HIGH FLYERS THINK TANK
Canada: A renewed commitment to research
by David Strangway
David Strangway is President and Chief Executive Officer of the Canada Foundation for Innovation. He was formerly President of the University of British Columbia and Acting President, Vice-President and Chair of the Geology Department at the University of Toronto. He joined NASA as Chief of the Geophysics Branch in 1970 and was responsible for the geophysical aspects of the US space agency's Apollo missions. In addition to serving on numerous scientific and academic committees, he has worked with more than 50 government, private-sector, and non-government organisations in a variety of capacities since 1971. He has received numerous awards and honours including being made an Officer of the Order of Canada in 1996 and being honoured with the NASA Medal for Exceptional Scientific Achievement in 1972.
I am very pleased to be here and to share with you my perception of the things that are happening within the Canadian context. I don't think it is any surprise to anybody that 'knowledge economy' is the catch-phrase of the day everywhere you go, and pretty well whichever country one attends. But in Canada there has been a remarkable set of statements made, and I would introduce my talk by some comments that were made by our now former Finance Minister and then some comments that were made at the Throne Speech, at the opening of parliament about a year ago, in terms of the Canadian position with respect to these activities.
Our Finance Minister, about a year and a half ago, made a very important public speech in which he identified the following:
- Canada to be among the top five OECD countries in R&D spending GERD/GDP
- Match Canadian universities commercialisation rate to that of comparable U.S. schools
- New venture capital investment in Canada to top three internationally
- Raise as many dollars per capita in IPO as on the U.S.
This was followed, shortly after, by the opening of parliament and then the Throne Speech which gave these commitments:
- By 2004-5 minimum level of R&D increase will be $1 billion per year
- By 2010, Canada to move to top five countries for R&D perfomance by at least doubling federal expenditures on R&D
- '...will help the private sector by
maintaining tax credits...and by working to commercialise discoveries made in
government and university labs'
Source: Red Book Platform Commitments Throne Speech (Jan 30/01) & Response (Jan 31/01)
We were no. 15 among the OECD countries. The latest data would suggest that Canada has increased from 1.6 to about 1.85 or 1.9 per cent of Gross Expenditures on R&D (GERD) to GDP, but there is a long way to go to get to the top. Today we would have to be approaching 3. Sweden was ranked no.1 at 3.85 per cent so you would almost have to double this activity in the Canadian context and it is a moving target. By 2010 undoubtedly that target will be even higher.
Canada is a federal country. I realise that Australia is also a federal country, and many others are, but let me describe briefly why this is central to the Canadian context. In 1867, when Canada was created, education had absolutely nothing to do with the central government. There is no minister, there is no ministry, no civil service, no structure in Ottawa that has anything to do with education in the country. Whether it is primary, secondary, tertiary, it is not an issue for Ottawa. It is an issue, of course, but in fact the minute the federal government talks the word 'education' they lose Quebec, no. 1, and then British Columbia goes shortly thereafter, and they simply cannot engage in and discuss the questions of education centrally. There are no structures that can even deal with it.
What that means is that the universities are entirely provincial institutions, and that the cheque comes from the Finance Minister of the province. It does not come from the federal government except indirectly. That means, then, that the core of university structures is independent of the federal government, and the one place where it can have an impact is through the research activities.
The federal government does transfer payments to the provinces, and the federal government's view is that it transfers them for the purposes of health care, post-secondary education and the welfare structure. But there is no division between these three categories, and so the provinces receive the money with absolutely no earmarks on it whatsoever. So you could say there is money that goes to the provinces for the purposes of post-secondary education, but because there is no earmarking or separating between these categories it is simply a cheque.
On the other hand, we have always had a tradition of the granting agencies, and so the federal government has always been a major funder of research. What seems to be happening now is that the provincial governments are trying very hard to maximise their involvement in the knowledge economy, and so in an interesting way the federal government does certain things and the provinces are actually beginning to try to make sure that they are not going to be left out of this process. We have this peculiar leveraging that is going on between the federal government and the provinces.
I know you are talking mainly about research priorities in this conference and in Australia in general, and I guess I make the point that we do not have a single process for setting research priorities. I don't think it would work in our structures.
We do not have a National Academy of Science. We have the Royal Society of Canada, but it has never had the mandate that you have with your Academies, although this is now changing. There is a position paper with respect to the innovation agenda and there is a commitment within it that, a year from now, we may end up with the equivalent of a National Academy of Science which would be in some senses owned by the Royal Society of Canada, the incipient Canadian Institute for Academic Medicine and the Canadian Academy of Engineering. I think these three bodies will end up with a significant federal payment to run a National Academy of Science, but it really does not function. So there is no outside body that has the same kind of influence that you have.
What I want to do is to divide into two categories the things that are happening with respect to research. The first is a series of activities that are designed within Ottawa for the purposes of reinforcing the institutions that perform the research. This is a new approach to things, because in the past it has always been institutions that are dealing with the researchers, but we are realising that if you are going to have large facilities and large equipment, if you are going to hire new faculty members in this rapid turnover and so on that is taking place, these are decisions that are actually made by the universities and teaching hospitals. They are not made by provincial governments, they are not made by federal governments. So the question is: can we reinforce and support the institutional structures, on the one hand, and support the researchers, on the other hand? These are two quite distinct activities, and there has been very little attention paid to the question of the institutional reinforcement, which is after all where the research is actually done, by and large.
The Canada Foundation for Innovation was established for the purpose of supporting infrastructure. We were very fortunate at the time that the Finance Minister, the Prime Minister and the Minister of Industry decided that some portion of the surplus should be set aside for the purposes of reinforcing the R&D activities in the country, and they set up the Canada Foundation for Innovation in 1997. They set us up as an arm's-length body for two reasons. One is that they wanted us to be independent and to be free of political influence. And the second reason they set us up is that when the Finance Minister was sitting on a surplus he could write a cheque and take it off the federal books, and we would have five years to spend it. That is a remarkable thing that was done, because they took the cash and put it in our bank account and said, 'We no longer have any authority with respect to this, because it is now written off the federal books.' So in a sense they took money in good times and put it aside for things that were important to be done over the next few years.
This cheque originally was for $800 million. Since then we have had another $200 million added. After that we have had another $1 billion added, and extended to 2005. (We were a sunset organisation; we were to go out of business in 2002. In fact, if we had not got new money I probably would not be here.) And then we were extended with another $1 billion to 2010. So overall we have received over $3 billion from the federal government and we have till 2010 to spend it, and we have no political intervention in the decision making process. We have a formal funding agreement, which is the purposes for which this is used, but beyond that there is no further involvement.
We only put 40 per cent into projects that pass our tests. That means the institutions the presidents or vice-chancellors of the institutions have to sign on the dotted line when they send us a proposal that they will find the remaining 60 per cent. That is a big challenge for them and obviously it has to be an institutional challenge, because you can't expect the individual researchers to find that kind of money. What has been happening is that the provincial governments have been putting another 40 per cent on the table, because they don't want to lose their institutions' capacity to get the first 40 per cent. And then the remaining 20 per cent is coming largely from the private sector or other organisations that raise funds for medical/health research and things of that sort.
They also have to develop research plans. This is where the real, interesting culture change has taken place, because probably for the first time in living memory the Canadian universities now have to declare where they are putting their research priorities. In the past, and in my day as a vice-chancellor, you hired somebody and you said, 'How can we help you get your money?' Today you decide where you want to go and then you go after people who can do that kind of activity, because not only are you putting in the salary money but also you are having to compete for the capital money and find the matching capital money. This is a remarkable culture change that has taken place, because we not only require their research plans but we actually publish them on the web so that every faculty member at every university can see what their vice-chancellor said as to what the objectives were for research at that institution.
Our second program was created a little bit later. It was created in realisation of the fact that, like in every jurisdiction, I think, the turnover or retirement rate of faculty members now is very high. It is estimated that in Canada we will need probably 20,000 new faculty positions over the next five to 10 years, and that is not even talking about much in the way of growth. So the recruitment process is really incredible. I'm sure you have the same issues here. They chose to fund 2,000 Chairs that would be funded at the level of $100,000 for the junior Chairs new hires, people who were coming into the system and for senior people it would be $200,000. The expectation is that over time about half of the Chairs will be starting positions and about half of them will be recruiting very senior people. That is recruiting or retaining, because in some cases we run the risk of losing some of our very good people in the international competition that is under way. They committed $900 million to this program, and when it reaches the full fill-out, by 2005, there will be a continuing cost of about $300 million a year to support this activity.
I said that this has nothing to do officially with education. This is the federal government sitting on a surplus, saying, 'Research and development is important,' and transferring the money for the purposes of research. We were asked the question, 'Well, will they be allowed to teach?' The answer is, 'Don't ask the question, because you might have to answer it.' There is no reason why the universities who are hiring these people would not want to use these people to do teaching, so you don't want to make that definition centrally; you want to leave that to the institutions. So again this is an institutional tool. Furthermore, the institutions must show how they are hiring people, nominating people for this process, that again are consistent with their publicly stated research plans and priorities.
These two programs are really driving the institutions to get into the issue of setting their own plans and priorities, and where they want to go, and then being measured against the excellence of what they are proposing to do in that context.
Canada has never recognised indirect costs. For the first time we had a fund last year that allocated about 20 per cent of the funds that went through the granting councils to the institutions for the purposes of indirect costs. So far it is a one-time commitment, but the public rhetoric and the statements that were made when they made this decision in last year's budget cycle are that indirect costs would be funded on a continuing basis. We are fully expecting that when the next budget comes down, this will now be built in as an add-on to the whole system. Again these are moneys that go to the institutions, to assist them in meeting their objectives.
The fourth category in this is graduate student support. Again this is an area where the federal government believes it can get away with transferring money to the institutions not to the provinces for the purposes of competing for the best graduate students. They announced a short while ago a significant endowment, a $160 million endowment fund, to create the program for support of graduate students in the social sciences and humanities. Why social sciences and humanities? Basically because it was done in honour of and tribute to Pierre Trudeau, so these are known as the Pierre Trudeau Scholarships for social sciences and humanities. And a lot of us are hoping that there will be a similar program with respect to the other areas. This was presented as the first of these activities.
So far I have talked about new programs which are oriented explicitly towards giving the institutions the capacity to compete for faculty, to compete for the tools that are needed, and to compete for graduate student support and to create the environment in which they can perform outstanding research. Of course, like you we also have those programs that meet the researcher needs, which is not always the same as the institutional needs. These are aimed at individuals or teams of individuals who come forward.
The Canadian Institutes of Health Research have evolved from what was the Medical Research Council. Their budget has not quite been tripled, but it is close to being triple. It has been restructured significantly to broaden the outlook of what health is about. Up until now it was largely biomedical. It has now moved beyond just biomedical and is looking at the social issues, the whole set of population issues, of epidemiology and all those kinds of things which are broader than the traditional biomedical areas. Within this they have created a number of institutes:
- Aboriginal People's Health
- Aging
- Cancer Research
- Circulatory and Respiratory Health
- Gender and Health
You can see they cover a pretty wide range. They get into things like population and public health, they get into issues like nutrition and metabolism, things they were not traditionally supported for by the old Medical Research Council, so it is opening this up to a much broader context.
We have the Natural Sciences and Engineering Research Council. They have not significantly increased the budget of this council. A lot of us are pushing very hard for that, because we are bringing in very significant numbers of new, young, very enthusiastic people things like the Canada Foundation are giving them tools to get their careers started, and if they are going to deliver over the next three or four years they are going to have to have a kind of level of support that is greater than the old generation had. So this is a work in progress, and a lot of us believe it has to happen. It hasn't happened significantly yet.
And then we have the Social Sciences and Humanities Research Council, in which they have added new money. It is pretty significant for that community, but it is where they are going to be focusing on the issues of what the new economy is all about. So it is addressing that side of the social science and humanities issues.
You probably know a lot about the networks of centres of excellence:
- Stem Cell Network SCN (2000-2005)
- Canadian Institute for Photonics Innovations CIPI (1999-2005*)
- Canadian Institute for Telecommunications Research CITR (1989-2002)
- Geomatics for Informed Decisions Network GEOIDE (1998-2005*)
- Insitute for Robotics and Intelligent Systems IRIS (1989-2005)
- Mathematics for Information Technology and Complex Systems Mitacs (1998-2005*)
- Micronet Microelectronic Devices, Circuits and Systems (1989-2005)
- TeleLearning Network of Centres of Excellence (1995-2002)
- AquaNet Network in Aquaculture (1999-2003)
- Canadian Water Network CWN (2000-2005)
- Mechanical Wood-Pulps Network (1989-2002)
- Sustainable Forest Management Network SFM (1995-2009**)
- AUTO 21 The Automobile of the 21st century (2000-2005)
- Intelligent Sensing for Innovative
Structures ISIS (1995-2009**)
* NCE's eligible to compete for a final 7 year funding cycle
** Mid-term review in 2005
Again, their budget has been increased and they are put on a permanent basis not each institution, not each network, but the principle of the agency is now on a permanent basis. They spend close to $80 million a year in support of these virtual networks. I simply list them here so you can see what they are. There are many of them. They are usually established for seven years; they may continue for another seven years or they may be phased out after seven years, on the assumption that a lot of good things have already happened and there is much more that can be done by bringing in a new network.
It is an interesting question as to whether these are centrally directed or whether they are responsive to proposals. Most of them have been in response to a call for proposals. There is a small number of them, such as Auto 21, in which the federal government did identify four or five areas where they wanted one of these networks and then they went out with a call for proposals from the networks. So some of these were targeted in that way. The auto industry is very big in Canada but there is not a big presence in research in auto, and so that was a case where there was a decision to use this as the competitive process to develop a proposal for that kind of activity.
There are some other things under way. You probably know something about the Canadian Institute for Advanced Research. It is a totally independent organisation, nothing to do with government, but they just received a $25 million grant from the federal government, to be spent over the next five years. That is on the assumption that it will be matched, and this gives them a lot of leverage to go into the private sector to raise the matching funds.
In addition to our Foundation, which I mentioned has received $3 billion, they have created a number of other foundations:
- Sustainable Technology Development Foundation
- Climate and Atmospheric Science Foundation
- Canadian Institute for Health Information; and a series of others.
Altogether, in the foundation structure, they have set aside $7 billion for these various foundations, and then we have various lifetimes that go with it.
And there are other things going on within the government. The National Institute for Nanotechnology was funded through the National Research Council and set up jointly in Alberta with $50 million from the federal government and $50 million from the provincial government, so that is a really complicated federal-provincial-university joint venture activity to create a significant presence in nanotechnology.
Within government there are also some interesting things taking place. They have not been funded but the idea would be that the government agencies might actually start looking at creating the equivalent of the networks of centres of excellence. That is, if there is a water issue, when you look at the different ministries in our Canadian government you will find there are about 10 ministries who have a deep interest in it. It isn't just Environment, it isn't just NRCan Natural Resources Canada it isn't just Health. All of these things are interested in the water question. I think we are going to see emerging in the next couple of years some federal networks, which will be a very interesting challenge to the parliamentary system, as I see it, because who is going to be the minister who is going to champion it when there are 10 ministries involved? But it is an idea that is getting a certain momentum.
Finally, in terms of new, recent ventures, there is Genome Canada. Genome Canada was one of the foundations that were also created with a separate fund. They received a $300 million allocation and they had to match it. They have now created or reinforced five major research centres in genome activities across the country.
Let me go back to the Canada Foundation for Innovation, because it is, in a way, the big venture of all of these. All of these have to be taken in this context.
Our objectives are to provide tools to Canada's researchers. We are specifically mandated to work with not-for-profit, non-government, research-performing agencies, which is a long mouthful but it is basically being sure that we do not fund government agencies, it is being sure we do not fund the private sector, and it is ensuring we do not fund third parties who say, 'Well, we think we know what should happen in Canada in this discipline. Give us a cheque and then we will decide how much goes to the different institutions.' It has to be the research-performing institutions, and for us that is basically universities, teaching hospitals and, to some extent, colleges.
It is aimed at ensuring that we are able to attract and retain the best, whether they are young people getting started or whether they are people who are established, and it is clear it is doing a lot of that already. It is to reinforce, of course, internationally competitive research, to strengthen the benefits to Canada and that is the other culture change that is taking place that is significant. You cannot submit a proposal to the Canada Foundation for Innovation without first talking about your research plans and how it fits, and without talking about what you are going to do with this money for the taxpayers who are providing this money. And believe me, that is an interesting culture change, because requiring researchers to actually tell the world what they are doing for the people who pay the money is not a tradition. It certainly wasn't my tradition in an earlier life. Now we are putting the institutions on the line, to say, 'You tell the world, and you put this as one of the criteria for selection.' It isn't only excellence, it isn't only sustainability. It is, 'What are you going to do for Canada?' Believe me, the culture change of that has been a tough one, because people are used to putting up a track record, putting up a lot of history and saying, 'I did all this good stuff. Please send me a cheque so I can do more.' Now they have to tell us where they are going to go, what their vision is. It doesn't mean that is where they will end up going, but they have to tell us what they are going to do with this massive amount of money, for the benefit of the people who provide the money. It is no longer an entitlement.
I have already summarised the chronology of the Canada Foundation for Innovation but I do have an interesting anecdotal experience to recount. On 22 June last year, which was the last day that the federal government could book it against the previous fiscal year, we walked over to the lobby of the Royal Bank and an official from the Finance Ministry came with a piece of paper in his pocket, pulled out the piece of paper and handed it to us, and said, 'Please deposit.' The cheque was for $1.25 billion an experience which I don't think I will ever again, ever, have in my life. It wasn't electronic, and it had no commas in it because they didn't have enough spaces to be able to write this cheque! So when I say they are serious about this, I mean it is clear that they are very serious about it indeed. As of this June, as of now, we have now awarded $1.9 billion. I mentioned it was $3 billion, but because of the interest we are accumulating on it and project to accumulate, it will actually be $4 billion, and so we have spent roughly half of the amount.
At this point we have supported nearly 2,000 projects. There is always the question in Canada, perhaps not so prevalent in Australia, 'What are you doing for the little universities?' We have a lot of little universities in Canada, particularly in the Maritimes and in Quebec. Well, we have supported a lot of small universities, who have come forward with very interesting plans. They often are able to articulate one or two things they want to do really well. I describe it this way: they have some single peaks of excellence, or two peaks of excellence, whereas if you are a big university you might have 20 or 30 or 50 of these. So these are the institutions that we have supported. Of course most of the money has gone to the larger universities.
This is a summary of the programs that we have.
| $M | # of projects | |
| Canada Research Chairs | 58.5 | 402 |
| Innovation Fund | 1,369.3 | 743 |
| New Opportunities Fund | 136.0 | 830 |
| Infrastructure Operating Fund | 184.0 | - |
| International Fund | 163.0 | 9 |
| Total | 1,911.0 | 1984 |
We provide capital support to the people that are recruited to the Canada Research Chairs. So far we have provided 400 grants to people who are occupying these Chairs. It may be as many as 600 by now; it is moving fast. These will be filled, as I said earlier, by the year 2005. The Innovation Fund, which is the major fund, has funded 740 projects for nearly $1.4 billion. The New Opportunities Fund is a very interesting one, because this has been universally well received. What we do is we will support a newly hired faculty member who has their first faculty position at the university, in Canada, with a starter equipment grant again we only provide 40 per cent of it and at this point we have supported over 1,200 mostly young newly-hired faculty members across the country. This is giving an enormous leverage in influencing and attracting people and giving them fast start-ups in their career. Obviously, the criterion of excellence for our New Opportunities Fund is quite different, because you are trying to assess potential more than you would be in the Innovation Fund.
We have an Operating Fund that has been provided to us, which provides some assistance with operating these capital facilities, and we have an International Fund for two purposes. One is to find a few projects where an outstanding group in Canada wanted to do something with an outstanding group somewhere outside of Canada and they were so symbiotic that there would be a really joint activity, but where the Canadian side did not have the tools in order to be a good partner. We have just selected the first three projects in this fund. The second part of this is an access fund, so that where there is a large international activity under way which is not going to be duplicated in Canada, there is an opportunity for the Canadians to pay the fee to be part of that consortium, whatever that consortium might be. This is a one-time fund.
The other culture change that has taken place is that every year we require from each project that we have funded, and from each institution, a five-page progress report on the impact that this has had on that institution. What difference has it made to them? Have they been able to do things they never could have done otherwise? Have they been able to attract people they couldn't have otherwise? We summarise all of that information, and we actually distribute the institutional progress reports to our parliamentarians. So every institution that puts one of these in is not just addressing us, they are addressing the people who write the cheques. And that, I think, has caused a significant requirement and has changed people's thinking, because now this is the reporting to the public. These are also published on the web so that every university can see what every other university said. I think it is now well established that this is happening.
I want to just quickly go through a few of the things that we get from these reports. There are people who tell us that the atmosphere in the Canadian universities today is something that they have not seen for a long, long time. There is a sense that they can do things, there is a sense that they can dream. Yes, they still have to compete for it, but there is a place to go to make some really significant things happen. Their confidence is increasing, and after a lot of fuss at the beginning they have accepted the fact that developing research plans is not a bad thing to do one way of putting it is, 'We have finally given the Vice-Presidents (Research) a real job, because now they actually have to sit and talk about priorities.' It is clearly increasing our visibility on a global basis, and so far they have managed to bring funding partners to the table for all of that 60 per cent that remains.
I have mentioned several times the culture changes that are under way, and another one that comes out of their reports is that the New Opportunities program has been very well received. One of the things about big pieces of equipment and facilities is that it has caused people from totally different disciplines to actually come and talk to each other. They seem to be not too concerned about turf when it is pieces of equipment. In some places there will be 20 or 30 people from different departments using the same equipment, and they actually begin to talk to each other in a way that hasn't happened before. We have a broadband optical fibre system across the country which is, I think, the envy of the world, and that is opening up all kinds of new research. I mentioned smaller universities. A lot of interdisciplinary activity is taking place, because apparently the equipment does not have the same threat that other people in other departments or department heads might impose.
Let me just quickly give you a few examples of some of the things that we have funded. We got 64 universities to sign on to a digital library project. They had to find the rest of the money. We have funded a synchrotron, based in Saskatoon, which has brought a lot of institutions together. Particularly relevant for Australia, we have funded a wine centre at Brock University for cool climates. The small universities have brought some remote-sensing techniques which they are using in forestry and art conservation. I found that a really interesting marriage; they are using precisely the same technologies. A list of the 500 top computing facilities in the world is produced every six months by a university group in Geneva, and three years ago we had one in the top 500. Today we have 11, so at least we are back in the game again. At least we have HPC functioning well in the country. These are just a kind of a random selection: a major project at McGill on health databases, using information from all across the country; a mining technology centre at Laurentian University; a National Capital Institute for Telecommunications, which brings together universities, governments and the private sector; of course innumerable genomic and proteomic facilities; and then some very interesting things in the social sciences and humanities. I mention here a data research initiative where we have funded six centres across the country in collaboration with StatsCan. So social science researchers can now locally get the actual databases from StatsCan.
One of the projects is very interesting. A consortium came forward to propose a portal for text analysis, and there is a whole new excitement going on among the people in the humanities, who for the first time have suddenly realised that the ability to do textual analysis using large databases changes the things they can do. It changes the questions they can ask, it changes the way they can think about things. They can ask questions of databases that can be handled and manipulated well, that might take them centuries of trying to sort this out and trying to remember what was there when they read it the last time. So this is a project which either could be called an ICT project or could be called a humanities project. And depending which community you were in, we called it a humanities project or an ICT project. It has had an enormous cultural impact.
I would just to talk very briefly about this question of commercialisation. We are using the term 'Commercialisation Productivity', and there is an agency that collects data from all the North American universities.
Commercialisation Productivity
(2000 data)
| Productivity (U.S.$) (top 15 universities) |
||
| Performance Indicator per $1M U.S. of sponsored research | U.S.* | Canada |
| Invention disclosures | 0.64 | 0.69 |
| Licence and options executed | 0.22 | 0.22 |
| Licence income received | 36,810 | 18,864* |
| U.S. patents issued | 0.21 | 0.11 |
| Start-up companies formed | 0.02 | 0.05** |
-adjusted for indirect costs estimated at 52%
*Information provided during the survey about very significant
licensing income increases at several institutions leads to a projection of
about $30,000 in 2001
** If McMaster and Waterloo spin-offs
were recorded, it is estimated that this number would rise to .06 to .07.
For productivity we divide by the number of research dollars. When you look at this and compare the US and Canada, you will see that in terms of start-up companies we are significantly ahead of the US; in terms of US patent issues we are a little bit behind them but not all that much; in terms of licence income we are significantly behind them but that is rising fast; in terms of licences and options executed we are about the same; and in terms of invention disclosures we are about the same. So there is a lot more that can be done, but let's start off with the glass at least half-full in terms of those objectives that I mentioned at the beginning.



