INST Committee Report

The government’s innovation plan, as described in the government’s response to the Speech from the Throne, has five parts:

1. At least double the current federal investment in R&D by the year 2010. Increased investments will be made in the Granting Councils, Genome Canada, the Canadian Institutes of Health Research, and government laboratories and institutions;

2. Work with the university community to assist universities in securing the resources necessary to fully benefit from federally sponsored research activities;

3. Accelerate Canada’s ability to commercialize research discoveries, and to turn them into new products and services;

4. Pursue a global strategy for Canadian science and technology, supporting more collaborative international research; and

5. Work with the private sector to determine the best ways to make broadband Internet access available to all communities in Canada by the year 2004.

Along with the emphasis on innovation, the government also stressed that the success of the "new economy" depends greatly on human talent. As such, the government also indicated that it would place increased resources into ensuring that Canadians have the training and learning tools necessary to prosper in, and contribute to, a knowledge-based economy.

The Committee has been at the forefront of promoting an innovation agenda. It has released several reports since 1997 on issues related to R&D funding, innovation and productivity, and made specific recommendations to the government on how the transition to an innovation and knowledge-based economy can best be achieved.

The government has placed a great deal of resources into ensuring that its innovation agenda produces tangible results. For example, in October 2000, the arm’s-length National Broadband Task Force was established to advise the government on how to best make high-speed, broadband Internet services available to businesses and residents in all Canadian communities by the year 2004. The Task Force delivered its final report, The New National Dream: Networking the Nation for Broadband Access, to the Minister of Industry, Brian Tobin, in June 2001. In its report, the Task Force emphasized that high-speed broadband will provide the foundation for improved services such as distance learning and tele-health and will give small businesses access to broader markets. The report stresses that all Canadians should have equitable and affordable access to broadband services, and that the government’s focus should be on communities where the private sector is unlikely to deliver these services. It also noted that First Nation, Inuit, rural, and remote communities should be a priority along with public institutions (learning institutions, libraries, health care centres, and public access points).

The federal government considers that the provision of broadband Internet capacity is an urgent and high priority for the innovation economy. The provinces and territories share this opinion. Federal, provincial and territorial ministers responsible for research, science and technology met on September 21, 2001 to discuss principles of action to speed up the transition to an innovation and knowledge-based economy:

The federal government is working with provincial and territorial governments to realize the objective of making Canada one of the most innovative countries in the world. The government has also stressed the importance of the participation of the private sector in achieving this goal.

The national vision and strategy for, and cost of, realizing the innovation agenda is to be detailed in a white paper that is expected to be tabled later this year or early next year. Estimates of costs for implementing the various components of the agenda vary. According to Statistics Canada, the federal government invested $3.71 billion in science and technology R&D activities (for both intramural performance and extramural funding of R&D) in fiscal year 1999-2000. Given that the government has pledged to double current federal investment in R&D by the year 2010, the final investment would be in the range of $7 billion per year.

In terms of the broadband component, the National Broadband Task Force estimated the cost of providing broadband services to communities without such access at between $1.3 and $1.9 billion. The Task Force estimated that a more ambitious plan would cost approximately $4.5 billion. The Task Force suggests that these costs would be shared with other stakeholders.

The events of September 11 have changed the short-term priorities of the government. The government is now preoccupied with improving security measures at ports of entry and introducing other counter-terrorism measures. Implementing these measures will be expensive. The government has also made investments in other areas, such as the airline and tourism industries, that were directly affected by the events of September 11.

Increased security measures at the Canada-U.S. border have, unfortunately, impeded the flow of commercial and passenger traffic between the two countries. These delays are having negative consequences on Canadian industries. Maintaining a safe border while ensuring the free flow of goods and people across the border has become the government’s main priority:

The government’s changing short-term priorities will likely have impacts on spending for other government programs, and the government must choose which programs are the most important. Witnesses appearing at this series of hearings stressed that the government should not go back into deficit in order to fund all of its proposed initiatives.

However, at the same time, witnesses suggested that the government should not abandon its long-term policies and initiatives. In particular, many witnesses stressed that the government’s plans for an innovation agenda should not be discarded, but that the timing and exact priorities for this agenda may need to be altered to reflect the new fiscal reality:

For the broadband initiative in particular, witnesses pointed out that the "roll-out" plan, and thus the cost, could be spread out over a number of years:

Although witnesses expressed support for the principle of maintaining an innovation agenda, some witnesses questioned whether the federal government should be investing in the expansion of broadband access to all parts of Canada:

The Committee is very supportive of the overall federal innovation agenda, but understands that the costs and timing of the initiative may not be immune to the impact of shifting priorities towards Canada’s increased security needs. In terms of the broadband component, the Committee recognizes that given the events of September 11, the goal of making high-speed broadband Internet services available to all Canadians by 2004 will be challenging. However, the Committee feels that every reasonable effort should be made to achieve this objective with a minimum of compromise. The Committee therefore recommends:

The Committee urges the government to consider the recommendations made in the Committee’s fifth report, A Canadian Innovation Agenda for the Twenty-First Century, to increase funding to certain areas of the country’s innovation framework that are in immediate need of funds. This injection of funds would serve as an economic stimulus. As such, the Committee recommends: