This summary was prepared by:
Daniel Banks, PhD, MBA
President, TVB Associates Inc.
Consultant for Science Policy, Strategy, and Communications
Member of the CAP Science Policy Committee
Overview:
Physicists working in quantum research and development are sure to be pleased with $360M announced in the budget to launch a National Quantum Strategy, which aims to amplify Canada’s significant strength in quantum research, as well as related quantum technology and innovation. Others working in photonics may benefit from $90M to retool and modernize the Canadian Photonics Fabrication Centre at the National Research Council. Those in artificial intelligence will welcome $444M for renewal of the Pan-Canadian Artificial Intelligence Strategy for 10 years. Notably, over $200M of this amount is for programs that will be delivered by CIFAR.
By far, the biggest new investments in research and innovation this year are in the two areas of clean energy technologies and of life sciences and technologies. Physicists working in clean energy technologies may benefit indirectly from over $5B in new funding invested in the Strategic Innovation Fund’s Net Zero Accelerator. Since this Fund and several other initiatives in the Budget encourage industry to implement projects that support clean energy technologies through this Fund, demand for research that enables these technologies is likely to continue to remain strong.
While COVID-19 has driven the focus on life sciences, not all of the new investments are directly related to the pandemic. Of over $2B in new investments in life sciences, three investments are mostly likely to be of interest to biophysicists: (1) The Canada Foundation for Innovation (CFI) will receive $500M for funding of bio-science infrastructure. (2) The tri-councils will receive $250M for a new biomedical research fund. As a tri-council fund, it is clearly positioned to encourage interdisciplinary collaboration and physicists working in such collaboration could access these funds. (3) The budget provides $400M for Pan-Canadian Genomics Strategy, including $137M for programs delivered by Genome Canada.
In fact, these are the only new funds provided to either of the two agencies that physicists most rely on—the CFI and the Natural Sciences and Engineering Research Council (NSERC)—except for a $47M investment in the NSERC to applied research and development projects led by Canadian businesses in collaboration with colleges, CEGEPs, and polytechnics.
Budget 2021 provides some good news for students and post-docs in research fields. Mitacs will receive over $700M over five years to create at least “85,000 work-integrated learning placements,” through its internship programs that focus on research-based innovation in industry. Students in all science and technology fields could benefit from these on-the-job learning opportunities. The budget also pledges to adjust the tax code to enable post-docs to earn RRSP room on their income.
While these targeted investments may be timely and of strategic value, it is clear that Canada’s Fundamental Science Review in 2017 is no longer driving the budget decisions. This review led to a large focus on science in the 2018 budget. The last budget in 2019 (there was no budget in 2020) made some smaller steps that could be connected back to the Review. The Review recommended a new approach for funding so-called “third-party science and research” organizations, such as Genome Canada, Mitacs, and Brain Canada, that operate outside the jurisdiction of the granting agencies. Budget 2019 announced that the Minister of Science would create a new “Strategic Science Fund” that would rationalize funding for the growing number of such organizations. However, two years later, no such Strategic Science Fund has been established, and Budget 2021 continues ad hoc investments in Genome Canada and Mitacs. Furthermore, Canada no longer has a Minister of Science to deliver on that commitment.
Related excerpts from the Budget
Launching a National Quantum Strategy
Quantum technology is at the very leading edge of science and innovation today, with enormous potential for commercialization. This emerging field will transform how we develop and design everything from life-saving drugs to next generation batteries, and Canadian scientists and entrepreneurs are well- positioned to take advantage of these opportunities. But they need investments to be competitive in this fast growing global market.
Budget 2021 proposes to provide $360 million over seven years, starting in 2021-22, to launch a National Quantum Strategy. The strategy will amplify Canada’s significant strength in quantum research; grow our quantum-ready technologies, companies, and talent; and solidify Canada’s global leadership in this area. This funding will also establish a secretariat at the Department of Innovation, Science and Economic Development to coordinate this work.
The government will provide further details on the rollout of the strategy in the coming months.
Revitalizing the Canadian Photonics Fabrication Centre
Canada is a world leader in photonics, the technology of generating and harnessing the power of light. This is the science behind fibre optics, advanced semi-conductors, and other cutting-edge technologies, and there is a strong history of Canadian companies bringing this expertise to the world. The National Research Council’s Canadian Photonics Fabrication Centre supplies photonics research, testing, prototyping, and pilot-scale manufacturing services to academics and large, small and medium-sized photonics businesses in Canada. But its aging facility puts this critical research and development at risk.
Budget 2021 proposes to provide $90 million over five years on a cash basis, starting in 2021-22, to the National Research Council to retool and modernize the Canadian Photonics Fabrication Centre. This would allow the centre to continue helping Canadian researchers and companies grow and support highly skilled jobs.
Renewing the Pan-Canadian Artificial Intelligence Strategy
Artificial intelligence is one of the greatest technological transformations of our age. Canada has communities of research, homegrown talent, and a diverse ecosystem of start-ups and scale-ups. But these Canadian innovators need investment in order to ensure our economy takes advantage of the enormous growth opportunities ahead in this sector. By leveraging our position of strength, we can also ensure that Canadian values are embedded across widely used, global platforms.
Budget 2021 proposes to provide up to $443.8 million over ten years, starting in 2021-22, in support of the Pan-Canadian Artificial Intelligence Strategy, including:
- $185 million over five years, starting in 2021-22, to support the commercialization of artificial intelligence innovations and research in Canada.
- $162.2 million over ten years, starting in 2021-22, to help retain and attract top academic talent across Canada—including in Alberta, British Columbia, Ontario, and Quebec. This programming will be delivered by the Canadian Institute for Advanced Research.
- $48 million over five years, starting in 2021-22, for the Canadian Institute for Advanced Research to renew and enhance its research, training, and knowledge mobilization programs.
- $40 million over five years, starting in 2022-23, to provide dedicated computing capacity for researchers at the national artificial intelligence institutes in Edmonton, Toronto, and Montréal.
- $8.6 million over five years, starting in 2021-22, to advance the development and adoption of standards related to artificial intelligence.
Supporting Innovation and Industrial Transformation
Since its launch in 2017, the Strategic Innovation Fund has been helping businesses invest, grow, and innovate in Canada. Through its efforts to help businesses make the investments they need to succeed, the fund is well-placed to support growth and the creation of good jobs across the Canadian economy—both now and in the future.
Budget 2021 proposes to provide the Strategic Innovation Fund with an incremental $7.2 billion over seven years on a cash basis, starting in 2021-22, and $511.4 million ongoing. This funding will be directed as follows:
- $2.2 billion over seven years, and $511.4 million ongoing to support innovative projects across the economy—including in the life sciences, automotive, aerospace, and agriculture sectors.
- $5 billion over seven years to increase funding for the Strategic Innovation Fund’s Net Zero Accelerator, as detailed in Chapter 5. Through the Net Zero Accelerator the fund would scale up its support for projects that will help decarbonize heavy industry, support clean technologies and help meaningfully accelerate domestic greenhouse gas emissions reductions by 2030.
The funding proposed in Budget 2021 will build on the Strategic Innovation Fund’s existing resources, including the $3 billion over five years announced in December 2020 for the Net Zero Accelerator. With this additional support, the Strategic Innovation Fund will target investments in important areas of future growth over the coming years to advance multiple strategic objectives for the Canadian economy:
- $1.75 billion in support over seven years would be targeted toward aerospace in recognition of the longer-lasting impacts to this sector following COVID-19. This is in addition to the $250 million Aerospace Regional Recovery Initiative, outlined in section 4.2, providing a combined support of $2 billion to help this innovative sector recover and grow out of the crisis.
- $1 billion of support over seven years would be targeted toward growing Canada’s life sciences and bio-manufacturing sector, restoring capabilities that have been lost and supporting the innovative Canadian firms and jobs in this sector. This is an important component of Canada’s plan to build domestic resilience and improve long-term pandemic preparedness proposed in Chapter 1, providing a combined $2.2 billion over seven years.
$8 billion over seven years for the Net Zero Accelerator to support projects that will help reduce Canada’s greenhouse gas emissions by expediting decarbonization projects, scaling-up clean technology, and accelerating Canada’s industrial transformation. More details are in Chapter 5.
Strengthening Canada’s Bio-manufacturing and Life Sciences Sector
Growing Canada’s life sciences and bio-manufacturing sector is a priority that goes beyond responding to COVID-19. This is a growing sector that supports thousands of good, middle class jobs.
Budget 2021 proposes to provide a total $2.2 billion over seven years towards growing a vibrant domestic life sciences sector. This support would provide foundational investments to help build Canada’s talent pipeline and research systems, and support the growth of Canadian life sciences
firms, including:
- $500 million over four years, starting in 2021-22, for the Canada Foundation for Innovation to support the bio-science capital and infrastructure needs of post-secondary institutions and research hospitals.
- $250 million over four years, starting in 2021-22, for the federal research granting councils to create a new tri-council biomedical research fund.
- $92 million over four years, starting in 2021-22, for adMare to support company creation, scale up, and training activities in the life sciences sector.
- $59.2 million over three years, starting in 2021-22, for the Vaccine and Infectious Disease Organization to support the development of its vaccine candidates and expand its facility in Saskatoon.
- $45 million over three years, starting in 2022-23, to the Stem Cell Network to support stem cell and regenerative medicine research.
Several other initiatives proposed in Budget 2021 also include targeted support for the life sciences and bio-manufacturing sector. These measures form an important part of the government’s investment in the sector and include:
- $1 billion on a cash basis over seven years, starting in 2021-22, of support through the Strategic Innovation Fund would be targeted toward promising domestic life sciences and bio-manufacturing firms. This is a key component of the total investment in the Strategic Innovation Fund proposed in Chapter 4.
- $250 million over three years, starting in 2021-22, to increase clinical research capacity through a new Canadian Institutes of Health Research Clinical Trials Fund, as proposed in Chapter 4.
- $50 million on a cash basis over five years, starting in 2021-22, to create a life sciences stream in the Venture Capital Catalyst Initiative, as part of a larger venture capital investment proposed in Chapter 4.
These investments would be reinforced by other measures proposed in Budget 2021, including: the Pan-Canadian Genomics Strategy; the Pan-Canadian Artificial Intelligence Strategy; the expansion of the Industrial Research Assistance Program; support to help firms tap intellectual property expertise; efforts to upskill and attract workers; as well as the expansion of work-integrated learning opportunities. These investments offer support to firms at various stages of maturity, and allow Canada’s research and development efforts to be more closely connected to commercialization and business development supports. More details can be found in Chapters 3 and 4.
Launching a Pan-Canadian Genomics Strategy
Genomics research is developing cutting-edge therapeutics and is helping Canada track and fight COVID-19. Canada was an early mover in advancing genomics science and is now a global leader in the field. A national approach to support genomics research can lead to breakthroughs that have real world applications. There is an opportunity to improve Canadians’ health and well- being while also creating good jobs and economic growth. Leveraging and commercializing this advantage will give Canadian companies, researchers, and workers a competitive edge in this growing field.
Budget 2021 proposes to provide $400 million over six years, starting in 2021-22, in support of a Pan-Canadian Genomics Strategy. This funding would provide $136.7 million over five years, starting in 2022-23, for mission-driven programming delivered by Genome Canada to kick-start the new Strategy and complement the government’s existing genomics research and innovation programming.
Further investments to grow Canada’s strengths in genomics under the Strategy will be announced in the future.
Opportunities for Businesses and Young Workers Through Mitacs
Mitacs is a not-for-profit organization that connects young workers with innovative businesses for research and training opportunities. Mitacs focusses on supporting research-based innovation in industry and developing a talent stream of highly educated students and graduates through its internship programs.
These students bring cutting-edge scientific and technical knowledge from universities and colleges that will strengthen the innovation capabilities of industry. This combination of innovation and skill development for the next generation of leaders will help drive growth now and ensure long-term competitiveness and prosperity.
Budget 2021 proposes to provide $708 million over five years, starting in 2021-22, to Mitacs to create at least 85,000 work-integrated learning placements that provide on-the-job learning and provide businesses with support to develop talent and grow.
Postdoctoral Fellowship Income
For income tax purposes, postdoctoral fellows are generally not considered to be students. Thus, postdoctoral fellowship income generally does not qualify for the scholarship exemption from income tax. Although fully included in taxable income, and similar in nature to employment income, postdoctoral fellowship income does not currently qualify as “earned income” for the purpose of determining an individual’s contribution limit for a registered retirement savings plan (RRSP).
Budget 2021 proposes to include postdoctoral fellowship income in “earned income” for RRSP purposes. This would provide postdoctoral fellows with additional RRSP room in order to make deductible RRSP contributions.
This measure would apply in respect of postdoctoral fellowship income received in the 2021 and subsequent taxation years. This measure would also apply in respect of postdoctoral fellowship income received in the 2011 to 2020 taxation years, where the taxpayer submits a request in writing to the Canada Revenue Agency for an adjustment to their RRSP room for the relevant years.