LAUNCHING CANADA INTO THE THIRD MILLENNIUM
A brief submitted to the House of Commons Standing Committee on Finance
by
the Canadian Consortium for Research
September 1999
THE CANADIAN CONSORTIUM FOR RESEARCH /
LE CONSORTIUM CANADIEN POUR LA RECHERCHE
2675 Promenade Queensview Drive, Ottawa, ON K2B 8K2
Tel: (613) 820-2270 Fax: (613) 822-7740
Table of Contents
1.0 Section I: Introduction to the Canadian Consortium for Research
1.1 Resume
1.2 Introduction
2.0 Section II: The Issues
2.1 Core Funding of Post Secondary Education
2.2 Granting Councils
2.3 Government Science and Technology
3. 0 Section III: Themes
3.1 Social Infrastructure
3.2 New Economy
3.3 Productivity
3.4 Taxes
4.0 Section IV: Summary of Recommendations
[ Letter to Mr. Maurizio Bevilacqua, M.P.
Chair, Standing Committee on Finance ]
1. The Canadian Consortium for Research (CCR)
The Canadian Consortium for Research (CCR) was established in 1976. It consists of the 22 organizations listed below that represent researchers in all disciplines across Canada. While the majority of these researchers are based in universities, the constituent organizations have numerous members in government laboratories and in private sector research centres. With an estimated 50,000 researchers and 400,000 students represented in these member groups, the CCR is the largest organization in Canada whose primary concerns are the funding of research in all sectors and support for post-secondary education.
All activities of the Consortium are conducted with volunteers from the constituent member societies and organizations. A six-member steering committee provides the planning and leadership for the CCR and reports to the Consortium at regularly scheduled monthly meetings of the member representatives.
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Member Organizations:
Association canadienne-française pour l'avancement des sciences
Canadian Astronomical Society
Canadian Association for Graduate Studies
Canadian Association for Neuroscience
Canadian Association of Physicists
Canadian Association of University Research Administrators
Canadian Association of University Schools of Nursing
Canadian Association of University Teachers
Canadian Bureau for International Education
Canadian Geoscience Council
Canadian Council of University Biology Chairmen
Canadian Federation of Biological Societies
Canadian Federation of Students
Canadian Mathematical Society
Canadian Organization of Medical Physicists
Canadian Psychological Association
Canadian Society for the Study of Higher Education
The Chemical Institute of Canada
Council of Canadian University Chemistry Chairmen
Council of Canadian Departments of Psychology
The Humanities and Social Science Federation of Canada
Statistical Society of Canada
1.1 RESUME
The central thrust of this brief is to present a case for increased core funding of Canada's post secondary education system and for improved research funding, via the granting councils and, as appropriate, within the government's internal science and technology sector. Specific recommendations appear within the text of the brief and at its conclusion.
1.2 INTRODUCTION
Canada is a partner in a rapidly changing global economy. Innovation, to which Canada has contributed significantly, has been key to facilitating this change. The change itself, however, places ever greater demands upon Canada to maintain and enhance its knowledge and technology capabilities in all areas. We helped create the current climate and, to retain or improve our place in the world, we must continuously expand the knowledge and skills required to keep us creative and competitive.
Specifically, we must produce adequate numbers of highly educated and trained people and also ensure that an effective portion of them are able to contribute to Canadian innovation through research, development and commercialization activities. Positive responses to this challenge will lead to economic health, social cohesion and an improved standard of living. Failure to respond vigorously, on the other hand, will lead to a gradual decay relative to others in the global economy. While this has always been so, it is now becoming increasingly important. A successful future for Canada lies increasingly in its ability to nurture creative people, a caring society and high value added industries for which the above activities are essential.
Positive responses by the government to this challenge have occurred in recent budgets using financial resources then available. Among the initiatives announced in the 1997 budget were the creation of the Canada Foundation for Innovation (CFI) and the permanent continuation of the Networks of Centres of Excellence (NCE) program and the National Research Council's (NRC) Industrial Research Assistance Program. The 1998 budget restored the funding of the granting councils to their 1994-95 levels. Further investments in the CFI and increased funding to the Natural Sciences and Engineering Research Council (NSERC), the Social Sciences and Humanities Research Council (SSHRC), NRC and the NCE program were announced in the 1999 budget. The latter budget also gave impetus to the continued development of the Canadian Institutes of Health Research (CIHR) proposal.
It must be realized, however, that these investments were made in the wake of previous deep cuts in transfers to the provinces for post secondary education (PSE) and in the funding of the granting councils and NRC as part of the effort to balance the national budget. These cuts were applied to a research community whose overall funding was never strong by international standards. Canada, for example, ranks low relative to other nations in terms of the percentage of the GDP expended on research and development (GERD). Also Canada was not alone during the past three years in increasing support for research. The needs of Canada's research community must be seen in this international perspective. If we do less than other countries, our economy can be expected to reflect it eventually.
This is the context in which the Finance Committee has requested discussion structured around several themes including social infrastructure, the new economy and productivity. These thematic issues are central to the health of the Canadian economy and to the enhancement of our social cohesion. These questions are also raised at a time when the government, having resolved the budget deficit problem, has more resources with which to make necessary and desirable investments in its people and their economy. The Canadian Consortium for Research (CCR) is pleased to present recommendations in respect of each of these themes.
The organization of this brief is as follows. First the issues which the CCR believes must be addressed are presented and discussed in turn. Specific recommendations are made. Next the relationship of these issues to the Finance Committee's themes is established. Here the relevance of the recommendations to the themes is also established. Finally a summary of the recommendations is presented.
2. THE ISSUES
Core Funding of Post Secondary Education
In recent years core funding of Canada's post secondary education institutions has declined significantly. Universities, for instance, experienced a 23% real loss of operating funds over a recent five year period. In contrast, government funding of higher education in the US rose. Elsewhere PSE systems have also experienced greater investments.
One consequence of diminished core funding in Canada has been a dramatic increase in university tuition fees. Student debt has also increased. Accessibility to higher education has been reduced.
Increasingly the assets of our economy walk out the door to go home at the end of the day. Increasingly, therefore, we must ensure adequate supplies of these assets - the highly trained and educated graduates of our post secondary institutions. Diminished accessibility to higher education is thus occurring when PSE has never been more essential for our future.
A crucial segment of university contributions to our innovation system are graduate students. The debt often accumulated during both undergraduate and graduate studies is a serious disincentive for many to attend graduate school. Without graduate students, Canada's research endeavor will suffer.
Another consequence of inadequate core funding has been a decay of university infrastructure. Faculty numbers have been reduced, library resources have diminished, maintenance has been deferred and technical support for research has decreased. This infrastructure includes that which is necessary for university research. The capacity of our universities to generate ideas, to innovate and to produce the highly trained individuals required to drive the "new economy" is being diminished. The net result in the longer term will be to weaken the PSE contribution to the Canadian innovation system.
The CCR therefore strongly urges the creation of strategic investments to the PSE sector via federal transfers to the provinces to strengthen post secondary education, thereby enhancing innovation and equality of opportunity.
The report Public Investments in University Research: Reaping the Benefits was recently submitted to the government by the Prime Minister's Advisory Committee on Science and Technology (ACST). Attention should be given to the recommendation of this report that the federal and provincial governments should "resolve, on an urgent basis, situations where universities have difficulties conducting research when federal funding is provided, but when limited provincial support is available for the associated indirect costs." Action on this recommendation will alleviate, to some degree, the pressing core funding problem where it impacts research.
2.2 Granting Councils
The granting councils are the engine of university-based research and innovation. The recent granting council budget increases have been positive and important first steps toward reinvigorating the research community. However, it is the ability of Canadians to discover and innovate relative to that of other nations which is one of the significant measures of Canada's ultimate potential to both cooperate and compete effectively in the future. Other countries have increased their support for research, sometimes substantially, or have committed themselves to do so or are seriously considering doing so. We are in a sort of Alice in Wonderland race to keep up.
How do we compare in this respect? As noted in our brief to you last year, average grant sizes in the United States have been about 3 times larger than those of our granting councils. The need for increased budgets of our granting councils was noted by the ACST report on commercialization of university research referred to above. It urged "building further on the measures taken by the Government of Canada in the last three federal budgets to increase research funding."
The under-funding is greatest in the social sciences and humanities. While they represent 54 per cent of students and faculty in Canadian universities, these disciplines receive only 15 per cent of government expenditures on research. As a result, a much greater fraction of its researchers and graduate students have no hope of obtaining granting council funding. This greatly limits the ability of these researchers to contribute to the improvement of our society.
For example, while Statistics Canada has earned the reputation of being the "best statistical office in the world" according to the Economist, much of the data it collects is wasted because too few Canadian researchers have the expertise and access required to analyze it. At the same time, there is a pressing need for current social statistics to sustain the increasing demand for evidence based decision making.
SSHRC and Statistics Canada therefore have proposed to launch a "Canadian Initiative on Social Statistics "(CISS)" to provide research support and training for young researchers; facilitate access to Statistics Canada's detailed micro-data; and maximize the research and public policy interface". Implementation is estimated to require $20 million annually.
The new economy requires broad cultural knowledge and advanced critical thinking skills at least as much as technical training and access to information. Companies and employees must operate in an international and multi-cultural market-place where language skills and cultural understanding are at a premium. Investors, managers and workers alike must rapidly analyze and interpret large amounts of information. All research in the humanities and social sciences develop these skills.
Dr. Robert Allen, a UBC economist, has clearly shown that humanities and social sciences graduates find good jobs in the new economy. In fact, they are most likely to find professional or managerial employment and more likely to advance farther professionally than people with technical training only.
Research in the humanities and social sciences also contributes directly to Canada's social infrastructure. The SSHRC recently launched a program ("Community-University Research Alliances (CURA)") bringing together small businesses, community organizations and university institutions around issues of common concern. Originally, SSHRC planned to fund up to 16 CURA, but it has been overwhelmed by 176 applications calling for $109 million in financing. Despite committing additional resources, it has only been able to fund 24. Adequate funding of this program would satisfy a clearly defined need and also immeasurably expand our social infrastructure.
The CCR recommends that the chronic under-funding of social sciences and humanities research be corrected by a doubling of the SSHRC budget to $240 million over 3 years.
Canadian research has greatly profited from the creation of the CFI and the research community has responded in vigorous competition for its funds. The demand has been well above predicted levels which attests to the wisdom of its establishment. The resulting infrastructure will greatly improve Canada's research and innovation capacity. At the same time, it has placed, as predicted, an increasing strain on granting council resources. The CFI is creating the intended reinvigoration of research activity but can the granting councils provide the necessary on-going support to sustain this reinvigoration? We are also observing pressure on universities to increase enrolment in areas of market perceived human resource shortages, such as communications and software technologies. Responses to this pressure will require new faculty and thus increased demands upon the NSERC budget. The granting councils are already having to turn away good proposals. This increased demand will fall upon primarily NSERC. How will it be able to respond?
The CCR recommends an increase in the NSERC budget of $80 million to cover these new needs. The NSERC base budget should be further increased over the next few years to bring funding in Canada more in line with that elsewhere.
The important restructuring of health research in Canada continues. A remarkable synergy of interests has coalesced around the proposed CIHR. It is imperative that the government maintain its solid commitment to this important project.
The CCR recommends that the government ensure stable and adequate funding for the CIHR over the next several years with a goal of reaching 1% of health expenditures as recommended by the National Forum on Health.
2.3 Government Science and Technology
The contribution to the Canadian innovation system by science and technology research in the government's own departments and agencies was also diminished as part of the campaign to eliminate the deficit. These contributions include, for example, research to inform policy development which, if done well, can lead to more effective policy, geological exploration of Canada which is used by the private sector, and the creation of technology for transfer to the private sector. These activities all strengthen the Canadian innovation system. Program review and other cuts have therefore diminished our innovation capacity.
The Council of Science and Technology Advisors (CSTA), which reports to the Cabinet Committee on Economic Union, is "examining the roles of the federal government in performing science and technology, and its ability to fulfill these roles". The CCR hopes this examination will assess and prioritize the effective roles the departments and agencies can undertake, the adequacy of the available expertise of staff to address the priority challenges, and the efficacy of the current organization structure to fulfill these roles. The CCR also hopes that the study will recommend a set of goals for government science and technology along with a development plan for their implementation. If the CSTA is not to undertake all of these tasks, some other body should be struck to do so. The government should determine its internal role in the innovation system and resolve to provide adequate resources for the fulfillment of this role. It should also ensure that the resulting program meets the broad approval of the science and innovation community.
The above will take some time to implement. In the meantime, the pressures which arose from previous cuts continue to be felt. It is known, for instance, that the NRC has expressed the need for a budget increase in order to effectively contribute under its mandate to the innovation system. No doubt other needs have also been expressed. These requirements should not be set aside until the plan described above is in place. Significant current needs must be addressed.
In addition, funding of national facilities through government departments or agencies occurs from time-to-time. These facilities are of critical importance to the Canadian science and technology communities accross many disciplines and sectors. By opening their use to foreign scientists on the basis of merit, Canadians obtain the right to use similar facilities elsewhere on the same basis. This arrangement is of immense benefit to Canada and contributes greatly to Canada's stature in the international science and technology world. Such proposals, where pressing, should also not be set aside until the plan described above is in place.
3.0 THEMES
3.1 Social Infrastructure
A strong country is synonymous with a strong social infrastructure. To quote an old television commercial, "People are our most important product". Strengthening the research capacity of the country ensures our competitiveness, productivity and the growth of wealth. It impacts directly on present and future employment. The thinking, communicating and creative skills obtained in PSE institutions are essential to strengthening social cohesion and economic activity. A liberal democracy relies on these factors to survive and to thrive.
With respect to our recommendations, improved core funding of our post secondary education institutions, finding a way to address the indirect costs of research and improving the ability of researchers to financially support graduate students via increased granting council support will all contribute fundamentally and positively to Canada's social infrastructure.
3.2 New Economy
The new economy is dependent on creativity, research and innovation. To ensure that Canada continues to play a leading role in the new knowledge-based economy, we need to continually strengthen our education and research systems. These are essential cornerstones of the new economy.
It is clear that all of our recommendations above are relevant here. Our education and research systems are inextricably linked to the health and vibrancy of our society and economy. Recent government investments have been important. Nevertheless, the current level of government support for PSE, the granting councils and government research needs further investment if the Canadian economy and society is to optimally thrive.
3.3 Productivity
Productivity is increased by new methods of production, by new and more cost effective ways (products) to satisfy a need and via the improved understanding of the essential human factors involved in all aspects of the innovation cycle. These depend on the continual creation of new knowledge, of the physical world, of the biological world and of how people think, feel and behave. It also depends on the effective dissemination of this new knowledge, which is the task of our PSE and research sectors.
Recommendations made in this document, such as increasing core funding for PSE and the granting councils and a re-examination of the role of government science and technology, with increased funding where necessary, are critical to the health and vigor of our society and its innovation system.
3.4 Taxes
The member organizations of the CCR are not composed of tax experts. It is therefore difficult to comment authoritatively on tax proposals. The CCR, however, is aware that recent opinion polls show Canadians to be interested in tax cuts, but not at the expense health and education systems. The latter rank considerably higher in importance in Canadian minds than the former.
4.0 SUMMARY OF RECOMMENDATIONS
As globalization increases there is a greater need for societies to ensure that their people have the requisite knowledge and resources to maintain and improve social cohesion, general well-being and the international competitiveness of their economies. Without these inputs, economies will not be adequately innovative and societies will founder.
Other countries have understood this requirement and have acted to strengthen their support of PSE, research and technology. The government's recent investments in this area, which followed a period of decl
ining investments, must be seen in comparison with what other countries are doing. They are moving forward and so must we. We therefore urge the government to act upon the following recommendations.
The CCR therefore strongly urges the creation of strategic investments to the PSE sector via federal transfers to the provinces to strengthen post secondary education, thereby enhancing innovation and equality of opportunity.
Attention should be given to the recent recommendation to the government that the federal and provincial governments should "resolve, on an urgent basis, situations where universities have difficulties conducting research when federal funding is provided, but when limited provincial support is available for the associated indirect costs."
The CCR recommends that the chronic under-funding of social sciences and humanities research be corrected by a doubling of the SSHRC budget to $240 million over 3 years.
The CCR recommends an increase in the NSERC budget of $80 million to cover these new needs arising from the CFI and new university programs. The NSERC base budget should be further increased over the next few years to bring funding in Canada more in line with that elsewhere.
The CCR recommends that the government ensure stable and adequate funding for the CIHR over the next several years with a goal of reaching 1% of health expenditures as recommended by the National Forum on Health.
The government should determine its internal role in the innovation system and resolve to provide adequate resources for the fulfillment of this role. It should also ensure that the resulting program meets the broad approval of the science and innovation community. Notwithstanding this recommendation, the government should proceed with significant internal funding needs.
September 17, 1999
Mr. Maurizio Bevilacqua, M.P.
Chair, Standing Committee on Finance
Room 540-N Centre Block
House of Commons
Ottawa, Ontario
K1A 0A6
Dear Mr. Bevilacqua:
We are writing to you and your colleagues on the House of Commons Standing Committee on Finance to encourage the Committee to recommend that the federal government increase its transfer in support of postsecondary education (PSE) by $2 billion in each of the next two years, and to make a long-term commitment to staged increases in transfers for PSE in subsequent years.
Canadians have historically recognized the importance of a vibrant postsecondary education sector to increases in their overall standard of living and quality of life. As the UNESCO World Conference on Higher Education concluded in 1998, "higher learning and research now act as essential components of cultural, socio-economic and environmentally sustainable development of individuals, communities, and nations." In recognition of this fact, federal and provincial governments have invested substantially in postsecondary education in this country, with impressive results - high participation rates, high levels of educational attainment, and degrees and credentials that are accepted and valued worldwide.
In short, these public investments positioned Canada well for the knowledge era in which we live. However, the steep reductions in the core funding of postsecondary institutions in this decade have now put at risk the competitive advantages built through earlier public investments, especially at a time when other countries are allocating greater resources to their postsecondary institutions. Between 1993 and 1998, real government funding per student for Canadian universities declined by almost twenty percent. Colleges also experienced significant per student declines. At the same time, American colleges and universities received ten percent more real government funding per student. The decline in public funding for postsecondary institutions, due in part to severe cuts in federal transfers, has put at risk their ability to provide high-quality, accessible education to all academically-qualified students and to pursue innovative research.
The impacts of the cuts on Canadian colleges and universities have been striking. Students and their families are bearing an increasing proportion of the cost of their education through higher fees; many individuals face a crisis of student debt; there are fewer faculty; student-teacher ratios have been steadily increasing; many highly-skilled faculty members have left Canadian institutions; the acquisition of books and journals by academic libraries has been cut; there are inadequate levels of investment in the indirect costs of research; deferred maintenance and outdated physical infrastructure are growing problems; and institutions are unable to provide the full technological support required for the demands of a modern educational experience.
The financing of postsecondary institutions has historically been a joint responsibility of the federal and provincial governments, with the federal government helping to underwrite provincial core funding through the transfer payments. As a result, the resolve and commitment of both levels of government is required to properly address the current situation of underinvestment in Canada's universities and colleges. We acknowledge the important initiatives in support of research and educational opportunity in the last three federal budgets. Various provincial governments have also undertaken significant initiatives in these areas. Nevertheless, the fundamental issue of core funding remains to be addressed. The need is urgent.
In August 1999, Ekos Research released the results of a survey on federal budgetary priorities which revealed that 85 percent of those surveyed felt that education should be a high priority for the federal government, compared, for example, to 61 percent who felt that tax cuts should be a high priority. Only health care surpassed education as the top priority. The Ekos survey also revealed that 55 percent of respondents felt that in its next budget, the Government of Canada should put the most emphasis on "investing in social programs like health and education", compared to 24 percent who felt that reducing the debt was most important, and 19 percent who chose tax cuts. This public support for greater levels of investment in education was reflected by the Western premiers and territorial leaders in May 1999, when they unanimously called on the federal government to restore federal transfers in support of postsecondary education; and subsequently by all provincial and territorial leaders at the Annual Premiers' Conference in August 1999 when they stressed the importance of restoring federal transfers to fund social programs, particularly for postsecondary education.
The federal government has now turned the corner on the deficit. It is time to make strategic investments that will provide higher standards of living for all Canadians. Private sector forecasters, using the same conservative economic assumptions employed by the federal government, are predicting that the surplus will be sufficiently large to permit a balanced approach between increasing federal transfers in support of PSE and pursuing other priorities of the government.
We cannot overemphasize the importance of a healthy and vibrant postsecondary education sector to the future prosperity of Canada. We urge you and your colleagues to continue the Finance Committee's strong support for higher education by calling on the federal government to immediately increase federal transfers in support of postsecondary education.
Yours truly,
Mr. Gerald Brown
President
Association of Canadian Community
Colleges
Mr. Robert J. Giroux
President
Association of Universities and
Colleges of Canada
Mr. Jason Aebig
National Director
Canadian Alliance of Student Associations
Dr James Turk
Executive Director
Canadian Association of University Teachers
Mr. Michael Conlon
National Chairperson
Canadian Federation of Students
Dr John Service
Chair
Canadian Consortium for Research
c.c. : Members of the Standing Committee on Finance
Hon. Paul Martin, Minister of Finance
Peter Adams, M.P., Chair of the Government Caucus on Postsecondary
Education and Research