Finance standing committee calls for funding increases for health, astronomy research

A key House of Commons committee is calling for the federal government to increase the base budget of the Canadian Institutes of Health Research (CIHR) by $350 million over three years. The Standing Committee on Finance endorsed only a small number of the recommendations submitted by a large number of witness and submissions as part of the run-up to the next federal Budget.

The Committee, chaired by Brian Pallister, Conservative MP for Portage-Lisgar MB, offers 10 seemingly hodgepodge recommendations devoted to enhancing innovation, research and entrepreneurial activity. Of the three relating directly to R&D, the recommendation for enhanced health research funding also contains pitches for boosts in funding for the other two granting councils, as well as an increase in support for the indirect costs of federally sponsored research to at least 40%, better access to R&D funding by the colleges and smaller universities and the possibility of creating Canada Research Chairs targetting colleges in the northern territories.

"The Committee believes that — as the country moves forward and seeks enhanced competitiveness — organizations of all sizes and types, and in all regions of the country, must be able to access needed federal research funds," states the report.

A second research-related recommendation calls for $235 million over seven years to fund the Long Range Plan for Canadian Astronomy and Astrophysics. The Committee deems astronomy as an area "in which we currently enjoy an advantage" — an assessment that's in line with a recent report by the Canadian Council of Academies (R$, September 19/06). It also appears to finally respond to the six-year-old recommendations of an expert panel that called for $264 million over 10 years (R$, May 12/00).

The scientific research and experimental development (SR&ED) tax credit program is the focus of the third R&D-related recommendation. The Committee calls for unspecified changes to the tax credit "following consultations with relevant stakeholders to be implemented by June 30/07.

The Committee heard many other recommendations from a wide range of organizations. Although they did not make the formal list of recommended actions, that does not mean that they will not be considered by the government when formulating measures for the next Budget. They include:

* $1 billion for the Canada Foundation for Innovation between 2007 and 2010;

* a new space plan replacing the 1994 version;

* $380 million over three years for Genome Canada — a request supported by Genome BC and Genome Prairie;

* $130 million annually for fuel cell and hydrogen R&D between 2006-2015;

* a 30% tax credit for angel investor funding of eligible start-up companies; and,

* creation of a commercialization partnership board to review proposals for commercialization programs, as recommended by the Rotman expert panel on commercialization (R$, April 28/06).

BUSINESS ENVIRONMENT

The remaining recommendations within the report's chapter on innovation, research and entrepreneurial activity deal with the business environment. The committee recommends seven actions:

* amend Income Tax Act to increase limit for labour-sponsored funds to $1,500;

* create a co-operative investment plan in consultation with the sector, modify the Co-operative Development Initiative and extend it beyond 2008;

* create a tax incentive to encourage investment in microcredit initiatives;

* expedite the review of the Canada-US tax treaty to address Canadian recognition of US limited liability corporations;

* eliminate the use of tax havens to ensure that all corporations, businesses and individuals "pay their fair share of taxes";

* undertake a cost-benefit analysis of existing and few federal regulations to ensure their benefits outweigh compliance costs for business;

* meet with provincial and territorial governments "with a view to eliminating unnecessary barriers to interprovincial/territorial trade"; and,

* conclude an agreement with the provinces and territories to establish a single securities regulator that should begin operations by June 30/07.

R$