more. New programs don’t involve significant new funding (apart from last year’s funding for clusters, now super-sized). But maybe this is a good thing if it means programs have a chance to develop, iterate, evaluate and terminate/scale (see #4, above)
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  15. New Innovation Programs. Here’s where I worry about ambition, but am excited about possibility. After years of looking longingly at other countries’ successful innovation programs, we’re finally going to get a couple of our own. Innovative Solutions Canada is going to get $50M to leverage procurement for innovation. More importantly, it will be modeled after the US Small Business Innovation Research (SBIR) program. This would be great – SBIR is often cited as a major driver of American innovation and ingenuity. I could do 12 thoughts on SBIR (and maybe I will, he threatened), but it will be hard to get right given our lack of scale and purchasing power (we simply don’t have anything like US Departments of Energy, Defense or NASA).

     

    The same will be true for the Impact Canada Fund – which will “focus and accelerate” efforts to solve big challenges. This kind of ‘mission-driven’ research has long been hailed as an innovation-engine based on longing glaces at DARPA and NASA. The fund will get $75M for two years of effort on clean technology (better hurry up!) and $300M over 11 years (whoa, slow down!) for work on Smart Cities. There is a ton of potential in this kind of program, but the devil is SO SO SO in the details of implementation. The program will need to strike the right balance between focus and micro-management – here, the DARPA model should be instructive.

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  17. Superclusters. Not a lot to say here. $950M of already-committed money, details are coming later in spring, only $50M allocated to be spent this year, followed by $250M annually and $150M in the last year of the initiative (2021-22). Not a lot of mystery in the identities of the superclusters: the six areas of focus listed in #7 plus infrastructure and transportation are listed as examples of the sort of areas. This is tricky stuff.  Given the amount of money involved, there will be no shortage of advice from potential recipients.
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  19. Innovation Canada and Program Review. This could be a big deal. A new platform led by Innovation, Science and Economic Development Canada, Innovation Canada will potentially have an enormous mandate. It will lead the creation of economic growth strategies, conduct a review of all business innovation programs across all government departments (including SRED), and will become a “one-stop shop for Canada’s innovators”. I feel like I’ve heard this before. Unlike the NRC’s Concierge, however, if this were done properly it could actually work. Hopefully the thinking will be guided by the still-relevant Jenkins report on federal support to R&D (actually, that report seems to have its fingerprints all over this budget). One of the key recommendations of that report was the creation of an Industrial Research and Innovation Council that would become the common service platform for all business innovation support programs. It was a good idea then and it’s a good idea now. As with so much here – the devil will be in the details. Will review lead to the consolidation of innovation programs under the administration Innovation Canada? Or will it develop as a true platform that simply serves to connect them with users through a common access point. So much potential here.
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  21. National Research Council. Good news: there is a plan to make a plan. Yes, the Government will undertake a review of the NRC in 2017. Not much to go on here, though I think it’s notable that the government wants to “assess how the Council can best support the Innovation and Skills Plan” as well as support “mission-driven, breakthrough research in collaboration with the new Impact Canada Fund”. I know that all this might simply be budget branding and positioning, but it seems to me that the NRC and Canadians would be best served if it were able to first establish its core research mandate rather than (once again) reorient towards the new innovation plan of the government of the day.  I truly, deeply want the NRC to find its feet and reestablish itself as a preeminent institution for Canadian research.
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  23. Whither Research? Honestly, what is going on here? Reading through the budget yesterday, I was thinking there were some good ideas, interesting approaches, the usual sprinkling of direct research funding to a few specific organizations, and then… where are the granting councils? CFI? Genome Canada? Did I miss them? Do they have their own section? It slowly dawned on me – and then it dawned on Twitter – they’re not there. Anywhere. Any of them – no NSERC, CIHR, SSHRC. No CFI. No Genome Canada. Nowhere.

     

    I can’t overstate how profoundly weird this is. I know there was some socializing about reduced expectations for research dollars in the last few months. And yes, the granting councils got a bit of an extra bump last year. But nothing? In a budget all about “Innovation and Skills”?Look – one might argue that the Government is waiting for the results of the Naylor panel before committing funding. One might argue that there simply isn’t any money and so there’s no funding to be had. One might even argue that the councils already have precisely the right level of funding and don’t deserve any more. None of these things are true – but still the government could take these strategies, but it doesn’t. The budget simply ignores them.

     

    Boy oh boy, this is not going to go over well. For nine years the research community largely embraced a narrative that small, below-inflation increases in funding were ideologically driven by science-hating Conservatives. Therefore, once the Conservatives were removed, research would be back in business and falling success rates, shrinking grants and financial pressure would be alleviated. Dare I say, the community was encouraged in this impression by the Liberal platform – by the fact that two ministers have the word “Science” in their title. Last year’s modest increases were pitched as a “down payment”. And here, the promise of an “innovation budget”. And yet. This will feel like a betrayal.

     

    I have long maintained that we should not conflate research and innovation – that they are not the same, that there isn’t a direct correlation between them. But an innovative economy is still built on a strong foundation of research and development. And funding for basic science in Canada has been stagnant for a decade. At this moment, when Canada is uniquely attractive to highly qualified researchers from around the world, the best we can do is rebrand a recruiting tool like Canada Excellence Research Chairs but without the granting council increases that will support their research? I don’t get it.

     

    There are some targeted investments. The AI consortium out of Toronto, Waterloo, Montreal and Edmonton was awarded $125M (which, oddly, is the only item in the science and innovation spend that is allocated to this fiscal year, 2016-17 – better hurry). There are modest but important bits of funding for Stem Cell Network ($6M for one year), Canadian Space Agency ($80M over five years), Institute for Quantum Computing ($10M over two years), Community and College Social Innnovation Fund ($10M over two years) and CIFAR ($35M over five years). With all due respect to these institutions, apart from the AI windfall, this is pretty thin gruel for Canadian research.

     

    Maybe I’m missing something. Maybe I’m wrong about the Naylor report and it will soon be released instead of buried when the sun comes out. Maybe it will call for transformative funding and the government will be eager to comply. Maybe.

     

    But in the meantime, things look pretty grim.

 

 

One thought on “12 Thoughts About The Budget”

  1. Great post, Rob.
    I was in the budget lock-up and there were lots of surprised/ unhappy people in there. The absence of granting council funding is downright weird.
    But if its any consolation there was also $0 for nature conservation
    http://naturecanada.ca/news/press-releases/nature-canada-congratulates-federal-government-for-its-commitments-to-nature-but-no-funding-to-conserve-biodiversity-is-a-missed-opportunity/
    (absurdly long press release headers is what you get when you want to be nice, but….).
    Eleanor

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