The Liberal's 2022 federal budget pins its hopes on private sector innovation for saving us from climate change, supply chain issues, and the economic impacts of the pandemic and war. This hoped-for innovation is supposed to come from a private sector spurred into investing heavily in growth from advanced research and development by leveraging intellectual property. This research will be paid for and supported by public spending through direct profit subsidies and pushing tighter connections between public university research and business.
Canada has been attempting this model of "innovation" since the mid-1990s with limited success – a failure even referenced in this budget document. The government will be doing a millions of dollars, multi-year review of the Canada's innovation system – presumably to figure out what is going wrong.
However, workers in universities, researchers, graduate students, undergraduate students, and lecturers already know why this model is failing to provide the expected results. Simply, this model of "innovation" where we rely on university researchers producing market-ready products/ideas has never worked since that is not what university researchers are hired for, good at, or care much about. And, the marketization of education access through increased tuition fees, and casualization of teaching has created a highly educated but student-debt burdened workforce – too fearful of poverty to innovate.
Instead of acknowledging this, the Liberal government has doubled-down on their private sector research and development fantasy. A fantasy the government's own numbers show does not work. Unfortunately, time is running out for the private sector "innovators" to invest in and change the production processes we need for a sustainable future. (See the end of this document for the narrative of the Liberal's innovation system working.)
Students, who make up the future citizens, workers, and innovators of Canada, are barely mentioned except to partially extend pandemic-related economic support. Without further support for broad-based training and curiosity driven research, the innovation program will grind to a halt long before we solve the country's problems.
The federal government is by far the largest funder of research-related activities in universities, fund most wage subsidies for student workers, and make up the plurality of financial support (direct and indirect) making it into universities.
A non-exclusive list of supports include:
- student loans
- student grants
- indigenous student funding
- infrastructure funding
- wage subsidies for rural health practitioners
- student work (summer) wage subsidies
- research grant money
- research infrastructure grants
- "innovation" focused research commercialization programs
- subsidies to businesses partnering with universities
- co-location of National Research Council research and federal researcher labs
The federal government also regulates the intellectual property and "marketization" framework which sets the tone for research and development in the public, university, and private sectors.
Instead of leveraging this to build an innovation-driven industrial strategy, the Liberals have decided profit subsidies are their only policy lever. Outside of some specific references to the National Research Council – Canada's only consistently successful innovation and marketization arm – our future is left to the market.
PSE Budget Highlights
First, there are some specific supports for students for pandemic-related hardship.
- Continued doubling the Canada Student Grants amount until July 2023—meaning up to $6,000 per year in non-repayable aid for full-time students in need.
- Waiving interest on Canada Student Loans until March 2023.
- Continuing the enhancing repayment assistance program for repaying student loans for workers making $40,000 or less.
- $40.9 million over five years, starting in 2022-23, and $9.7 million ongoing to the federal granting councils to support targeted scholarships and fellowships for promising Black student researchers.
- $26.2 million over four years (starting 2023) and $7 million ongoing to increase the forgivable amount of student loans for doctors and nurses who practice in rural and remote communities to $30,000 for nurses and $60,000 for doctors.
- International students on the path to permanent residency have not been included in foreign ownership of housing ban.
- The Immigration Levels Plan grants permanent status to temporary residents—including essential workers and international students.
The research focused support is entirely focused on science, technology, and engineering. Social sciences, humanities, and the arts research are all but ignored in the budget document.
- $1.2 billion to support life sciences and bio-manufacturing in Canada, including investments in clinical trials, bio-medical research, and research infrastructure;
- $1 billion to the Strategic Innovation Fund to support life sciences and bio-manufacturing firms in Canada and develop more resilient supply chains. This builds on investments made throughout the pandemic with manufacturers of vaccines and therapeutics like Sanofi, Medicago, and Moderna;
- $1.2 billion to launch the National Quantum Strategy, Pan-Canadian Genomics Strategy, and the next phase of Canada’s Pan-Canadian Artificial Intelligence Strategy to capitalize on emerging technologies of the future;
- The Canada Growth Fund will be a new public investment vehicle that will operate at arms-length from the federal government. Initially capitalized at $15 billion over the next five years. It will invest on a concessionary basis, with the goal that for every dollar invested by the fund, it will aim to attract at least three dollars of private capital.
- Canadian Innovation and Investment Agency creation. A market-oriented innovation and investment agency to enable innovation and growth within the Canadian defence sector and boost investments in Canadian defence manufacturing.
- Budget 2022 proposes to provide $750 million over six years, starting in 2022-23, to support the further growth and development of Canada’s Global Innovation Clusters. Private, but publicly funded, research and innovation groups to support fighting climate change and addressing supply chain disruptions.
- Further tightening of intellectual property rights for research;
- $10.6 million over five years, starting in 2022-23, and $2 million ongoing to Innovation, Science and Economic Development Canada to launch a survey to assess the government’s previous investments in science and research, and how knowledge created at post-secondary institutions [does not] generates commercial outcomes.
- $125 million over five years, starting in 2022-23, and $25 million ongoing, for the Research Support Fund to build capacity within post-secondary institutions to identify, assess, and mitigate potential risks to research security; and
- $38.3 million over four years, starting in 2023-24, and $12.7 million ongoing for the federal granting councils to add new, internationally recruited Canada Excellence Research Chairs in the fields of science, technology, engineering, and mathematics. This will support a further 12 to 25 new Canada Excellence Research Chairs.
- A program to explore new ways to better integrate leading university researchers and business partners and further modernize the NRC to better invent, innovate, and prosper.
- $47.8 million over five years, starting in 2023-24, and $20.1 million ongoing to Innovation, Science and Economic Development Canada to launch a new national lab-to-market platform to help graduate students and researchers take their work to market;
- Budget 2022 proposes to provide $100 million over six years, starting in 2022-23, to the federal granting councils to support post-secondary research in developing technologies and crop varieties that will allow for net-zero emission agriculture.
This narrative is illustrative of the fantasy innovation story that is driving the Liberal's post-secondary investment decisions:
An Innovation and Investment Agency to Help Canadian Businesses Succeed
Shannon runs a small life science firm in London, Ontario, and has learned that a Canadian university researcher has discovered—through preliminary experiments—a new class of potentially life-saving cancer therapeutics. Shannon’s firm specializes in methods for quickly turning potential therapeutics into safe, market-ready pharmaceuticals through advanced drug development methods.
Her firm wants to partner with the researcher to initiate a new R&D program to develop these drugs, but does not have the capital it needs. Shannon sees a large global opportunity, but financial support is needed up front to help her company seize the opportunity.
Shannon’s firm could approach the Agency to seek guidance and support, and the Agency would quickly determine the feasibility of the project, the market potential of the technology, and could provide the firm with needed funding to capitalize on an exciting opportunity. If project milestones are achieved, Shannon’s firm could apply for additional funding as it works to sell its new product around the world and create jobs here in Canada.