The precarious global economic situation served as a backdrop for the tabling of the 2022 budget by Finance Minister Chrystia Freeland on April 7. Although Canada’s economy has largely rebounded from the pandemic, shocks from the war in Ukraine, the resurgence of COVID-19 in China, and the effects of supply and labour shortages on inflation have created a significant amount of uncertainty.
Taking a more cautious approach, the Liberals presented their most fiscally responsible budget since the pandemic began. It commits more than $31 billion in net new spending over the next five years, focused heavily on housing affordability, clean growth and defence. While innovation was a prominent theme, the postsecondary sector was mentioned sparingly. Below are some of the key takeaways for the country’s universities.
Innovation spending focused on the private sector
The budget committed $3 billion in new funding for innovation. The spending plan highlighted Canada’s lagging position in the global race for capital and investment to build the net-zero economy of the future. To boost innovation and attract private sector capital, the federal government proposes establishing a Canada Growth Fund, a new public investment vehicle which will use a suite of financial instruments to reallocate $15 billion of federal money over five years. The fund is designed to attract trillions in private capital, which would be invested in low-carbon industries, new technologies and critical supply chains, and help the country “keep pace” with other developed nations.
The government tabled $1 billion over five years for an innovation and investment agency, designed to boost private sector investments in research and development, and to correct the slow uptake of new technologies across Canadian industries. The new agency represents a “huge evolution” in federal thinking about innovation, according to Higher Education Strategy Associates. The company noted in a budget commentary that Ottawa has shifted to solving the problem of low spending on research and development by working with the private sector, rather than funding universities as an alternative. The budget also indicated that the innovation and investment agency will support the defence sector and boost defence manufacturing, but the promised Canada Advanced Research Projects Agency – which was to be modelled after the famed American DARPA program – was conspicuously missing from the budget.
However, the superclusters were mentioned and have been rebranded and given a funding boost. The five networks are now called “global innovation clusters,” and will receive $750 million over six years, which is half of what they had reportedly asked for. Many universities and research institutions are members of the five clusters, which are meant to bring together government, academia, and industry to create new companies, jobs, intellectual property, and boost economic growth.
Other notable innovation-related investments include the launch of a critical minerals strategy, which will give the country’s mining sector $3.8 billion over eight years. The strategy will support the development of a domestic zero-emission vehicle value chain, including for batteries (which are produced using critical minerals). The National Research Council will receive funding through the strategy, shared with Natural Resources Canada, to support new technologies and bolster supply chains of critical minerals such as lithium and cobalt. The government has also targeted investments in the semiconductor industry ($45 million over four years), the CAN Health Network ($40 million over four years), and the Canadian High Arctic Research Station ($14.5 million over five years).
Canada’s higher education institutions did notch a win with a major investment in agriculture research. The government will provide $100 million over six years to support postsecondary research in developing new agricultural technologies and crop varieties, which could push forward net-zero emissions agriculture.
Read also: Agriculture programs change with the times
Securing and commercializing postsecondary research
To protect federally funded research at Canadian postsecondary institutions “from foreign threats,” the government has committed $159.6 million, starting in 2022-23, and $33.4 million ongoing, to build capacity within institutions to identify and mitigate potential risks to research security. The allocation will also fund a new research security centre, which would advise postsecondary institutions.
Further, the government hopes to improve the country’s intellectual property performance through a new “lab to market” program that will help Canadian graduate students and academics patent their research. The program will cost $47.8 million over five years beginning in 2023-24 and $20.1 million ongoing, which will be distributed by Innovation, Science and Economic Development Canada. The agency plans to conduct a survey to assess the government’s previous investments in science and research, and to establish the best path to commercializing postsecondary research.
Research chair funding
The Canada Excellence Research Chairs program received $38.3 million in funding over four years beginning in 2023-24, with the government stating this could create 12 to 25 new chair positions.
To support Canadian cybersecurity, which is a key priority under the government’s $8 billion defence umbrella, the budget gives $17.7 million over five years and $5.5 million thereafter until 2031-32 for a “unique research chair program to fund academics to conduct research on cutting-edge technologies” relevant to the Communications Security Establishment – the national cryptologic agency. The inaugural chairs will split their time between peer-reviewed and classified research.
Funding for Black researchers
The federal granting councils will be given $40.9 million over five years beginning in 2022-23, and $9.7 million ongoing, to support Black “student researchers,” who are among the underrepresented groups in the awarding of scholarships, grants and fellowships. Additionally, the federal government will give $1.5 million to the Jean Augustine Chair in Education, Community and Diaspora, housed at York University, to address systemic barriers and racial inequalities in the Canadian education system and to improve outcomes for Black students.
Health research and the health-care labour shortage
Although COVID-19 health spending is significantly down from the previous budget, the Canadian Institutes of Health Research has received $40 million to investigate the long-term effects of COVID-19 on health and health-care systems, as well as dementia and brain health.
The budget addresses the health-care labour shortage through a $115 million investment over five years, $30 million ongoing, to expand the Foreign Credential Recognition Program. The government projects that this could help up to 11,000 internationally trained health-care providers find work in the country every year. Further, the government is increasing the maximum amount of forgivable Canada Student Loans for nurses and doctors working in underserved rural or remote communities by 50 per cent, which could total $60,000 in loan forgiveness for doctors and $30,000 for nurses.
Several additional election promises made by the Liberal government in 2021 remain unfulfilled following the budget release, including:
- adding 1,000 chairs to the Canada Research Chair program;
- permanently eliminating the federal interest on Canada Student Loans, as well as increasing the repayment assistance threshold to $50,000 for borrowers who are single;
- creating a new fund to assist with the hiring of 1,200 mental health professionals at postsecondary institutions;
- investing $500 million over four years and dedicating 10 per cent of that sum annually to support Indigenous-governed and operated postsecondary institutions, and;
- Introducing a $100 million per year fund to pursue “moonshot” research into high-impact illnesses where a vaccine may be possible.