Québec 2018 Budget: $1B in research and innovation to implement advisory council recommendations, SQRI

Veronica Silva
April 17, 2018

Last month, Québec tabled its 2018 budget, which includes more than $1 billion for research, innovation and economic growth, reflecting several recommendations made by the Advisory Council on the Economy and Innovation. The Budget is the first substantive follow-up to the five-year Québec Research and Innovation Strategy (SQRI), which was launched in the spring of 2017 shortly after the release of that year’s provincial Budget (R$, April 2017).

Aside from measures designed to assist businesses of all sizes to innovate, the province’s research and innovation agenda within the Québec Economic Plan, supported in part by the Infrastructure Plan, focuses on key strategic sectors and support for initiatives and partnerships with the federal government and other provinces.

Businesses

The budget is providing support for small- and mid-sized businesses (SMBs) to the tune of $66.2 million up to FY2022-23 for research and innovation.

One of the innovation plans is to create Le Réseau200 with $10 million over the next five years to help SMBs who are ready to grow internationally. The creation of Réseau200 is one of the recommendations of the Advisory Council on the Economy and Innovation, formed in fall 2016. The new office aims to bring together young SMBs with annual income of more than $5 million to be coached by peers. Réseau200 will rely on contributions from participating businesses and other institutional investors, such as Investissement Québec.

Other SMBs can get help from accelerators and incubators, for which Budget earmarked $35.4 million. Some $10 million of these funds will go to business support programs at HEC Montréal, Montréal Creative Destruction Lab and launching NextAI at HEC Montréal. Another $8 million will support the Mouvement des accélérateurs d’innovation du Québec, a province-wide alliance of accelerators and incubators, to help SMBs.

Carlos Leitão, Québec’s minister of Finance, said in a statement that aside from tax relief -- reaching up to $2.2 billion – for SMBs, the province is also supporting SMBs “to help them be more innovative and raise their level of performance, and to give them the desire and the  ability to invest more in their development.”

CRIQ restructuring

To help businesses of all sizes market their innovations, Québec’s Budget 2018 also provides $172 million up to FY2022-23. The bulk of the funds targets the mobilization of projects, but there’s also $22.5 million in the budget to restructure the nearly 50-year-old Centre de recherche industrielle du Québec (CRIQ) to make it more responsive to business needs.

“Much like in the federal budget – where they are repurposing or reimagining the National Research Council of Canada – Québec  is also repurposing its own research organization, the Centre de recherche industrielle du Québec (CRIQ),” says Paul Dufour, a science policy historian, and senior fellow and adjunct professor, Institute for Science, Society and Policy, Univ of Ottawa. “They’re repurposing it to help develop a business model that’s more focused towards industry and support industry by providing funding for entrepreneurship and training.”

CRIQ is also getting $20.8 million from Québec’s Infrastructure Plan 2018-2028 to upgrade its equipment and to improve its locations in Québec and Montréal, allowing it to open regional satellite offices in other cities in the province. CRIQ is expected to self-finance $5.2 million of the infrastructure cost for a total budget of $26 million.

Upgrading the province’s research infrastructure is another recommendation by the advisory council. Aside from CRIQ, Université de Sherbrooke can also purchase new equipment – for prototyping and tooling – with $20.5 million in the budget. The equipment is for the university’s efforts to help research projects in microelectronics and train highly skilled workers. This project addresses the government’s goal to support industries in innovative manufacturing and artificial intelligence (AI).

Sectors

AI is one of the key strategic sectors that Budget 2018 funds. The other sectors are life sciences, fintech, clean tech, biofood, construction, maritime, and the natural resources sectors, including forestry and mining. Some common research and innovation support projects for these key sectors are training, providing access to capital and technologies or equipment acquisition.

“They (Québec government) are focusing on their areas of strength. All of these fall under their five-year research and innovation strategy … into developing all the knowledge and infrastructure that’s strategic to Québec,” says Dufour. “A lot of what they (Québec ) are trying to do  is encourage more transition of support for knowledge and research to other benefits of the economy.”

Part of the backing for these key sectors is in conjunction with other funding initiatives and partnerships. Examples are the federally funded Innovation Superclusters Initiative (ISI) where Montreal-based SCALE.AI is one of the beneficiaries. To maximize opportunities from SCALE.AI, which will involve partners in the Québec-Windsor corridor, the province is allotting $60 million to develop supply chains optimized by AI.

Another is the ongoing partnership with Ontario in life sciences, which will get a $50-million boost. The Ontario-Québec life sciences corridor has been identified as one of the leading life sciences clusters in North America.

In a statement, Innovative Medicines Canada noted the provincial government is keen to support the Québec life sciences sector, which could encourage more pharmaceutical research in the province.

"We are pleased that the (Québec 2018-19) Budget meets some of our recommendations, and we reiterate our cooperation in achieving the ambitious targets of the Québec  Life Sciences Strategy," added Stéphane Lassignardie, general manager of AbbVie Canada and chair of the Québec Committee of Innovative Medicines Canada, which represents Canada’s innovative pharmaceutical industry . "We want to work with the government to identify solutions to ensure faster access to innovative medicines for Québec  patients."

Budget 2018 is also supporting centres of excellence in the life sciences sector -- the Institute for Research in Immunology and Cancer – Commercialization of Research (IRICoR) and the Québec  Consortium for Industrial Research and Innovation in Medical Technology (MEDTEQ) for a total of $9 million. This funding is on top of $17.8 million already set aside for these two research centres under the Québec Life Sciences Strategy and the SQRI.

In a statement, IRICoR said the support from Ministère de l’Économie, de la Science et de l’Innovation will help the centre support more investigators not only in Québec but those in the rest of Canada and abroad. The government funding facilitates researchers to access cutting-edge technology at IRICoR “thus translating their scientific innovations into therapeutic solutions that will benefit patients," said Nadine Beauger, CEO of IRICoR.

“If you look at these sectors, in particular life sciences and biosciences, these are areas where these three jurisdictions (federal, Ontario and Québec ) are very strong, and they’re essentially trying to encourage them (sectors) and grow them,” says Dufour. “Clusters is a way of orchestrating this (new way of doing business). They have the Ontario-Québec corridor partnership. … They’re trying to talk to each other, which I think is good, which is more of what we need – a pan-Canadian approach.”

Aside from supporting the SCALE.AI supercluster, Québec  is also supporting marketing of innovative businesses with $5 million for the creation in Montréal of the World Artificial Intelligence Organization. This initiative banks on Montréal’s reputation as an AI hub where some of the leading local and international AI organizations have set up headquarters.

Budget 2018 also targets R&D and innovation aimed at regional economic development. It commits funding for innovation in the forestry sector, including $25 million over the next five years for Programme Innovation Bois, a program launched in 2016 to encourage applied research and the creation of innovative forest-based products and processes.

Another beneficiary of Budget 2018 is FPInnovations, a public research organization, receiving $6.5 million to train highly qualified people and take advantage of resources in the province’s hardwood forests.

The mining sector will also benefit from this focus on regional development. Budget 2018 commits $21.5 million by FY2020-21 to support research bodies in the sector, including the Consortium de recherche appliquée en traitement et transformation des substances minérales.

Complementary budgets

Dufour notes that the federal and some provincial budgets are complementary, highlighting related emerging technologies that are quite similar to the focus topics of the G7 summit preparations for the G7 Summit that Canada is hosting this June. Having different levels of government putting attention on the same sectors is essential for encouraging more effective science diplomacy with our partners, he adds.

R$

R&D and innovation measures in the March 2018 Quebec Economic Plan*

(in millions of dollars, up to FY2022-23)

Stimulating the growth of Québec SMBs: Creation of Réseau200, Support for accelerators
and incubators, Enhanced support for the creation of centres of excellence, Transformation of SMBs, Digital
 transition in the tourism
 industry 66.2
Increasing available financing for SMBs: Teralys
Capital, ACET Capital II fund 63.5
Supporting Appropriation and Marketing of Innovations by Businesses: Mobilizing projects, Restructuring of the CRIQ’s business
model, For CRIQ to improve its infrastructure (included in Infrastructure Plan), Increased financial support for niches of excellence in the regions, Support for creation of the World Artificial Intelligence Organization in Montréal, Support for the Université de Sherbrooke’s project of an integrated innovation chain for digital prosperity 197.5
Accelerating business investment: Increasing and extending additional capital cost allowance to support acquisition of cutting-edge technologies 241
Supporting key sectors: innovation and training in the biofood industry, Biofood investment in Infrastructure Plan to support innovation and training, Clean tech action plan and venture capital, Creating a cluster in the construction sector, Maritime sector: Establishment of the Fonds Bleu and Funding for the Réseau Québec maritime, Fintech: Supporting the creation of a
centre of excellence in financial technologies at Finance Montréal, Fonds d’accélération des collaborations en santé, Montréal Clinical Research Institute 256.4
Support for life sciences sector: Québec-Ontario 
life sciences partnership, Access to research data, Centres of excellence
in the life sciences sector, 102.5
Promoting the economic development of all regions : Economic diversification: Fonds d’aide aux initiatives régionales for the Gaspésie–Îles-de-la- Madeleine region and Centre de recherche sur les milieux insulaires et maritimes and Fonds de diversification économique pour le territoire de la MRC des Appalaches, Forestry Sector: Programme Innovation Bois and FPInnovations, Mining sector 105.8
Protecting the environment: innovation in energy efficiency and the reduction of GHG emissions, Innovative energy transition fund, production of residual forest biomass-based bio-oil 41.9
Total R&D and innovation funding 1,074.8

Source: The Quebec Economic Plan: Economic Development Measures

*Editor’s Note: Diligence has been exercised to ensure that all of the R&D and innovation initiatives and projects in Quebec Budget 2018 have been included in this table.


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