Federal support of indirect costs of research begins with modest $200-million fund

The Budget has unveiled a $200-million fund using year-end money to help defray the indirect costs of conducting university research. But its level of support is estimated at slightly more than half of the 40-45% target recommended in a report by the Advisory Council on Science and Technology (ACST). Ottawa is positioning the fund as a stop-gap measure until a fully-pledged program can be put in place and funding will flow through the granting councils and must be allocated by the end of FY01-02.

Federal sources say the granting councils and the university community will be consulted on how the $200 million should be distributed, and which model is best suited for a future program. The announcement is aimed at addressing pent-up demand for federal support of indirect costs. It also allows the government to honour its commitment to the provinces on prior consultation for any new research programs involving different levels of government.

“The universities were asking for 40%. I don’t know if we will be able to provide that with this fund, but I’m sure this is just the beginning,” says Dr Gilbert Normand, secretary of state for science, research and development.

Officials say that when discussions get underway in the coming weeks, the ACST report and its proposed funding model will provide a valuable starting point. The ACST released the report earlier this year and recommended that a new program — tentatively called the Canada University Research Environment Initiative (CURE) — be chosen as the preferred method of delivery for indirect costs. Modelled on the Canada Research Chairs (CRC) program, CURE would deliver funds directly to each university “based on its performance in securing funds from the federal research councils in peer-reviewed competitions” and based on a rolling three-year average. Like the CRC and Canada Foundation for Innovation (which both provide funds for indirect costs), CURE would be arm’s length.

The university community is generally happy with the announcement, in particular the Association of Universities and Colleges of Canada (AUCC), which long argued for the need to fund all aspects of university research.

“It’s such a significant step that the government has recognized the need (to support indirect costs) in the Budget,” says AUCC president Dr Robert Giroux. “The economy is going down but the government is continuing to support university-based research ... Up to now, the universities had to take funds from their general operating envelopes which is paid for by the provinces. That’s why the provinces have been after the feds to pay for indirect costs.”

Giroux adds that the AUCC will continue to push for indirect cost funding at 40%.

The ACST is recommending that federal support begin at 40% (about $450 million annually based on the funding received by the granting councils in FY01-02), and increase support over time to 45%. Universities receiving the smallest amount of research funding would receive 90-95%.

Dr Marc Reneau, president of the Social Sciences and Humanities Research Council, supports the ACST model as it pertains to smaller institutions. But he’s concerned that middle-sized universities without medical schools or affiliated teaching hospitals are at a disadvantage.

“There are 16 medical schools in Canada and indirect costs will go disproportionately to those universities. The others will be impoverished,” says Reneau. “Those schools in the middle, like York University, University of New Brunswick, Simon Fraser University and others, lost on the Chairs program and they’ll lose on indirect costs. They need to mobilize or they will have to accept the ACST formula.”

The greatest potential beneficiary of indirect cost funding will be Canada’s so-called Big Ten universities, as well as those institutions with medical schools.

Dr Alan Bernstein, president of the Canadian Institutes of Health Research, says researchers funded by his council stand to benefit significantly from the new fund, although he notes it’s one-time money with only an intent to follow through with a permanent mechanism.

“We have to demonstrate it will be spent wisely and it has to be spent by March 31st , so we will have to build in a very measurable accountability framework,” he says. “I’m very pleased with it. It will greatly strengthen health research in this country.”

The president of the Natural Sciences and Engineering Research Council is also looking forward to discussion on the fund and a funding model for the future.

“The funding of indirect costs has two policy goals, capacity building and supporting excellence,” says Dr Tom Brzustowski. “The discussions will have to be complete by March 31st but I don’t think they will be too difficult. This is a one-time fund to bridge to the time when a sustainable solution will be found. But we still have to agree on a formula.”

R$