Lower funding looms as CFI prepares for last five years of mandate

The Canada Foundation for Innovation (CFI) is looking ahead to the latter part of its mandate as it deals with the prospect of reduced funding levels and the possible end to several specialized programs. Between 2006 and 2010, the money available for research infrastructure support through the CFI’s flagship Innovation Fund is slated to fall sharply. Currently the CFI has $750 million plus $150 million in interest available for the period. Unless new money is pumped into the system, the size and frequency of competitions will be drastically curtailed.

Since its creation in 1997 as an arm’s length, non-profit organization, the CFI has received $3.15 billion in federal funding, delivered with year-end money that otherwise would have gone towards paying down the debt. With the prospect of a larger-than-expected federal surplus this year, many are watching closely to see whether the Liberal administration will once again allocate year-end funds to address the prospect of reduced CFI funding.

Otherwise, the lower funding levels after 2006 will kick in at a time when Canada’s university research enterprise is cranked up at its highest level in history and the pace of technological change is accelerating rapidly. It will also occur during the most important phase of the emerging Innovation Strategy, when all stops will be pulled out to reach its ambitious targets, including a doubling of federal R&D support.

OPTIONS BEING CONSIDERED

Other issues are also coming to the fore. Having successfully primed the engines of innovation, the CFI is considering a number of options, including taking its strategic planning to a higher level, enhancing its role in cluster development and commercialization, and adapting its mandate to allow for broader eligibility of its funding programs.

“We’re at the five-year point and there’s the sense that although things are going well, it’s important to take stock and build on what we’ve already accomplished,” says CFI senior VP Carmen Charette. “The CFI is into continuous improvement to ensure that our programs are relevant.”

As the largest player with the largest financial clout in the federal government’s arsenal of research assistance programs, the CFI recently held a series of roundtable discussions to solicit views on future directions for a wide range of issues. But funding stands out as a particular concern.

“Starting in 2006, we’re looking at cutting in half our level of investment,” says Charette. “For the institutions, this has allowed them to bring their research activity to a level they couldn’t have thought about just a few years ago. There will continue to be a need.”

That need certainly won’t be met with $850 million over five years, particularly after $2.9 billion has been pumped into the system between 1998 and 2005.

SUNSETTING PROGRAMS

The federal government must also decide what to do with several programs the CFI was mandated to undertake. One-off funding was provided for three specific initiatives: operating support for the Canada Research Chairs program ($250 million), infrastructure operating funds ($400 million) and international funds ($200 million). Although these programs were all created to respond to an urgent need, they will sunset unless funding is replenished. The international fund, for instance, has only $36.4 million remaining after a successful inaugural competition.

“This raises the issue of sustainability. What happens after 2005? We’re just one piece of the puzzle,” says Charette. “Other organizations contribute to the operation of facilities, for example. So it will depend on what happens in the broader scheme of research funding.”

As part of its strategic planning process.the CFI commissioned external evaluations on its Innovation Fund and New Opportunity Fund. The report on the former recommended that its budget be increased to tackle the high level of faculty renewal now underway. The CFI responded by allocating an additional $300 million, which decreased funding available for other programs.

The evaluation of the Innovation Fund noted that the support it has provided to date could be “at risk” if new resources are not found to continue the Infrastructure Operating Fund, which runs out of money at the end of 2005. It adds that such a scenario will play out “at a time when Canada’s research institutions are showing definite signs that research and innovation in this country have taken off”.

The latest competition for Innovation Fund support confirms such a contention. The competition received 921 notices of intent worth $2.5 billion by the December 18/02 cutoff date. Full applications for those that make the cut are due by the end of May, with decisions scheduled for early 2004. This is the fourth and last Innovation Fund competition before 2006, after which the available funding is reduced by half.

“The competition is a very positive sign that the research community is up to the challenge of making Canada one of the most innovative countries in the world,” says Charette.

The rapid pace of technological change as it pertains to research is also creating major challenges. Many researchers that secured funding in the early days of the CFI now require new equipment to continue their work. To illustrate the point, Charette points to the field of high performance computing (HPC). Several months ago, Canada had 13 of the world’s top 500 HPC facilities. Today, that number has dropped to just two, as researchers in other countries aggressively upgrade their equipment.

INSTRUMENTATION ADDED TO COMPETITION

Despite the huge demand for its funds, the CFI recently added a new research area to the list of technologies it wants to encourage. In the latest competition it announced that it would accept proposals for the development of novel research instrumentation. Canada has not enjoyed much success in the area of instrumentation, although the potential for commercialization is high and many breakthroughs in other countries have resulted in Nobel Prizes.

“We’ve opened the door to that so it will be interesting to see what comes in,” says Charette. “Canada has had some success in the past but essentially it’s an area of untapped potential.”

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