Federal R&D panel releases report

The expert panel leading the Review of Federal Support to R&D submitted its final report today to the Honourable Gary Goodyear, Minister of State for Science and Technology. It makes a series of recommendations that call for a simplified and more focused approach to the $5 billion worth of R&D funding provided by the federal government every year.

The report is available online:

• Executive Summary 
• Full Report 

Highlights from the panel’s recommendations are:

The creation of an Industrial Research and Innovation Council (IRIC) to deliver the federal government’s business innovation programs.

• There are currently more than 60 programs across 17 different government departments. The creation of an arm’s-length funding and delivery agency – the Industrial Research and Innovation Council – would begin to streamline the process as the development of a common application portal and service to help businesses find the right programs for their needs (a “concierge”).

Simplification of the tax credit system used to support small and medium-sized businesses.

• The current Scientific Research and Experimental Development (SR&ED) program is unnecessarily complicated: many small businesses hire consultants just to submit an application. This discourages eligible businesses from applying and may cost successful small SR&ED recipients a good portion of the credit received. By basing the SR&ED credit  solely on labour costs, the panel believes SR&ED will be more effective.

Make business innovation one of the core objectives of procurement.

• The federal government spends billions of dollars every year but it ranks low internationally when it comes to using that purchasing power to encourage Canadian innovation. The encouragement of home-grown innovation a part of government procurement is commonsense.

Transform the institutes of the National Research Council into a series of large-scale, collaborative centres involving business, universities and the provinces.

• The NRC was created during World War I to kick-start Canada’s research capacity. It has a long and storied history of discoveries and innovation, including numerous commercial spin-offs. While the NRC continues to do good work, research and commercialization activity in Canada has grown immensely.  In this new context, the NRC can play a unique role, linking its large-scale, long-term research activity with the academic and business communities. The panel recommends evolving NRC institutes, consistent with the current strategic direction, into not-for-profit centres run with stakeholders, and incorporating its public policy research into other departments.

Help high-growth innovative firms access the risk capital they need through the Business Development Bank of Canada

• Innovative Canadian companies face real challenges in getting start-up funding and late stage risk capital financing. In many cases, the gap is filled by foreign investors, which means that too many commercial benefits and intellectual property end up leaving the country. Directing the BDC to work with angel investor groups and develop late-stage risk capital/growth equity funds will pay dividends.

Establish a clear federal voice for innovation and work with the provinces to improve coordination.

• Currently, there is a lack of government-wide clarity when it comes to innovation. Responsibility is spread across a number of cabinet portfolios. The Prime Minister should assign responsibility for innovation to a single minister, supported by a whole-of-government Innovation Advisory Committee, evolved from the current Science Technology and Innovation Council (STIC), composed of external stakeholders, who would then work with the provincial and territorial governments to initiate a collaborative dialogue to improve coordination and impact.