Chapter 3.1: Supporting Entrepreneurs, Innovators and World-Class Research

Highlights

Creating Value-Added Jobs Through Innovation

The Government is committed to a new approach to supporting innovation that focuses resources on private sector needs. Economic Action Plan 2012 proposes:

• $400 million to help increase private sector investments in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector.
• $100 million to the Business Development Bank of Canada to support its venture capital activities.
• $110 million per year to the National Research Council to double support to companies through the Industrial Research Assistance Program.
• $14 million over two years to double the Industrial Research and Development Internship program.
• $12 million per year to make the Business-Led Networks of Centres of Excellence program permanent.
• $105 million over two years to support forestry innovation and market development.
• $95 million over three years, starting in 2013–14, and $40 million per year thereafter to make the Canadian Innovation Commercialization Program permanent and to add a military procurement component.
• $67 million in 2012–13 as the National Research Council refocuses on business-led, industry-relevant research.
• Streamlining and improving the Scientific Research and Experimental Development tax incentive program.

Support for Research, Education and Training

The Government is committed to providing additional resources to support advanced research at universities and other leading research institutions. Economic Action Plan 2012 proposes:

• $37 million annually starting in 2012–13 to the granting councils to enhance their support for industry-academic research partnerships.
• $60 million for Genome Canada to launch a new applied research competition in the area of human health, and to sustain the Science and Technology Centres until 2014–15.
• $6.5 million over three years for a research project at McMaster University to evaluate team-based approaches to health care delivery.
• $17 million over two years to further advance the development of alternatives to existing isotope production technologies.
• $10 million over two years to the Canadian Institute for Advanced Research to link Canadians to global research networks.
• $500 million over five years, starting in 2014–15, to the Canada Foundation for Innovation to support advanced research infrastructure.
• $40 million over two years to support CANARIE’s operation of Canada’s ultra-high speed research network.
• $23 million over two years to Natural Resources Canada to enhance satellite data reception capacity.

Creating Value-Added Jobs Through Innovation

The Government is committed to a new approach to supporting innovation in Canada. Economic Action Plan 2012 announces $1.1 billion over five years to directly support research and development and $500 million for venture capital.

The global economy is changing. Competition for the brightest minds is intensifying. The pace of technological change is creating new opportunities while making older business practices obsolete. Canada’s long-term economic competitiveness in this emerging knowledge economy demands globally competitive businesses that innovate and create high-quality jobs.

The Government supports an innovative economy and the creation of high-quality jobs through investments in education and training, basic and applied research, and the translation of public research knowledge to the private sector. Since 2006, the Government has provided nearly $8 billion in new funding for initiatives to support science, technology and the growth of innovative firms. The Government is also sustaining a business environment that encourages innovation by supporting financing opportunities for businesses with the potential to become globally competitive, and creating a regulatory environment that promotes competition, business investment and economic growth.  

As demonstrated by Chart 3.1.1, supported by federal investments, Canada is a world leader in post-secondary research, outpacing other Group of Seven (G-7) countries on higher education investment. 

Canada’s level of investment in higher education outpaces other G-7 countries

Chart 3.1.1 R&D Investment in the Higher Education Sector

Despite strong policy fundamentals to support innovation in Canada, Canadian businesses do not take full advantage. Canada continues to lag behind peer countries in terms of overall innovation performance, including private sector investment in research and development (R&D), and the commercialization of research into products and processes that create high-value jobs and economic growth.   

As demonstrated by Chart 3.1.2, Canada’s private sector has historically lagged in terms of business investments in research relative to the size of our economy. This trend has persisted despite Canada’s strong post-secondary research performance in recent years. While the business sectors in the United States and across OECD countries are increasing their relative investments in research and development in order to improve their competitive positions, Canada’s business sector has seen a declining trend over the past decade. It is important that Canadian businesses begin to address this gap in order to drive the innovation that leads to success in a competitive global marketplace.

Business investment in R&D in Canada lags competitors

Chart 3.1.2 Business Investment in R&D as a Share of the Economy, 1981–2008

The Government’s science and technology strategy, Mobilizing Science and Technology to Canada’s Advantage, emphasizes the importance of ensuring that federally supported research contributes to the commercialization of new products, processes and services that create high-value jobs and economic growth. Guided by this strategy, the Government provides significant resources to support research, development and technology.

Consistent with this strategy, and to fully realize the value from our investments in advanced research, Budget 2010 announced that the Government would conduct a comprehensive review of federal support for research and development. The objective was to ensure that federal support is cost-effective and makes the maximum contribution to innovation and economic opportunities for business and Canadian workers.

This extensive review was conducted by an Expert Panel, led by Mr. Thomas Jenkins, Executive Chairman and Chief Strategy Officer of OpenText Corporation of Waterloo, Ontario. The Panel’s far-reaching consultations resulted in nearly 230 written submissions, supplemented by in-person group sessions held across the country and a detailed survey of more than 1,000 innovative businesses of all sizes representing a wide array of sectors and regions. The Panel also consulted innovation leaders in other countries to learn from their experiences.

In October 2011, the Expert Panel submitted a report to the Government, Innovation Canada: A Call to Action, with findings and recommendations on how to improve support for innovative businesses and help them grow into larger, globally competitive companies.  

Broadly, the Expert Panel found that:

• Canadian businesses find the Scientific Research and Experimental Development tax incentive program to be complex, with an approval process that can be unpredictable and costly.
• Relative to peer countries, Canada has an over-reliance on tax incentives in the mix of federal support for business research and development compared to direct expenditures that support innovative firms and public-private research collaborations.
• The numerous federal programs that promote business innovation can be difficult for companies to navigate, and may create inefficiencies.
• Canada lags behind peer countries in leveraging government procurement to promote private sector innovation.
• Unlike peer countries, Canada lacks an organization with the capacity to act as a central hub for business-driven research.
• Canada’s risk capital sector needs further development to effectively support the growth of innovative companies.
• Canada needs a stronger “whole-of-government” approach to innovation.

Informed by this advice, the Government is committed to a new approach to supporting innovation in Canada, by pursuing active business-led initiatives that focus resources on better meeting private sector needs. Economic Action Plan 2012 begins to deliver on this commitment, announcing $1.1 billion over five years for direct research and development support and making available $500 million for venture capital.

This new approach will promote business innovation through improved support for high-growth companies, research collaborations, procurement opportunities, applied research and risk financing. This will provide a solid foundation on which Canada’s globally competitive businesses can build by making the investments in innovation required to create high-value jobs and long-term economic growth. In particular, the Government will:

• Double the contribution budget of the Industrial Research Assistance Program to better support research and development by small and medium-sized companies.
• Support private and public research collaboration through internships for graduate students and funding for business-led research and development.
• Support innovation through procurement by connecting small and medium-sized companies with federal departments and agencies to build their capacity to compete in the marketplace.
• Refocus the National Research Council on demand-driven business-oriented research that will help Canadian businesses develop innovative products and services.
• Help high-growth firms access risk capital by committing significant funds to lever increased private sector investments in early-stage risk capital and to support the creation of large-scale venture capital funds led by the private sector.
• Streamline and improve the SR&ED tax incentive program by removing capital from the expenditure base, making it more cost-effective through design improvements and a measured rate reduction, and providing greater predictability through administrative improvements.

The Panel’s recommendations are wide-ranging and the Government will continue to study them carefully. In particular, the Government will explore options to consolidate the suite of programs that supports business innovation to make it easier for businesses to access government support and improve efficiency. In addition, the Government will help innovative companies have greater access to private sector risk capital. The Government will announce further actions in response to the Panel’s recommendations in the coming months and in Budget 2013.   

Helping High-Growth Firms Access Risk Capital

Economic Action Plan 2012 will make available $400 million to help increase private sector investments in early-stage risk capital and to support the creation of large-scale venture capital funds led by the private sector. Also, it confirms the previous commitment to make available an additional $100 million to the Business Development Bank of Canada.

Young knowledge-based firms often have difficulty in accessing capital from traditional financial institutions because they have few tangible assets beyond their ideas. Yet some of these firms have the potential to become future global market leaders. Facebook, Google and Research In Motion were all start-up companies financed by venture capital. Angel investors and venture capital funds play an important role in supporting the growth of these high-potential firms by providing much-needed capital as well as hands-on business advice.

The Canadian venture capital market has had mixed results in the last decade. Further, the venture capital market faces a broad range of challenges including a decline in fundraising, which is partially attributable to the market’s inability to consistently attract private investors, including large, well-funded institutional investors such as pension funds.   

The Government recognizes the crucial role played by private sector risk capital in driving business growth and innovation, and has taken important steps to strengthen its availability, including through the Business Development Bank of Canada and by removing impediments to foreign venture capital investments.

To help increase private sector investments in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector, Economic Action Plan 2012 proposes to make available $400 million for venture capital activities. This will increase the amount of funding available for growth-oriented innovative firms while focusing resources on those that are likeliest to become global leaders. In the coming months, the Government will consider how to structure its support in order to incent private sector investments and management of seed and large-scale venture capital funds.

In addition, Economic Action Plan 2012 confirms the previous commitment to make available an additional $100 million to support the venture capital activities of the Business Development Bank of Canada.

Increasing Direct Support for Business Innovation

Doubling the Industrial Research Assistance Program

Economic Action Plan 2012 proposes an additional $110 million per year starting in 2012–13 to double support for companies through the Industrial Research Assistance Program.

The National Research Council’s Industrial Research Assistance Program, which supports research and development projects by innovative small and medium-sized businesses, is a cornerstone of Canada’s innovation system and is regarded worldwide as one of the best programs of its kind. Economic Action Plan 2012 proposes an additional $110 million per year starting in 2012–13 to the National Research Council to double the Industrial Research Assistance Program. This will allow the National Research Council to support additional small and medium-sized businesses that create high-value jobs, and to expand the services provided to businesses through the program’s Industrial Technology Advisors. The National Research Council will also create a concierge service that will provide information and assistance to small and medium-sized businesses to help them make effective use of federal innovation programs.

Supporting Innovative Businesses in Western Canada

Economic Action Plan 2012 announces the upcoming launch of the Western Innovation Program.

Western Economic Diversification Canada works to improve the long-term economic competitiveness of the West and the quality of life of its citizens by supporting a wide range of initiatives targeting inter-related project activities—innovations, business development and community economic development. The agency will soon be launching the Western Innovation Program. The new program will provide financial support to innovative small and medium-sized enterprises in Western Canada, and is consistent with those offered in other regions such as the Business and Regional Growth program administered by Canada Economic Development for Quebec Regions; the Business Development Program administered by the Atlantic Canada Opportunities Agency; and the Southern Ontario Development Program administered by the Federal Economic Development Agency for Southern Ontario.

Supporting Private and Public Sector Research Collaboration

Through linkages between firms and post-secondary institutions, knowledge generated by federal support for post-secondary research is harnessed to address market needs. Collaborative research between post-secondary researchers and private sector partners promotes awareness by companies of the capabilities of post-secondary institutions and researchers, facilitates the transfer of expertise and technology, and encourages the development of long-term research capacity within the private sector. Economic Action Plan 2012 proposes several measures to enhance support for high-potential research collaborations between businesses and researchers. 

Integrating High-Quality Researchers Into the Labour Market

Economic Action Plan 2012 proposes $14 million over two years to double the Industrial Research and Development Internship program.

The Industrial Research and Development Internship program currently helps 1,000 graduate students undertake hands-on research in innovative Canadian firms each year. This initiative provides host firms with access to cutting-edge research and skills, while providing students with valuable applied research experience in a private sector setting. To double the resources of the Industrial Research and Development Internship program, Economic Action Plan 2012 proposes $14 million over two years. This new funding will be administered by Mitacs, an advanced research organization with a proven track record of helping businesses solve problems through access to graduate students.

Strengthening Knowledge Transfer and Commercialization

Economic Action Plan 2012 proposes $12 million per year to make the Business-Led Networks of Centres of Excellence program permanent.

The Business-Led Networks of Centres of Excellence program supports research on business priorities by teams of private sector researchers and academics. The program has proven to be an effective way to link innovative businesses to Canada’s world-class researchers, helping to create and sustain knowledge-based jobs. To build on the success of these collaborations, Economic Action Plan 2012 proposes $24 million over two years and $12 million per year thereafter to make the Business-Led Networks of Centres of Excellence program permanent.

Forestry Innovation and Market Development Support

Economic Action Plan 2012 proposes $105 million over two years to support the continued transformation of the forestry sector.

In 2011, the forestry sector directly supported 233,000 jobs in over 200 communities across the country and accounted for 1.9 per cent of Canadian gross domestic product. The forestry sector has faced a number of economic challenges over the past decade. In response to these challenges, the forestry industry has taken important steps to become more productive and transition to higher-value activities.

The Government has provided significant support to the forestry sector to facilitate its transformation through a suite of innovation and market development programs. To maximize the effectiveness of federal support, the Government will be refocusing its current programming from five to two initiatives:

• The Expanding Market Opportunities Program will combine the Canada Wood Export and the North American Wood First programs and incorporate the activities previously delivered by the Leadership for Environmental Advantage in Forestry (the LEAF Program).
• The Forest Innovation Program will combine support for the emergence of transformative technologies, including those developed by FPInnovations and the Canadian Wood Fibre Centre, through the previousPromoting Forest Innovation and Investment program, and the technology transfer activities to small and medium-sized enterprises that were previously delivered through the Value to Wood program.

To support the continued transformation of the forestry sector, Economic Action Plan 2012 proposes $105 million over two years. The Government will continue to engage with the forestry industry to identify opportunities for the private sector to increase its investment in innovation and develop new markets for Canadian forestry products.

Supporting Innovation Through Procurement

Economic Action Plan 2012 proposes an additional $95 million over three years, starting in 2013–14, and $40 million per year thereafter to make the Canadian Innovation Commercialization Program permanent and to add a military procurement component. 

The Canadian Innovation Commercialization Program, which was launched in 2010 and has already shown encouraging results, connects small and medium-sized enterprises with federal departments and agencies that have a need for innovative products and services. By selling to the federal government, businesses can demonstrate the value of their products and services, increase the scale of their operations, and generate future sales to non-federal customers. To build on the early success of this program, Economic Action Plan 2012 proposes an additional $95 million over three years, starting in 2013–14, and $40 million per year thereafter to make the Canadian Innovation Commercialization Program permanent. The program will include an added military procurement component.

Refocusing the National Research Council

Economic Action Plan 2012 proposes $67 million in 2012–13 to support the National Research Council in refocusing on business-led, industry-relevant research.

The National Research Council was created in 1916 to support basic research and the development of commercial innovations. The organization has made an important contribution to the Canadian economy, supporting the development of innovations, such as the pacemaker and computer animation technology, that have created high-value jobs. To continue to play this important role in Canada’s innovation system, the National Research Council must adapt to business research needs, and concentrate on active business-driven, industry-relevant applied research. To support this new direction, Economic Action Plan 2012 proposes $67 million to the National Research Council in 2012–13.

In consultation with businesses and university and college stakeholders, the Government will consider ways to better focus the National Research Council on demand-driven research, consistent with the recommendations of the Expert Panel.

Scientific Research and Experimental Development Tax Incentive Program

The Scientific Research and Experimental Development (SR&ED) tax incentive program is one of the most generous systems in the industrialized world for research and development (R&D). It is the single largest federal program supporting business R&D in Canada, providing more than $3.6 billion in tax assistance in 2011.

Consistent with the recommendations of the Expert Panel, Economic Action Plan 2012 is proposing a number of measures to streamline and improve the SR&ED tax incentive program. The savings generated by these actions will be invested in direct support programs that will reinforce business innovation in Canada.

Simplifying the Tax Credit Base

Economic Action Plan 2012 proposes to simplify the SR&ED program by removing capital from the expenditure base.

The rules regarding the eligibility of capital expenditures are the most complex for businesses to comply with. In order to simplify the program, Economic Action Plan 2012 proposes to narrow the base of eligible expenditures by removing capital. The other expenditure elements will remain eligible, including salary and wages, materials, overhead expenses and contract payments. This proposed change will affect capital expenditures incurred in 2014 and subsequent years.

Increasing Cost-Effectiveness

Economic Action Plan 2012 proposes to increase the cost-effectiveness of the SR&ED program through two design improvements and a measured reduction in the general tax credit rate.

In order to increase cost-effectiveness, Economic Action Plan 2012 proposes two design improvements that will better align the tax credits received with actual business expenditures on SR&ED projects, as well as a measured reduction in the general tax credit rate.

The two design improvements will affect the calculation of overhead expenditures and of arm’s length contract payments:

• To limit instances where the rules result in tax credits being provided for overhead costs that exceed the actual costs incurred, Economic Action Plan 2012 proposes to gradually reduce the “prescribed proxy amount” that is used to compute overhead expenditures under the so-called “proxy method,” from 65 per cent to 55 per cent of direct labour costs. The 55-per-cent rate will be fully phased in as of January 1, 2014.
• To remove the profit element from arm’s length contract payments, Economic Action Plan 2012 proposes to allow only 80 per cent of these contract payments to be used for the purposes of calculating the SR&ED tax credits. This change is consistent with the current tax treatment of non-arm’s length contracts, and will target the tax credits to SR&ED expenditures incurred, and not on profit margins. It will be effective as of January 1, 2013.

Economic Action Plan 2012 also proposes a reduction in the general SR&ED investment tax credit rate. The recent corporate income tax rate reductions (from 22.12 per cent in 2007 to 15 per cent in 2012) have effectively increased the relative generosity of the SR&ED tax incentive program and resulted in growing pools of unused investment tax credits. Effective January 1, 2014, the general SR&ED investment tax credit rate will be reduced from 20 per cent to 15 per cent.

Enhancing Predictability

Economic Action Plan 2012 announces actions by the Canada Revenue Agency to improve the predictability of the SR&ED tax incentive program. The Government will invest $4 million in 2012–13 and $2 million in 2013–14 to implement changes to the administration of the program.

Economic Action Plan 2012 announces that the Canada Revenue Agency (CRA) will conduct a pilot project to determine the feasibility of a formal pre-approval process. The CRA will also:

• Enhance the existing online self-assessment eligibility tool.
• Work collaboratively with industry representatives to address emerging issues.
• Make more frequent and effective use of “tax alerts.”
• Improve the Notice of Objection process to allow for a second review of scientific eligibility determinations.

Contingency Fees

The Government announces a study of contingency fees charged by tax preparers.

Small and medium-sized businesses sometimes rely on tax preparers charging on a contingency-fee basis to prepare their SR&ED claims. These fees may be as high as 30 per cent of SR&ED benefits, or even more. The Government is concerned that high contingency fees charged by tax preparers are diminishing the benefits of the SR&ED tax incentive program to Canadian businesses and the economy. In the coming year, the Government will conduct a study, including consultations with taxpayers, to better understand why firms choose to hire consultants on a contingency-fee basis and determine whether action is required.

Support for Research, Education and Training

Supporting Advanced Research

Since 2006, the Government has provided nearly $8 billion in new funding for initiatives to support science, technology and the growth of innovative firms. This includes $5 billion in support for science and technology activities performed by non-business enterprises. This funding has helped to make Canada a world leader in post-secondary education research and to create the knowledge and highly skilled workforce that is required for a more prosperous economy. This support has contributed to a strong foundation for Canada’s innovation system, ensuring that Canadian researchers can continue to generate groundbreaking ideas and businesses have access to the knowledge, ideas, people and resources needed to bring this knowledge to market and create high-quality jobs.

Economic Action Plan 2012 proposes additional resources to support advanced research at universities and other leading research institutions.

Promoting Post-Secondary and Private Sector Research Collaborations

Economic Action Plan 2012 proposes $37 million annually to enhance the granting councils’ support for industry-academic research partnership initiatives.

The federal granting councils support outstanding research and advanced training at post-secondary institutes and research hospitals. The granting councils have been increasing their focus on partnerships between post-secondary researchers and companies to target research to business needs and transfer knowledge into economic advantage.

The granting councils will be pursuing operational efficiencies and reallocation of funding from lower-priority programs to generate savings. The Government will fully reinvest 2012–13 savings in priority areas of the granting councils, particularly in industry-academic partnerships.

Specifically, Economic Action Plan 2012 proposes $37 million annually starting in 2012–13 to the granting councils to enhance their support for industry-academic research partnership initiatives. The new resources for the councils will be allocated as follows:

• $15 million per year to the Canadian Institutes of Health Research for its Strategy for Patient-Oriented Research.
• $15 million per year to the Natural Sciences and Engineering Research Council for its Strategy for Partnerships and Innovation.
• $7 million per year to the Social Sciences and Humanities Research Council for its industry-academic partnership initiatives.

Investing in Genomics Research

Economic Action Plan 2012 proposes an additional $60 million for 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 helps unlock new possibilities in important areas such as health, fisheries, forestry, agriculture and the environment.

To date, the Government has provided $980 million to Genome Canada, which along with funding from other partners will result in close to $2 billion in genomics research in Canada. To help achieve important future genomics research breakthroughs, Economic Action Plan 2012 proposes an additional $60 million for Genome Canada to launch a new applied research competition in the area of human health, and to sustain the Science and Technology Centres until 2014–15.

Investing in Mental Health Research

Economic Action Plan 2012 proposes $5.2 million in 2012–13 to establish and integrate a network of mental health-related professionals. Research will be centered on treating depression, with a focus on suicide prevention and post-traumatic stress disorder.

Mental health-related illnesses impact the lives of many Canadians, at a great social and economic cost. The advancement of research in this area, particularly research aimed at developing more effective diagnostic and treatment tools, is critical to improving the lives of these individuals. Economic Action Plan 2012 proposes $5.2 million in 2012–13 to support the Canadian Depression Research and Intervention Network. The Mood Disorders Society of Canada, in conjunction with the Mental Health Commission of Canada, will lead the development of the Network, connecting over 80 of Canada’s brightest depression researchers from across the country. Particular focus will be on suicide prevention and identifying and treating post-traumatic stress disorder. Funding provided in the budget will serve as a catalyst for private and public sector investment.

Promoting Cost-Effective Health Care

Economic Action Plan 2012 proposes $6.5 million over three years for a health research project at McMaster University.

Canadians rely on an effective, efficient and accessible public health care system. The Government is working with partners to further improve the delivery of health care services. Economic Action Plan 2012 proposes $6.5 million over three years for a research project at McMaster University. The project will evaluate ways to achieve better health outcomes for patients while also making the health care system more cost-effective, through greater implementation of medical teams. Federal support will be augmented by contributions from other partners.

Advancing Knowledge and Treatment of Spinal Cord Injury

Economic Action Plan 2012 announces the Government’s commitment to support spinal cord injury research at the Rick Hansen Institute.  

May 2012 marks the 25^th anniversary of the conclusion of the Rick Hansen Man in Motion World Tour, which saw him visit more than 30 countries and raise over $26 million for spinal cord research. To help improve the lives of people living with spinal cord injuries, the Government will continue to partner with the Rick Hansen Institute to support its work to achieve breakthroughs in spinal cord injury research and care.

Diversifying Canada’s Medical Isotope Supply

Economic Action Plan 2012 proposes $17 million over two years to further develop alternatives to existing isotope production technologies.

Medical isotopes are used in a variety of treatments and diagnostic procedures that help save lives. In Budget 2010, the Government provided $35 million over two years to Natural Resources Canada to support research and development towards new technologies for the production of medical isotopes to help replace reactor-based isotope supplies. Very promising results have been demonstrated to date, but more work is required to bring these new technologies to commercial scale. To further advance the development of alternatives to existing isotope production technologies and help secure the supply of medical isotopes for Canadians, Economic Action Plan 2012 proposes an additional $17 million over two years to Natural Resources Canada.

Supporting Leading-Edge Researchers

Economic Action Plan 2012 proposes $10 million over two years to support linkages between Canadian researchers and leading international minds.

The Canadian Institute for Advanced Research (CIFAR) is a private, non-profit organization linking Canadian researchers with the top minds from around the world. Its main priority is to establish and maintain global networks of top researchers and students, enabling Canadians to participate in and lead groundbreaking work on the international stage.To enhance the organization’s activities and allow it to continue to link Canadian researchers to the world, Economic Action Plan 2012 proposes $10 million over two years to CIFAR.

Investing in Leading-Edge Research Infrastructure

Canada Foundation for Innovation

Economic Action Plan 2012 proposes $500 million over five years to support advanced research infrastructure.

The Canada Foundation for Innovation is a not-for-profit corporation that supports the modernization of research infrastructure at Canadian universities, colleges, research hospitals and other not-for-profit research institutions across Canada. Through the Foundation, the federal government invests with other partners in state-of-the-art facilities and equipment that play a crucial role in attracting and retaining the world’s top minds, training the next generation of researchers and driving cutting-edge discoveries.

The federal government has allocated $5 billion to the Canada Foundation for Innovation to date, most recently providing $750 million through Budget 2009. The Government will sustain its investments in advanced research infrastructure. To support the Foundation’s core activities, Economic Action Plan 2012 proposes $500 million over five years, starting in 2014–15, to the Canada Foundation for Innovation. The funding will support new competitions, including for the College-Industry Innovation Fund, with funding awarded in 2014–15.

Supporting Canada’s Ultra-High Speed Research Network

Economic Action Plan 2012 proposes $40 million over two years to support the operations of Canada’s ultra-high speed research network.

CANARIE is a not-for-profit organization that operates Canada’s only ultra-high speed national research and education network, providing vital infrastructure for world-leading research and innovation in Canada. To sustain the evolution of the network and ensure that it continues to encourage world-class research collaborations across the country, Economic Action Plan 2012 proposes $40 million over two years to CANARIE to support the operations of Canada’s ultra-high speed research network.

The Canadian High Arctic Research Station

Economic Action Plan 2012 announces the Government’s ongoing commitment to establishing the Canadian High Arctic Research Station.

Canada’s Economic Action Plan laid the groundwork to establish a world-class research station in the North. As announced by the Prime Minister in August 2010, the station will be located in Cambridge Bay. Once established, the station will provide a year-round presence in the region and anchor the network of research infrastructure across Canada’s North, making a significant contribution towards the Government’s Northern Strategy. The Government will be announcing next steps in the establishment of the Canadian High Arctic Research Station in the coming months.

Extending Canada’s Participation in the International Space Station Mission

Economic Action Plan 2012 confirms that Canada will continue its participation in the International Space Station mission to 2020.

Canada’s participation in international space projects demonstrates its position as a sophisticated research and innovation leader, with a global advantage in several niche technology areas, including robotics. Beginning with the first Canadarm, Canada has played a unique and privileged role with respect to the operation of the International Space Station, alongside the United States, the European Union, Russia and Japan. Using advanced technology, Canadian astronauts such as Julie Payette and Chris Hadfield have helped conduct world-class research on the International Space Station in fields such as human space flight, physiology, physical science and technology development. To sustain Canada’s leadership in space research, the Government confirms that Canada will continue its participation in the International Space Station mission to 2020. The Canadian Space Agency will engage with NASA to define the terms of this continued participation.

To explore how best to address key issues facing the aerospace and space sectors, such as innovation, market access and development, skills development, procurement, and supplier development, the Government is proceeding with a review of federal aerospace and space programs and policies. The Honourable David L. Emerson will head the review and will report his findings to the Minister of Industry in late 2012.

Revitalizing Natural Resources Canada’s Satellite Station Facilities

Economic Action Plan 2012 proposes $23million over two years for new satellite data reception facilities and the development of a data management system.

With the second largest landmass on earth and the longest coastline in the world, Canada relies on satellite technology to monitor its land and borders and deliver critical activities, including emergency services (e.g. flood mapping) and active monitoring of Canadian waters for the detection of oil spills. Canada requires up-to-date reception capacity to reap the full benefits from its observation satellites, including RADARSAT, in support of sovereignty, public safety and economic competitiveness objectives. To support the observation of Canada’s vast geography, Economic Action Plan 2012 proposes $23 million over two years to Natural Resources Canada for new satellite data reception facilities and the development of a data management system.

Supporting Atomic Energy of Canada Limited

Economic Action Plan 2012 proposes $107 million over two years to ensure a secure supply of medical isotopes and maintain safe and reliable operations at Atomic Energy of Canada Limited’s Chalk River Laboratories.

Atomic Energy of Canada Limited (AECL) is a federal Crown corporation that specializes in a range of nuclear products and services. The Government has taken an important step in positioning Canada’s nuclear industry for future success with the sale of AECL’s CANDU Reactor Division last October. The second phase of the restructuring of AECL—the restructuring of its nuclear laboratories—is now underway. To ensure a secure supply of medical isotopes and maintain safe and reliable operations at the Chalk River Laboratories, Economic Action Plan 2012 proposes $107 million over two years for AECL’s laboratory operations.

International Education Strategy

Education, innovation and knowledge are key drivers in a world economy. Attracting more international students and researchers to Canada will create jobs and economic growth, expand our people-to-people ties in priority markets, showcase Canadian research excellence abroad, help produce a more skilled workforce and foster closer ties between Canadian and international educational institutions.

Recognizing the need for a comprehensive plan, Budget 2011 announced Canada’s International Education Strategy. An expert Advisory Panel was named in October 2011 and is chaired by Dr. Amit Chakma, President and Vice-Chancellor, University of Western Ontario. The Panel has completed its engagement with Canadian stakeholders and partners and will soon submit a report with recommendations that will aim to deepen educational links between Canada and international institutions and contribute to Canada’s long-term prosperity.