Budget looms large as Industry Canada develops working plan for innovation strategy

Guest Contributor
January 20, 2003

Industry Canada is developing a detailed work plan for its long awaited innovation strategy but details are scarce due to several initiatives now being considered for the upcoming Budget. Memoranda to Cabinet (MCs) were already drafted before last November’s national summit took place, and staff are developing Budget proposals where applicable and fleshing out recommendations for longer term consideration.

Preparation of the work plan is now in its final stages, but its implementation is being delayed by ongoing consultation with other departments.

Of the 18 recommendations stemming from last November’s national summit, the vast majority fall within the department’s realm of responsibility. Officials won’t say which initiatives are being fast tracked and no decision has been made on what aspects of the work plan will be made public. But they acknowledge that MCs were being prepared before the culmination of the consultation phase of its innovation agenda.

“MCs were in process before the summit,” says Michael Fine, executive director of Industry Canada’s innovation secretariat. “The summit validated that these were priorities. It’s quite reasonable.”

Those priorities are being discussed in only the most general terms. But Dr Rey Pagtakhan, secretary of state for science, research and development, says he is he pursuing three initiatives with his Cabinet colleagues. He told RE$EARCH MONEY that he hopes to get approval for enhancing the National Research Council’s cluster and community innovation strategy, create a permanent program for the indirect costs of federally funded university research, and industry tax incentives for the commercialization of products.

For the latter, Pagtakhan says its status as a priority item leading into the next Budget is “an acknowledgement of the need to accelerate the commercialization process.” He added that the issue of extending tax incentives to the marketing of innovative products is currently “a subject of debate at the Finance department”.

How these priorities fit into the work being conducted within Industry Canada won’t be known until the Budget is unveiled.

“The main point is, we’re moving forward on a work plan leading to an action plan. (Industry minister) Alan Rock said at the summit that he wanted an action plan or vision so the process is designed to get to that point,” he says. “We’re looking at a number of items to see if we can handle them in the Budget proposals. Others will require the establishment of working groups to delve into complex issues, or there may be workshops and round tables to better define what to do about a specific issue.”

Outside of the recommendations tied to the Budget, officials are examining the creation of sectoral action plans. The specific sectors being targeted have not been finalized, but Fine says there will be about 15 and that the plans will include sector-specific regulatory reform, provisions for in-house training and apprenticeship, participation levels of underemployed groups and examination of incentives and blockages to growth. “We will look at sectors that made substantive submissions to the innovation agenda or sectors that are important to the Canadian economy,” he says. “All this will take a fair bit of work as it has to be done on a sector-by-sector basis. We’re fleshing out the ‘how to’.”

Industry Canada has also established a working group to examine the issue of early-stage venture capital funding, in conjunction with the provinces.

Also being pursued is the recommendation for benchmarking Canada’s progress towards meeting the targets set out to make Canada one of the top five innovation nations in the industrialized world. Yet another advisory group has been established for this purpose, and the first report is slated for release by the fall.

“Ultimately, we want to have a proposal to handle each of the 18 recommendations,” says Fine.


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