Archived - Chapter 4.3: Investing in Innovation, Education and Training  (March 22, 2011)

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Highlights

Driving Innovation—Canada’s Digital Economy Strategy

The Next Phase of Canada’s Economic Action Plan sets the stage for the Digital Economy Strategy to make Canada a leader in the creation, adoption and use of digital technologies and content. Budget 2011 measures include:

• Providing $80 million in new funding over three years through the Industrial Research Assistance Program to help small and medium-sized businesses accelerate their adoption of key information and communications technologies through collaborative projects with colleges.
• Announcing $60 million over the next three years to promote increased student enrolment in key disciplines related to the digital economy.
• Providing funding of $100 million per year to the Canada Media Fund for investments in the creation of digital content across multiple platforms.

Strengthening Canada’s Research Advantage

The Next Phase of Canada’s Economic Action Plan announces new resources to support leading-edge research, international collaborations, health research of national importance, and the creation of world-class research centres in Canada. Budget 2011 measures include:

• Investing an additional $37 million per year to support the three federal research granting councils.
• Providing an additional $10 million per year, for the Indirect Costs Program, for costs such as those related to operating and maintaining facilities.
• Investing $53.5 million over five years to support the creation of 10 new Canada Excellence Research Chairs.
• Allocating up to $100 million to help establish a Canada Brain Research Fund to support the very best Canadian neuroscience, and accelerate discoveries to improve the health and quality of life for Canadians who suffer from brain disorders.
• Providing an additional $65 million for Genome Canada to continue its groundbreaking work.
• Investing $4 million over three years to support the construction of a cyclotron for the production of medical isotopes at the Thunder Bay Regional Research Institute.
• Providing $35 million over five years to the Natural Sciences and Engineering Research Council of Canada to support excellence in climate and atmospheric research at Canadian post-secondary institutions.
• Providing $50 million over five years, beginning in 2012–13, to the Perimeter Institute for Theoretical Physics to support its leading research, education and public outreach activities.

Fostering Commercialization and Business Innovation

The Next Phase of Canada’s Economic Action Plan supports the creation of high-value jobs with targeted resources to improve commercialization and support demonstration of new technologies in the marketplace. Budget 2011 measures include:

• Supporting 30 new Industrial Research Chairs at colleges with $3 million in 2011–12 and $5 million a year on a permanent basis starting in 2012–13.
• Allocating $12 million over five years, starting in 2011–12, through the Idea to Innovation program to support joint college-university commercialization projects.
• Providing $40 million over two years to Sustainable Development Technology Canada to continue to support the development and demonstration of new clean technology projects.
• Supporting the operations of the National Optics Institute with $45 million over five years.

Promoting Education and Training

The Next Phase of Canada’s Economic Action Plan helps Canadians get the education and skills they need to succeed with new budget measures that include:

• Enhancing and expanding eligibility for Canada Student Loans and Grants for part-time and full-time post-secondary students with an investment of over $34 million a year once fully implemented.
• Investing $9 million over two years to expand adult basic education programming in the territories to increase employment opportunities for Northerners.
• Providing up to $10 million a year in tax relief and Registered Education Savings Plan assistance to the increasing number of Canadian post-secondary students who study abroad.
• Providing $10 million over two years to develop and implement an international education strategy that will reinforce Canada as a country of choice to study and conduct world-class research.
• Encouraging skills certification by making all occupational, trade and professional examination fees eligible for tax relief.

Knowledge and innovation are the drivers of success in the 21^st century global economy. In order to be a world leader in knowledge and innovation, Canada must attract and develop talented people, increase our capacity for world-leading research and development, improve the commercialization of research, and promote education and skills development. The Government has made a number of significant investments to date that will help Canadians prosper, including:

• Development of a new Science and Technology Strategy to drive new investments in innovation, science and technology, including significant funding to the federal granting councils, Genome Canada, Centres of Excellence for Commercialization and Research, business-led Networks of Centres of Excellence and the Automotive Innovation Fund, as well as numerous investments in research infrastructure.
• $750 million to the Canada Foundation for Innovation in Budget 2009 to support leading-edge research infrastructure.
• Up to $2 billion dedicated under the Knowledge Infrastructure Program to repair, retrofit and expand facilities at post-secondary institutions.
• Introduction of the Canada Excellence Research Chairs, as well as the Vanier Canada Graduate Scholarships and the Banting Postdoctoral Fellowships.
• Modernization of the Canada Student Loans Program, introduction of the new Canada Student Grants Program, strengthening of the Registered Education Savings Plan, exemption of scholarship and bursary income from tax, and introduction of the Textbook Tax Credit.
• $8.3 billion in support under the Economic Action Plan to help Canadian workers and their families weather the recession and provide them with the necessary training and tools to transition into new jobs as quickly as possible.
• Investing $3 billion over six years for new Labour Market Agreements to address the gap in labour market programming for those who do not currently qualify for training under the Employment Insurance program and to improve the labour market outcomes of under-represented groups such as older workers, Aboriginal people, recent immigrants and persons with disabilities.
• Through the Aboriginal Skills and Employment Partnership initiative, investments of $205 million to support partnerships between governments, the private sector and Aboriginal organizations to help Aboriginal people benefit from valuable skills training and employment opportunities.
• A streamlined immigration system to better respond to the needs of the labour market, and the development with provinces and territories of a common approach to facilitate the recognition of foreign credentials.

Going forward, Canada needs to be a leader in research, innovation and technology adoption to succeed in the global knowledge economy. The Next Phase of Canada’s Economic Action Plan will continue to promote innovation as a key driver of long-term economic growth and employment, and to help Canadians acquire the skills they need to thrive in today’s labour market.

The Government will continue to provide support for research and Canada’s public research infrastructure, while seeking to increase the impact of its investments by levering contributions from the private sector and other levels of government in national projects and commercialization partnerships. It will continue to help Canadians acquire the education and skills they need to succeed through direct financial support and incentives for students, as well as targeted measures to support skills training, apprenticeships and lifelong learning. It will continue efforts to attract the best foreign students and immigrants to Canada while taking steps to facilitate their integration into Canadian labour markets.

Budget 2011 advances these priorities through actions in support of the new Digital Economy Strategy, additional support for leading-edge research, assistance to bring research to the marketplace, and investments in education and skills training.

Driving Innovation—Canada’s Digital Economy Strategy

The digital economy is woven into the fabric of our modern economy. Digital technologies power activities in all areas of the economy, from manufacturing and transportation to advanced telecommunications and Web-based services, and provide a platform for all sectors to be more innovative and productive. Leadership in the creation, adoption and use of digital technologies and content will help Canada to increase its world-class standard of living.

In the summer of 2010, the Government held nationwide consultations to seek the views of Canadian industry, creators and consumers on how Canada can build a globally competitive digital economy by 2020. Budget 2011 sets the stage for the release of Canada’s Digital Economy Strategy later this spring by introducing new measures focused on accelerating adoption of information and communications technologies at small and medium-sized businesses, preparing students for careers in the digital economy, and building Canada’s digital content through the Canada Media Fund.

Accelerating Adoption of Information and Communications Technologies

As Canada enters the digital age, the small and medium-sized businesses that drive our economy have an opportunity to maximize their growth potential by adopting information and communications technologies. Colleges, with their linkages to local industry and access to cutting-edge technology and skills, are ideally placed to develop technological solutions that respond to the challenges faced by small and medium-sized businesses. The National Research Council’s Industrial Research Assistance Program has experience in working with colleges and innovative small and medium-sized businesses.

To support the development of Canada’s digital economy, Budget 2011 announces $80 million in new funding over three years for a pilot initiative, delivered through the Industrial Research Assistance Program, to support collaborative projects between colleges and small and medium-sized businesses to accelerate their adoption of information and communications technologies.

In addition, as part of the Government’s effort to strengthen Canada’s research advantage, Budget 2011 announces $53.5 million over five years to support the creation of 10 new Canada Excellence Research Chairs. Some of these new research chairs will be active in fields relevant to the Digital Economy Strategy.

The Government is also renewing the Community Access Program for an additional year.

Building Digital Skills

The ability of Canadians to effectively use new digital technologies will be crucial to Canada’s success in the global digital economy. Budget 2011 announces that Human Resources and Skills Development Canada will reallocate $60 million in funding over the next three years to promote enrolment in key disciplines related to the digital economy such as science, technology, engineering and mathematics.

Showcasing Canada’s Digital Content

The proliferation of new media platforms and technology provides an unprecedented opportunity to showcase Canadian creativity, innovation and talent. To this end, Budget 2011 provides funding of $100 million per year for the Canada Media Fund, which invests in the creation of convergent digital content across multiple platforms, including television and leading-edge applications for Internet, wireless and other emerging platforms.

Measures announced in Budget 2011 build on other recent federal initiatives in support of Canada’s Digital Economy Strategy.

Strengthening Canada’s Research Advantage

The Government has provided significant additional resources to support science and technology since 2006, placing Canada first among the Group of Seven (G-7) countries in terms of expenditures on research and development (R&D) in the higher education sector as a share of the economy.

R&D Investment in the Higher Education Sector

Canada is positioned as a world leader in research excellence, inspiring the discoveries and innovations that create jobs, markets and opportunities in the knowledge economy. Budget 2011 further demonstrates this leadership by proposing new resources to support leading-edge research, international collaborations, health research of national importance, and world-class research centres in Canada.

Supporting Leading-Edge Research

The three federal granting councils—the Natural Sciences and Engineering Research Council of Canada (NSERC), the Canadian Institutes of Health Research (CIHR), and the Social Sciences and Humanities Research Council of Canada (SSHRC)—are the primary institutions through which the federal government supports advanced research at Canada’s universities, colleges and research hospitals. Together, the three councils provide $2.7 billion in annual resources to fund breakthrough research projects, support graduate students, and help accelerate the translation of discoveries into commercial and social benefits for Canadians.

The Government recognizes the importance of continuing to foster a strong primary research environment in Canada. Budget 2011 invests an additional $37 million per year to the granting councils, starting in 2011–12.

The new resources for the councils will be allocated as follows:

• $15 million per year to NSERC to support outstanding research in the natural sciences and engineering fields, such as the Strategy for Partnerships and Innovation.
• $15 million per year to CIHR to support advanced health-related research, such as the Strategy on Patient-Oriented Research.
• $7 million per year to SSHRC to support world-leading research in the social sciences and humanities, such as partnership activities in priority areas including the digital economy.

This allocation of new funding among the granting councils represents a higher share for social sciences and humanities research, compared to previous budgets.

Indirect Costs of Research

The indirect costs of research include operating and maintaining facilities, managing information, meeting regulatory requirements and supporting knowledge transfer. These activities are necessary to realize the greatest possible benefits from the direct research support provided by the granting councils. To ensure that the benefits from its research investments are maximized, the Government supports indirect costs associated with its direct research funding at post-secondary institutions. Budget 2011 provides an additional $10 million per year, starting in 2011–12, for the Indirect Costs Program.

Attracting World-Leading Talent

Introduced in Budget 2008, the Canada Excellence Research Chairs program helps Canadian universities attract and support world-leading researchers in areas of strategic importance to Canada. The first 19 chairholders, announced in May 2010, will each be awarded up to $10 million over seven years to establish ambitious research programs in Canada. All 19 chairholders are highly renowned researchers drawn from a variety of fields, including information and communications technologies, and were attracted from leading institutions around the world.

Budget 2011 invests a further $53.5 million over five years to support the creation of 10 new Canada Excellence Research Chairs. Some of these new research chairs will be active in fields relevant to the Digital Economy Strategy. New Canada Excellence Research Chairs will be selected through a competitive process.

As noted in Chapter 4.1, as part of the Government’s wider India engagement strategy, Budget 2011 announces $12 million over five years for a competition to select a Canada-India Research Centre of Excellence. The centre will focus on creating partnerships that bring together key individuals and organizations from Canada and India, accelerating the exchange of research results, and increasing Canada’s international visibility and reputation as a research leader.

Advancing Knowledge and Treatment of Brain Disorders

Disorders of the brain are one of the major health challenges of the 21^st century. It is estimated that one in three Canadians will face a mental illness or a neurological disorder or injury at some point in their lives. Brain Canada is a national, non-profit foundation dedicated to supporting research into new diagnostics, treatments and ultimately cures for brain disorders.

To support Brain Canada’s efforts, Budget 2011 proposes to allocate up to $100 million to help establish the Canada Brain Research Fund, which will support the very best Canadian neuroscience, fostering collaborative research and accelerating the pace of discovery, in order to improve the health and quality of life of Canadians who suffer from brain disorders. Federal funding for this initiative will be matched by resources raised from Brain Canada’s other partners.

Maintaining Canada’s Leadership in Genomics Research

Genome Canada is a not-for-profit corporation dedicated to supporting Canada’s research leadership in genomics, a fast-growing field that has significant potential social and economic benefits. Genomics research is helping Canadians to address key challenges in important areas such as health, fisheries, forestry, agriculture and the environment.

To date, the Government has provided $915 million to Genome Canada, which along with funding from other partners will support over $1.9 billion in genomics research in Canada. These resources have helped to establish Canada as a world leader in genomics research, including in the areas of cancer, infectious and rare genetic diseases, adverse drug reactions, and crop sciences. Genome Canada–funded research has contributed to the development and training of thousands of highly skilled individuals, and the creation of more than 20 new companies.

Budget 2011 announces an additional $65 million for Genome Canada to launch a new competition in the area of human health, and sustain the operating costs of Genome Canada and Genome Centres until 2013–14.

Expanding Medical Isotope Production

Research clusters generate significant economic benefits by enabling businesses to take advantage of existing research expertise and create innovative products and services. The Thunder Bay Regional Research Institute is focused on collaborative research, working closely with academic partners. Budget 2011 provides $4 million over three years to Industry Canada’s Federal Economic Development Initiative in Northern Ontario to support the construction of a cyclotron for the production of medical isotopes at the Thunder Bay Regional Research Institute.

Supporting Climate and Atmospheric Research

Budget 2011 provides $35 million over five years to the Natural Sciences and Engineering Research Council of Canada to support climate change and atmospheric research at Canadian post-secondary institutions.

Supporting the Perimeter Institute for Theoretical Physics

The Perimeter Institute for Theoretical Physics in Waterloo, Ontario, is an independent resident-based centre devoted to foundational research in theoretical physics. Since its creation in 1999, the Perimeter Institute has built a global reputation for its exceptional research environment and has demonstrated outstanding scientific merit, which has helped to attract top-tier researchers to Canada. The Institute also hosts hundreds of international researchers each year, trains promising new researchers, and undertakes outreach activities with students, teachers and members of the general public.

Moving forward, the Perimeter Institute aims to strengthen its position as a world-leading research centre for theoretical physics. The Institute is constructing the 55,000-square-foot Stephen Hawking Centre on its campus, continuing its efforts to bring world-leading faculty and researchers to Canada, and strengthening its partnerships with other exceptional research communities.

Budget 2011 proposes to provide $50 million over five years, beginning in 2012–13, to the Perimeter Institute to support its leading research, education and public outreach activities. Federal funding for this initiative will be matched by resources raised from the Institute’s other partners.

Fostering Commercialization
and Business Innovation

Canada has an opportunity to build on its excellence in advanced research to improve private sector innovation performance and the commercialization of research. To create high-value jobs, Canadian businesses need to invest in promising ideas and innovations that move new products and services into the market.

In October 2010, an independent expert panel of distinguished Canadians from the private and public sectors was established to undertake a comprehensive review of federal support for business research and development. The panel has received more than 220 submissions from interested Canadians and its consultations are underway. The Government looks forward to receiving the panel’s recommendations by October 2011 on how to strengthen the impact of federal investments in support of a more innovative economy.

In the interim, Budget 2011 announces targeted resources to improve commercialization and support demonstration of new technologies in the marketplace.

Enhancing Commercialization Through Research at Colleges

Colleges play an important role in advancing Canada’s innovation capacity. They can help to accelerate the transfer of new knowledge created at post-secondary institutions by applying it to business needs. Knowledge-based collaborations between colleges and businesses, and between colleges and universities, can help Canada’s private sector become more innovative and provide rich learning opportunities for students.

Budget 2011 provides $3 million in 2011–12 and $5 million per year on a permanent basis starting in 2012–13 to the Natural Sciences and Engineering Research Council of Canada (NSERC) to support 30 new Industrial Research Chairs at colleges. These resources will assist colleges in accelerating applied research in fields where there is an important industrial need.

Budget 2011 allocates a further $12 million over five years, starting in 2011–12, to NSERC’s Idea to Innovation program to support joint college-university research and development projects with promising commercialization potential.

Advancing Clean Technology Projects

Innovation in the clean technology sector is a driver of the Canadian economy, opening up new avenues of opportunity, creating jobs and delivering environmental benefits. Sustainable Development Technology Canada (SDTC) is an arm’s-length foundation established by the Government of Canada to assist in the development and demonstration of clean technologies on a not-for-profit basis. Budget 2011 announces $40 million over two years for grants to SDTC to continue to support the development and demonstration of new clean technology projects under the clean air and climate change component of the SD Tech Fund.

Supporting the National Optics Institute
Centre of Excellence

The National Optics Institute is a private, not-for-profit organization that provides innovative solutions and develops commercial applications for businesses in the areas of optics and photonics. Through its research, the Institute contributes to the growth of Canadian enterprises by helping them create or improve products and processes. The National Optics Institute is headquartered in the city of Québec and has a presence in Hamilton, Calgary and Montréal to help strengthen business development across Canada.

To support these important activities, Canada Economic Development for Quebec Regions will provide $45 million over five years to support the operations of the National Optics Institute in the city of Québec.

Promoting Education and Training

Canada’s long-term prosperity depends on an educated and skilled workforce that can apply its knowledge to be at the forefront of innovation. Canadians are already among the most highly educated in the world, and Budget 2011 takes further actions to preserve and enhance this advantage. Budget 2011 assists Canadians in acquiring the education and skills they need to succeed by enhancing and expanding eligibility for Canada Student Loans and Grants, improving tax recognition for educational expenses, investing in adult basic education for Northerners, and facilitating skills recognition for new Canadians. These measures are in addition to other new measures announced in this budget that promote education and skills training, including the Targeted Initiative for Older Workers and the Building Digital Skills initiative.

Enhancing Federal Student Financial Assistance

The Government provides direct financial support to full- and part-time post-secondary students through the Canada Student Loans Program, which encompasses both loans and grants. In the 2009–10 academic year, more than 400,000 students benefited from over $2.5 billion in federal student financial assistance in the form of loans and grants.

Budget 2011 will expand eligibility for Canada Student Loans and Grants for full- and part-time post-secondary students. The Government will:

• Help full-time students to earn more money by doubling the in-study income exemption from $50 per week to $100 per week. This will assist approximately 100,000 students each year by allowing them to work more without affecting their loans. This represents an ongoing cost of approximately $30 million per year.
• Allow part-time students to have higher family incomes without affecting their eligibility for a Canada Student Loan. The eligibility threshold for loans will be increased and harmonized with the threshold used in calculating need for full-time students. For example, for a single part-time student from Ontario, this means that the annual income threshold will increase from $26,100 to $40,235. This represents an ongoing investment of $2 million per year, and will allow more part-time students to have access to Canada Student Loans.
• Increase the income eligibility threshold for part-time students used to determine eligibility for the Canada Student Grant to align it with the threshold for full-time students from low-income families. The Canada Student Grant for part-time students provides up to $1,200 in non-repayable assistance to eligible students each academic year. These changes will result in an ongoing $2.2-million investment per year.

Part-time students take longer to complete their studies because they are often working while at school. During their studies part-time Canada Student Loan recipients accumulate interest while full-time students do not. Budget 2011 proposes to reduce the in-study interest rate for part-time students from prime plus 2.5 per cent to zero, bringing them in line with full-time students. This will save part-time students approximately $5.6 million per year, making part-time study more affordable for more Canadians.

With these investments, low- and middle-income part-time students will be better positioned to upgrade their skills and education qualifications so that they can make the most of their abilities and prosper in today’s changing economy. The Government of Canada will work with its provincial and territorial partners to put in place these improvements as soon as possible. The Government’s goal is to have benefits start to flow to students in the 2011 academic year. It will also ensure that growth in overall student loans reflects the needs of students.

Starting in 2012–13, the Government will also forgive a portion of the federal component of Canada Student Loans for new family physicians, nurses and nurse practitioners who agree to work in under-served rural and remote communities (see Chapter 4.2).

Investing in Adult Basic Education in the North

The Government remains committed to a long-term agenda that will make tangible improvements to the quality of life of Northerners. To ensure that more Northerners can benefit from local employment opportunities, Budget 2011 invests $9 million over two years to expand adult basic education programming in the territories. This initiative will expand territorial colleges’ literacy and numeracy programs, particularly in remote communities, to target working-age Northerners and assist them in getting the basic skills they need to join the workforce and take advantage of emerging economic opportunities.

Supporting Canadian Students Abroad

As Canadian students seek to develop the skills and knowledge needed to work in a global marketplace, the Government recognizes the importance of students pursuing the best educational opportunities available to them, whether in Canada or abroad. Currently, Canadian students who study at foreign universities must be enrolled in a program lasting at least 13 consecutive weeks to be eligible for the Tuition, Education and Textbook Tax Credits, or to receive Educational Assistance Payments from Registered Education Savings Plans (RESPs).

Budget 2011 proposes to align the minimum duration requirement applying to studies undertaken by Canadians at foreign universities with the requirement applying to in-Canada studies, by reducing the 13-week minimum duration requirement to three consecutive weeks with respect to the Education and Textbook Tax Credits. The minimum duration requirement applying to the Tuition Tax Credit and Educational Assistance Payments will also be reduced to three consecutive weeks for Canadians studying full-time at a university outside Canada. These changes will provide tax relief and RESP assistance to the increasing number of Canadian post-secondary students who study abroad.

This measure will apply for the 2011 and subsequent taxation years and is estimated to reduce federal revenues by $3 million in 2010–11 and $10 million in each of 2011–12 and 2012–13.

Extending Tax Relief to Certification Examinations

Apprentices in the skilled trades must complete certification examinations at the end of their apprenticeship in order to practise their trade. Similarly, workers in regulated occupations such as nursing, medicine, law and accounting are also required to complete examinations in order to practise their occupation. This includes foreign-trained workers, who are often required to complete additional examinations in order to obtain their professional status in Canada. The fees incurred for these examinations are generally not eligible for tax relief unless the occupational, trade or professional examination is part of a course of study and the costs of the examination are included in the course tuition fee, in which case the fees would be eligible for the Tuition Tax Credit.

Budget 2011 proposes to make all occupational, trade and professional examination fees eligible for the Tuition Tax Credit, where the examination is required to obtain a professional status, or certification or licence in a trade, that is recognized by federal or provincial statute and allows the individual to practise the profession or trade within Canada. This tax relief builds on the support provided to apprentices through the Apprentice Incentive Grant provided in Budget 2006 and the Apprenticeship Completion Grant, which was introduced in Budget 2009.

It is estimated that more than 30,000 individuals will benefit each year from this measure. The measure will apply to fees paid in respect of examinations taken in the 2011 and subsequent taxation years. This measure is estimated to reduce federal revenues by $1 million in 2010–11 and $5 million in each of 2011–12 and 2012–13.

A New International Education Strategy

Innovative and outward-looking colleges and universities are key partners in developing a diverse, skilled and internationally focused workforce. Budget 2011 allocates $10 million over two years to develop and implement an international education strategy that will reinforce Canada as a country of choice to study and conduct world-class research. Elements of the strategy will include promotion and advertising initiatives; strengthening of international representation in key markets; and the development and dissemination of market intelligence for institutions. This will strengthen our engagement with emerging economies and ensure greater collaboration between Canadian and foreign institutions. An advisory panel reporting to the Ministers of Finance and International Trade will be established to make recommendations on the strategy and to set out the contributions of all partners.

Credential Recognition for Immigrants

Foreign-trained workers, including skilled immigrants and Canadians with international training or education, make an important contribution to Canada’s labour market and economy. Many foreign-trained workers have difficulty paying for the tuition and other training costs associated with the foreign credential recognition process. Human Resources and Skills Development Canada and Citizenship and Immigration Canada will test ways to help foreign trained workers to cover these costs, with specific details to be announced shortly. This initiative will complement the already significant investments that the Government of Canada has made in recent years to support the labour market integration of new Canadians.

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