National Research Council receives new funding, flexibilities; IRAP boosted to handle larger projects

The National Research Council (NRC) and its Industrial Research Assistance Program (IRAP) will receive $148 million in new funding through the 2018 federal Budget to support a “reimagined” NRC calibrated to deliver on the federal government’s Innovation and Skills Plan. The fresh funding - augmented with $59.6 million in temporary funding converted to permanent, ongoing support - comes in the wake of NRC’s year-long Dialogue exercise that consulted with staff and external stakeholders to forge a new vision and strategic direction for the 101-year-old organization.

Budget documents state that the NRC’s planned expenditures for FY18-19 will increase from $937 million to $1.1 billion once the new measures are further delineated, approved by Treasury Board and enacted.

“I’m very very happy. If you think about the Budget treatment of the NRC, the discussion of the NRC, the role of NRC and the role of NRC-IRAP in the Budget, in the innovation agenda, it’s a very affirming government statement of the role that the NRC plays,” says NRC president Iain Stewart. “The money is a mix of operating funding and contribution funding and that has unlocked an ability for the NRC to make choices about what is core, long-term capability we want to invest in, and what stuff that is needed for the moment or an area where we’re not necessarily the experts. And so we can now collaborate.”

New initiatives include $30 million a year for a DARPA-styled program for multi-party R&D projects involving business and post-secondary institutions. DARPA - Defense Advanced Research Projects Agency – is a 60-year-old US program to develop emerging technologies for use by the military and characterized by often short-lived programs depending upon current government needs.

“There are three conceptual streams … There’s the idea of challenges in a DARPA-like fashion. Very important. There’s partnering with superclusters. And thirdly in that mix there (is) the idea of foundational, disruptive programs,” says Stewart.

The Budget also provided $6 million annually for breakthrough research ideas through a peer-review, competitive ideation program.

Of the $108-million annual increase allocated to the NRC, $59.6 million is money the organization currently receives in the form of B-based or temporary funding for a now-defunct cluster initiative, launched under former NRC president Dr Arthur Carty and curtailed under former president John McDougall. The Budget announced that it will be converted into permanent funding and added to the organization’s A-based (permanent) funding – a move Stewart describes as “the single biggest announcement for the NRC in the Budget”.

Beyond the newly designated A-base funding, the other part of the $108 million in the Budget is $48.4 million in new money which will go directly to the NRC’s laboratories.

“$48M a year for the labs ongoing, incremental funding has not happened in a long time. If you look at our financials, it hasn’t happened since the clusters initiatives of 2000, 2001 and 2002. It’s the first time, therefore, in 15 to 18 years that the Council’s labs have received new funding. And remember our base appropriation for operating is about $473 million, so it’s about 10%,” says Stewart. “Having the NRC have both operating and contribution funding to collaborate with the university, polytechnic and colleges community, gives us a fantastic flexibility … The Budget really has materially enabled us to use collaboration and the creation of teams that mix our own staff and external communities in a very powerful way.”

The new NRC funding includes $12.4 million a year that will be used to lower access fees for small- and medium-sized enterprises and academic institutions. Stewart says the money will allow fees for labour costs to be lowered by 40% across the board.

“We learned over time that we had priced ourselves out of relevance to a large part of the SME community and the academic community. We noticed the impact, there was a decrease in their use of our services over time,” says Stewart. “Because we’re revenue based, you can’t just drop your fees when part of your salaries are being paid through earned revenues. We said (to ministers) we’d like to do this but we need to be held financially whole and the $12.4 million holds us financially whole for the revenue impact and therefore the general resources available to the organization.”

IRAP

NRC-IRAP is also receiving new funding to facilitate an increase in the contribution size it can make to an R&D project from $1 million to $10 million. IRAP will receive $100 million more in FY18-19 and $150 million thereafter, increasing its annual budget from $270 million to $420 million – an historic high. The increase allows the Strategic Innovation Fund – a consolidated program operating out of Innovation, Science and Economic Development (ISED) -- to focus on projects beyond the $10-million threshold and strengthens government-wide integration of its programming.

“The level of funding IRAP was able to provide has statistically been under $200,000 per project on average. For many projects and companies, that level of financial support is actually inadequate … The government would like to see IRAP providing large project support. So a company that’s getting bigger, has a more ambitious project, might need more than $1 million and in fact the Budget enabled that to go to $10 million,” says Stewart. “This new funding will require integration with other programs like the Strategic Innovation Fund and the Business Development Bank of Canada. (ISED minister Navdeep) Bains is responsible for all of us and he’s looking to us to have an integrated portfolio approach. And John Knubley, our deputy (minister), is leading that discourse among officials to work out a better and more harmonized, integrated package among the different supports into the innovation system.”

The Budget also announced that IRAP is losing its Concierge program, which will be moved to ISED and consolidated with the new Innovation Canada’s Accelerated Growth Service (AGS) program. The AGS will have four flagship programs, the others being the Strategic Innovation Fund, Canadian Trade Commissioner Service and the regional development agencies (RDAs).

Stewart says the move of the NRC Concierge program to ISED is still in the early stages but that he supports the concept and wants to move forward in a way that’s respectful of the employees involved.

“ISED - with the new role - is trying to provide that coordination so it makes a lot of sense to have the interface team that’s out in the community helping companies find what is the right program,” he says.

Federal lab renewal

The NRC was also explicitly mentioned in the Budget announcement of a major renewal of federal laboratories that will see an outlay of $2.8 billion to construct several “multi-purpose” federal S&T facilities. Stewart says it’s far too soon in the process to say how much or whether NRC will receive any of the funding, but he acknowledges that it is developing a proposal in conjunction with Natural Resources Canada and Environment and Climate Change Canada. Public Services and Procurement Canada (PSPC) will develop the infrastructure program and manage its implementation.

“It’s not a given, not a forgone conclusion. The Budget announced an opportunity and we are organizing ourselves in order to respond to an opportunity. But Public Works will have a process around who gets funded,” says Stewart.

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