INST Committee Report

            In June 1999, the Committee answered the challenge laid out by these groups in its report, entitled Research Funding: Strengthening the Sources of Innovation, wherein it made 16 recommendations for improving the planning, effectiveness and efficiency of research activities in Canada.

            Although the Committee was satisfied that this first report addressed the research and development (R&D) aspects of product and process innovation, it remained skeptical that R&D alone will solve all our industrial innovation problems. The Committee felt that competition is also an important ingredient of innovation. In fact, the Committee believes that competition is probably the single leading catalyst in all types of innovation and, unless it is present, R&D incentives proposed in this first study will be of little consequence. For this reason, the Committee next explored issues of productivity and competitiveness, which it believes are quintessential building blocks of a prosperous society. The Committee thus embarked on a second report that sought an optimal mix of all influential factors of innovation, in particular the merging of government plans and priorities concerning productivity and competitiveness with that of its R&D efforts in order to preserve Canada as a prosperous nation.

            In April 2000, the Committee published its report, entitled Productivity and Innovation: A Competitive and Prosperous Canada, which contained 36 recommendations that will go a long way to revitalizing Canada’s productivity and standard of living growth rates, hopefully enabling them to obtain levels recorded in the 1960s and thereby restore Canada’s near-top world ranking. These recommendations will also better prepare Canadians and Canadian businesses for the opportunities and challenges presented by a knowledge-based economy.

            Though it has been less than two years since the Committee began its foray into matters of innovation, a lot has transpired. In its 1999-2000 and 2000-2001 budgets, the Government of Canada responded to the Committee’s recommendations in both reports and, equally important, began addressing the public’s concerns for policies geared to a knowledge-based economy. Government and private sector spending on R&D is now on the rise, and tax reductions are set in place to stimulate long overdue private sector investment. Not surprisingly, Canadians are witnessing improvements in Canada’s Gross Expenditure on Research and Development (GERD) per unit of Gross Domestic Product (GDP) — the bell weather statistic for innovation in the longer term — and Canada’s GDP, which has been growing in a non-inflationary way for more than a decade, is in fact setting a longevity record in terms of economic recovery since the 1990-1991 recession.

            Federal government policy, particularly of the last two years, has provided a good start. The Committee — with its new name expanded from Industry to Industry, Science and Technology and now reflecting its broader mandate — feels that the time is right to re-walk this ground with a third report in order to provide the fine-tuning required for the next step in the federal government’s innovation agenda, focusing primarily on science and technology (S&T) issues. In this way, the Committee will tie loose ends between R&D and productivity issues that were not addressed in its first two reports; more importantly, however, the Committee wants to ensure that these early positive economic results are not just a temporary spurt but the beginning of a long-term trend.

            The Committee structured its hearings in such a way as to hear from as many experts as possible on S&T and its impact on a knowledge-based economy. The roundtable format chosen by the Committee allowed for a captivating debate of the principal issues at stake. These included: S&T contributions to a knowledge-based economy; R&D activities at universities and colleges, including factors that would accelerate the commercialization of their results; the government’s R&D funding strategy with respect to the National Research Council, its Networks of Centres of Excellence, the three granting councils (i.e., Natural Sciences and Engineering Research Council of Canada, Social Sciences and Humanities Research Council of Canada, and Canadian Institute for Health Research), the Canada Foundation for Innovation (CFI), the Industrial Research Assistance Program (IRAP), Technology Partnerships Canada (TPC), Scientific Research and Experimental Development (SR & ED) tax incentives, and specific large and specialized R&D projects, including an evaluation of the "value-for-money" obtained in this strategy; financing innovative start-up companies; and the intellectual property rights and protection regime.