Despite the emphasis placed on innovation for a green economy by senior government officials at Tuesday’s federal budget reading, Canada’s postsecondary sector barely factored into the Liberals’ 2023 fiscal plan – for the second year running. Budget 2023, which was tabled by Finance Minister Chrystia Freeland amid a global economic slowdown, broadly focused on the areas of affordability, health care and clean technology but was met with disappointment from the university community.
Graduate and postdoctoral research funding was left out of the budget despite continued efforts by lobbyists and advocates for significant increases to federally funded research grants that have remained stagnant for two decades.
Paul Davidson, president of Universities Canada, was quoted in a news release admonishing the government for a “lack of any significant support for Canadian research.” Such investments are “urgently needed to keep Canada competitive,” he added.
The government noted in the budget document that it will be “closely considering” the advice of the recently concluded Advisory Panel on the Federal Research Support System, which recommended an increase of 10 per cent annually for five years to the granting councils, among other investments. The advisory panel also took a harsh stance on graduate and postdoc funding levels, noting that current amounts were uncompetitive and “at a breaking point.” Marc Johnson, a faculty member at the University of Toronto and an organizing member of the grassroots advocacy group Support our Science, expressed frustration and dismay that the panel’s recommendations were entirely absent from the budget, despite having been presented to the government earlier this year.
“There is no excuse whatsoever,” said Dr. Johnson, who is particularly concerned about the absence of funding increases at the graduate and postdoctoral levels. “Some of the brightest minds this country has to offer are leaving Canada in droves, and this budget indicates that Minister Freeland and Prime Minister Trudeau do not think Canada should be competitive on a global scale.”
What did make the budget: colleges, student grants and loans, space research and innovation
The College and Community Innovation Program
The postsecondary sector did factor into the budget in one significant investment: Canadian colleges, CEGEPs and polytechnics received $108.6 million over three years for the College and Community Innovation Program, a competition administered by the Natural Sciences and Engineering Research Council. The budget document said the funding will assist businesses with accessing expertise and infrastructure in applied research and development.
Janet Rossant, professor emeritus at the U of T and a member of the advisory panel said that it is necessary to recognize the important contributions that colleges bring to training, and to producing research tailored to the private sector for commercial application. But she said these new investments don’t go far enough. “We have to continue to invest in the research system in Canada, both at the funding agencies, and also particularly funding trainees, graduate students and postdocs who will be the highly qualified personnel that will be required to implement many of the other innovation initiatives in this budget.”
Meric Gertler, chair of the board of directors at Universities Canada and president of U of T, said in a written statement to University Affairs that by not committing to significant and overdue investments in the fundamental research happening at Canadian universities – and the people that they employ – the government has “missed an important opportunity to strengthen the foundation of the knowledge economy.”
Student financial aid
Some relief for postsecondary students will come through $813.6 million in 2023-24 to enhance student financial assistance for the academic year beginning Aug. 1. This includes a 40 per cent increase to the Canada Student Grant program so that full-time students can collect a maximum of $4,200, which fulfils the government’s promise from its budget in 2019. However, this amount comes up short compared to the temporary bump introduced when the pandemic hit in 2020: that year the government increased the maximum to $6,000, a decision it extended for two years in 2021 to last until the spring of 2023. According to calculations by Higher Education Strategy Associates, there will be close to $800 million less overall going to students this year compared to last year through the grant program. The budget document notes that students with disabilities and students with dependents will also be receiving an increase through student grants, but how much is not known.
More assistance will come through an increase to the interest-free Canada Student Loan limit from $210 to $300 per week of study. Additionally, the government is increasing the current withdrawal limit on Registered Education Savings Plans (RESP) for the first time in 25 years. The limit will rise from $5,000 to $8,000 for full-time students, and from $2,500 to $4,000 for part-time students. The government notes this will potentially impact up to 500,000 students a year.
The government has also committed to expanding Canada Student Loans forgiveness eligibility to include doctors and nurses practicing in any remote and rural communities with populations under 30,000 through an investment of $45.9 million over four years beginning in 2024-25, and $11.7 million ongoing.
Space research and exploration
Space research and exploration made it into the Liberal budget, with the announcement of more than $2.5 billion over 14 years to the Canadian Space Agency. Just over $1 billion will be committed to continuing Canada’s participation in the International Space Station and roughly the same amount will go towards building a lunar utility vehicle for the next mission to the moon in 2030.
Innovation and clean tech
Meanwhile, back on Earth, more clarity was provided surrounding the $15-billion investment in the Canada Growth Fund (CGF) announced last year. Instead of becoming a subsidiary of the Canada Development Investment Corporation, as announced in the 2022 fall economic statement, the government will introduce legislation that will allow CGF to be managed by the Public Sector Pension Investment Board. The arm’s-length public investment vehicle is designed to attract private capital into the clean economy and will begin investing in the first half of 2023. The Canada Innovation Corporation, also announced in Budget 2022, was not mentioned this year, despite the government having released a blueprint for the new innovation agency just over a month ago.
While this thinned-out budget focused less on innovation than the year prior, the Liberals have committed $500 million over 10 years to support clean-tech development and adoption through the Strategic Innovation Fund led by Innovation Science and Economic Development. The move, combined with four new tax credits in clean technologies and targeted research and development funding for the forestry and dairy sectors, suggests that the Liberal government intends for the private sector to take the lead on research and innovation for the green economy, while leaving universities – and their researchers – effectively shut out of new investments.