Proposed 2013 Federal budget seeks return to balanced budgets

The following is a brief analysis of research highlights from the 2013 budget document. The precise impacts that will arise from the budget may not be known at this time. Throughout the year, CAP will continue to monitor government policy that may affect physics in Canada. 

The full budget can be found at in English and in French.

Dr. Daniel Banks 
CAP’s Director of Science Policy


Proposed 2013 federal budget seeks return to balanced budgets

The proposed 2013 federal budget seeks to return to balanced budgets by 2015-16 by holding the line on both spending and taxes in many areas. The budget relies on increased revenues from economic growth to reduce the deficit.

Despite restraint on new spending, the budget identifies “investing in world-class research and innovation” as one of five priority areas for spending. Much of the spending on research is being funded out of savings in administrative efficiencies at the granting councils identified in last year’s budget. NSERC’s total budget is thus unchanged despite funding of $15 million for the College and Community Innovation Program and research partnerships.

The Canada Foundation for Innovation’s (CFI) allocation of $225 million in this budget is being funded out of interest on funds allocated to CFI in past years. Of note is that some of this allocation is for long-term operations of the CFI, signalling an intention for a long term role for the CFI. Other uses for the CFI funding include the Leading Edge Fund, supporting cyber-infrastructure and other “evolving priorities” not yet identified.

Additionally, $20 million over three years is being provided for “credit notes” as a pilot project to be delivered through NRC Industrial Research Assistance Program (IRAP). The “credit notes” are for “small and medium-sized enterprises [to] access research and business development services at universities, colleges and other non-profit research institutions of their choice.” This initiative is consistent with recommendation #4 in CAP’s submission to House of Commons Finance Committee.

With respect to the National Research Council (NRC), the $121 million over two years to facilitate the restructuring appears to be a continuation of the 2012 level of funding. The budget also includes a statement about the restructuring itself:

The NRC is currently undergoing a fundamental transformation in how it does business. Work is well underway to better position the NRC to provide businesses with technical services, support for applied research and development projects, access to sector-specialized laboratories and testing facilities, and connections to leading applied research organizations around the world. This new approach will allow innovative firms to benefit from the NRC’s world-class capabilities, consistent with the recommendations of the Expert Panel, and was developed in consultation with businesses, universities and colleges. … The Government will announce further details about the evolution of the new NRC in the coming year.

With respect to AECL, the $141M mentioned in the budget does not include all federal allocations to AECL. No major changes to AECL’s overall budget for this year are expected.

The budget also commits to reviewing the Indirect Costs Program in consultation with the post-secondary sector, although there are no changes to the program this year.

The following is the budget’s summary for “Investing In World-Class Research and Innovation”

Supporting Advanced Research

  • $37 million in new annual support for research partnerships with industry through the granting councils, including $12 million to enhance the College and Community Innovation Program.
  • $165 million in multi-year support for genomics research through Genome Canada, including new large-scale research competitions and participation by Canadian researchers in national and international partnership initiatives.
  • $225 million to be used by the Canada Foundation for Innovation to support advanced research infrastructure priorities and sustain the long‑term operations of the Foundation.

Pursuing a New Approach to Supporting Business Innovation

  • $121 million over two years to invest in the strategic focus of the National Research Council to help the growth of innovative businesses in Canada.
  • $20 million over three years to help small and medium-sized enterprises access research and business development services at universities, colleges and other non-profit research institutions of their choice.
  • $325 million over eight years to Sustainable Development Technology Canada to continue support for the development and demonstration of new, clean technologies.
  • $20 million over two years to the Canada Revenue Agency to improve the predictability and enhance enforcement of the Scientific Research and Experimental Development tax incentive program.

Enhancing Canada’s Venture Capital System

  • $60 million over five years to help outstanding and high-potential incubator and accelerator organizations expand their services to entrepreneurs.
  • $100 million through the Business Development Bank of Canada to invest in firms graduating from business accelerators.
  • Promoting an entrepreneurial culture in Canada through new Entrepreneurship Awards.
  • $18 million over two years to the Canadian Youth Business Foundation to help young entrepreneurs grow their firms.