National Research Council gears up for funding renewal and possible reallocation

Guest Contributor
December 21, 2004

Raymont requests new A-base funding

The National Research Council (NRC) has made changes in its executive ranks to undertake a dual-track process of renewal and possible reallocation of funds under the government’s controversial expenditure review initiative (R$, November 9/04). The appointment of Dr Sharif Barakat as VP Renewal and Reallocations with a two-year mandate coincides with the creation of a DG-level Strategy and Priorities (S&P) Committee to provide input on both processes and the appointment of Marielle Piche as director, reallocations project reporting to Barakat.

The beefed-up executive suite comes during a period of uncertainty at Canada’s premier agency for industrial research. It has taken one year to announce a permanent replacement for Dr Arthur Carty following his appointment as national science advisor (see page 1), making it difficult to fill vacant positions at the VP level. And many of the NRC’s regional cluster initiatives are facing budget expiry at the end of the current FY as they were not funded through increases to the agency’s A-base.

As NRC officials work to comply with expenditure review and advocate an increase in A-based funding, there has been a reconsideration of how to approach the renewal process, which has been in various stages of planning for at least the past year. Previous scenarios calling for a dramatic overhaul of the NRC have given way to a more measured approach that seeks change from a base that remains fundamentally unchanged.


Interim president Dr Michael Raymont likens the process to renovating a house, completing necessary upgrades but leaving the structure intact “to keep the old charm and values”.

“It’s rapid evolution rather than revolution. A revolutionary process discounts what the NRC is and that’s impractical,” says Raymont. “I like to call it re-engineering on the fly. This does not imply lack of strategy or deep careful thought. It means that you modify and alter structures as you go along.”

Raymont says the renewal process will proceed on a separate but parallel track to the reallocation exercise, although the two initiatives could merge if it’s determined that the agency must stop funding activities that are deemed expendable. According to the expenditure review exercise, every department and agency must identify 5%, 7% and 10% of their budgets for possible reallocation, based on the Main Spending Estimates.

“The Renewal Project will be a very critical one for NRC. NRC needs to be an organization that is sustainable, responsive to customers needs, recognized and valued by its customers and … an enjoyable place to work. To achieve this, we need to take stock, identify our core competencies and determine our mission and priorities. Once this has been done, we will need to develop a set of key strategic outcomes and focus our initiatives in order to meet these objectives.”

— December 7/04 Letter to Staff from Dr Michael Raymont

For the NRC, that translates into $25 million, $35 million and $50 million respectively. Decisions made under expenditure review will require departments and agencies to reallocate within their organizations, or funding could actually be taken away and used in areas deemed higher priority.

“It may not happen at all. Reallocation has clear implications. It may not be taken out of the system but it could be. The biggest strain is not knowing. It’s hard to have a plan when you are subject to being battered about by things beyond your control,” he says. “In a sense this is the sort of thing we should be doing anyways. Organizations should always look at ways to reallocate and renew.”


The newly constituted S&P Committee has been conceived as a permanent body and will initially focus on renewal. It will seek broad input from external stakeholders and within the NRC, filtering ideas and providing support for the NRC executive committee. It’s hoped that a clear, high-level direction will emerge in about six months, with another six months to flesh out concepts.

Raymont says the most probable scenario is a renewal strategy in which problem-driven research becomes the NRC’s central focus.

“Problem oriented research means developing solutions that may involve basic research as well as applied. It’s an approach that is more oriented towards the outcome and less concerned about activities,” he says. “We need to align disparate NRC activities to focus on the outcomes and needs of the customers, which are government and industry.”

In the event that NRC must reallocate funds outside of the organization, it has decided that the preferred approach will be selective rather than across-the-board cuts. Raymont likens it to a “less with more” approach whereby the NRC will engage in fewer areas of research and support those activities with enhanced resources.

It’s an operating philosophy that complements the NRC’s community-based cluster strategy which has seen the creation of several new institutes and incubation facilities across the country.


Raymont stressed the importance of continued support for the NRC’s cluster strategy in his November 23 presentation to the Standing Committee on Finance. His address included a specific pitch for A-based funding to continue the NRC’s Atlantic Canada initiatives.

“A topic that must be addressed in this budget cycle is that there is an urgent need to reaffirm and renew the government’s commitment to building on community-based technology strengths, network, and collaborations,” he stated. “This year, the five-year funding for the Atlantic technology cluster initiative ends, and we’re hoping that the government not only renews it but more importantly makes it an ongoing A-based commitment to the region.”

The request to expand NRC’s A-base funding cuts to the heart of a growing problem within the organization that has had a negative impact on virtually every institute. While the NRC is being asked to do more, it has not received the necessary permanent funding to maintain scientific excellence in the areas it has chosen to operate.

“We’ve gotten to the point where we’ve cut all the fat and some muscle. That’s not good because we’re starting to lose efficiency,” says Raymont. “The NRC is an excellent organization and it can’t afford to drop down to mediocrity... We’ve had to absorb many increases in operational costs. It’s death by 1,000 little cuts.”


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