Money for overhead costs and social sciences

Martin's mini-budget targets the CFI for $500 million in new funding

Canada's research community was the surprise beneficiary of the Liberal administration's pre-election Economic Statement and Budget Update this week, with the announcement of $500 million in new funding for the Canada Foundation for Innovation (CFI) and $100 million over five years for the Social Sciences and Humanities Research Council (SSHRC) (see page 2). Both awards are for new targeted initiatives and represent a remarkably rapid response by government to pressures identified by the science and technology (S&T) community as requiring urgent attention.

The new initiatives help the Liberals devote a portion of its escalating budget surplus towards implementing its strategy for the New Economy, as outlined in Finance minister Paul Martin's speech to the Toronto Board of Trade in September (R$, October 2/00). But they also simultaneously address issues such as international S&T, the indirect costs of federally funded research, education research and the need for Canada's business schools to improve their research efforts.

The research funding comes amidst a budget update that includes the kinds of pre-election measures one invariably expects from a government riding the good fortune of a booming economy and surplus cash. Debt reduction, tax cuts to the middle class and an acceleration of previously announced cuts to business taxation levels are all geared to promote the Liberal agenda of strategic spending to stimulate productivity, wealth creation, while reinforcing its mantra of balanced fiscal management.

But for the CFI, the new funding is both welcome and timely regardless of the motives for its provision. The $500-million award brings the amount it has received in this year alone to $1.4 billion. That brings its total allocation to $2.4 billion, which represents spending power of $6 billion once the matching contributions of provincial governments and other sources are factored in.

"It's just staggering," says CFI president Dr David Strangway. "(Finance DM) Kevin Lynch and Paul Martin seem to like us and they obviously like to put short term money into the CFI."

Of the $500 million the CFI received, $400 million will be used to cover operating costs associated with new project awards - the first time the federal government has provided this type of funding on such a scale. The indirect costs of research have long been identified as a major gap in the federal funding of university research, and the CFI announcement will certainly raise anticipation of much more to come. A change in the legislation governing the CFI will be required before it can use the funds for their intended purpose, as its current mandate specifies that its project awards be used exclusively for capital expenditures.

"To my knowledge, this is the first government response to the question of overhead costs, but whether it's a response to explicit pressures or the first shot in a larger response, I can't say" says Strangway. "This money explicitly makes it possible to incorporate operating costs in proposals we are calling for in January."

Dr Gilbert Normand, secretary of state for science, research and development, confirms that the $400 million in new CFI funds is the first instance of federal support for indirect costs and says there is more to come. He also indicated that the next Budget would contain funding for the National Research Council and the Natural Resources and Engineering Research Council.

The remaining $100 million in new CFI money will allow Canadian researchers greater participation to international facilities. The new directive will require funding agreement changes that must be approved by the CFI board of directors as well as the ministers of Finance and Industry. This represents a key plank in a report on international S&T released on the same day as the economic update (see page 3). The money is in addition to the $100 million the CFI previously announced for Canadian participation in large international research projects.

The CFI announced that it planned to introduce a new program element for international S&T, but it was still awaiting government approval. Strangway says the additional $100 million for the international research indicates the government is ready to sign the required agreement. He adds that it will be at least two months before the details of the new international program are worked out and announced.

Martin also indicated a change in the requirements for smaller universities applying for CFI funding under the Canada Research Chairs Program (CRCP). Now those institutions will not have to find matching funds from other sources to be eligible, and can apply for up to $75,000 per chair. Under the CFI's allocation formula for the CRCP, 6% or $15 million is set aside for smaller universities.

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