Flurry of activity around federal labs suggests government getting ready to move on making management changes

The future of Canada's federal laboratories has been placed under the public policy microscope while the Harper administration ponders the feasibility of transferring some facilities to the academic sector. The government's decision to examine the issue of federal labs comes as the Treasury Board Secretariat (TBS) undertakes an analysis of federal labs — the Federal Laboratories Infrastructure Project (FLIP). And it closely follows the publication of controversial articles in the CanWest newspaper chain highlighting an obscure Industry Canada study which concludes that the effect of government R&D "is at best nil".

That Industry Canada report has itself been the focus of intense scrutiny, with both the National Research Council (NRC) and the Conference Board of Canada (CBoC) examining its methodology and conclusions. NRC analysts have generated a modified version of the economic model used by the authors of the Industry Canada paper and produced dramatically different results. NRC's preliminary findings — presented to a December/06 meeting of the Federal Partners in Technology Transfer (FPTT) organization — conclude that "the effect of government R&D on productivity is positive and significant in the long run".

The announcement that the government was considering the transfer of a number of unspecified, non-regulatory labs was made in the Advantage Canada document, released along with Finance minister's Economic and Fiscal Update last November. It has raised a complex welter of issues ranging from the sorry state of equipment and facilities at many laboratories to the legal status of laboratory employees and the challenge of finding or transferring appropriate management skills to run the facilities within Canada's universities. It has also raised suspicions about the timing of the media reports, which are being viewed by some as an attempt to enhance acceptance of radical change.

Several observers – speaking on condition of anonymity – say renewed interest in the transfer of federal labs and exploration of different models has the mark of Kevin Lynch, clerk of the Privy Council Office and former DM at both Finance Canada and Industry Canada.

"(Lynch) always thought this was an issue worth pursuing. It's been looked at since the late 90s," says one official. "In the Advantage Canada document, there's an indication of the government's thinking but it's not well thought out."

studies underway

To rectify that shortcoming, Industry Canada has established a working group to respond to the Advantage Canada statements on federal labs. It is working closely with TBS, which is in the midst of the first phase of the two-phase FLIP project — a relationship that could deepen once TBS designs methodologies for examining the assets and equipment in federal labs and how to govern them.

"The data we're putting together could provide a baseline for other initiatives and Industry Canada could be one of them," says Marcel Chiasson, TBS's executive director, industry, science, regional development and regulatory issues. "It will explore options for managing federal investments including partnerships with universities and industry and to support the Advantage Canada role. This is about leadership of public sector research and linkages."

The FLIP project predates the government's Advantage Canada statement on federal labs. It was launched last August at the behest of a steering committee of ADMs representing the various science-based departments and agencies, and co-chaired by Helen McDonald, assistant secretary of TBS's economic sector branch and Don DiSalle, NRC's VP corporate services.

"As the Government reinvests in its science capacity, it will explore opportunities to transfer the management of … some non-regulatory federal laboratories to universities in order to lever university and private sector strengths, create better learning opportunities for students and foster research excellence."

— Advantage Canada, Economic & Fiscal Update

Chiasson says the FLIP is still in an embryonic stage, with the initial phase stretching into the summer months. A decision will be made on whether to move into phase II once the results of phase I are examined by the ADM committee.

If the second phase is approved, it will be looking at various models for governing federal S&T infrastructure, ranging from lab clustering with other federal labs, with universities and with industry.

Analysis of the role of federal laboratories and the R&D they conduct is nothing new. The Council of Science and Technology Advisors (CSTA) has been at the forefront of examining the issue for several years, releasing several public reports. Its 1999 report, Building Excellence in Science and Technology (BEST), has been influential in establishing concurrence on why public R&D is necessary and what principles it should follow for maximum impact and value for money.

"The principles established in the BEST report are still current and it leads to our LINKS (2005) report," says Dr Alan Winter, a long-time CSTA member and current deputy chair. "There are some very innovative management styles between federal labs and universities."

union protests

Nevertheless, the decision to review lab management has drawn a critical response from the Professional Institute of the Public Service of Canada. PIPS is the union that represents federal managers, including more than 12,000 S&T professionals. An article written by its president, Michele Demers, says the media reports "misrepresent" the Industry Canada report by "over exaggerating the paper's claims that government R&D is of limited value".

It notes that NRCan's Materials Technology Laboratory (MTL), which is being transferred to McMaster Univ, has suffered staffing cuts of more than $2 million annually, further complicating and delaying a process that has dragged on for years. Interestingly, MTL's unique facilities are currently being accessed by researchers from McMaster through the novel Academic User Access Facility program. The program is partially funded by the Natural Sciences and Engineering Research Council.

Government insiders say there are a variety of options that should be considered under the current re-evaluation of federal labs beyond their transfer to universities and question the ability of universities to take on the responsibility for the labs. They add that the direction suggested in Advantage Canada could have profound repercussions on the way federal S&T is conducted and how it interacts with other sectors — a scenario that could be exacerbated by methodology utilized in the Industry Canada report..

"A lot of people are worried about the Industry Canada results. There are huge implications for this," says one official. "

"The government has to do a better job of measuring performance," says another official. "We need Canada-specific data and to make policy decisions based on that."

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