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Ottawa takes another stab at solving the innovation conundrum

Canadians might be surprised to learn their country has a science and technology strategy.

Prime Minister Stephen Harper unveiled what he called a "bold new framework" in 2007 – "Mobilizing Science and Technology to Canada's Advantage." Mr. Harper vowed at the time that the plan would make Canada "a world leader in science and technology and a key source of entrepreneurial innovation and creativity."

Seven years later, the promise remains largely unfulfilled. Canada continues to slide further behind other developed countries on most key measures of innovation.

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It is true that the federal government has spent a lot of money over that span – billions of dollars on university research, government research, tax credits, business subsidies and venture capital.

Now, Ottawa is taking another stab at laying out its vision. Greg Rickford, elevated to Minister of State for Science and Technology in this past summer's cabinet shuffle, issued a discussion paper in December. In the months since, he has been quietly tapping business and academic groups for answers to the country's innovation conundrum. Or as Industry Canada puts it, "to sharpen the focus and impact" of all the money it spends.

Why now? Perhaps because Ottawa has become sensitive to oft-repeated charges that it is waging a war on science and scientists. The government would certainly like to bury that perception – even if inaccurate – and turn science into a good-news story before next year's expected election.

On the substance, the government is also anxious to upgrade the innovation side of Canada's S&T performance.

It wants to turn good ideas into viable products and thriving export-oriented companies.

Unfortunately, the government has already tinkered with most of the key levers at its disposal. It has pumped more money into direct research and development grants for smaller companies, invested in venture capital, overhauled the National Research Council, and tightened the rules of its flagship R&D tax credit – the Scientific Research and Experimental Development program. And in the recent budget, Ottawa committed $1.5-billion over a decade to universities, by way of the Canada First Research Excellence Fund.

The government was apparently ready to roll out a new strategy more than a year ago, back when Gary Goodyear was the S&T minister and Christian Paradis was industry minister. After it was punted several times, Mr. Rickford and current Industry Minister James Moore are now expected to take a plan to cabinet for approval in the next couple of months.

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Here's the problem: Mr. Rickford doesn't have a ministry to run. And Mr. Moore's department is only responsible for a portion of the government's S&T efforts.

There is no effective innovation champion inside government. A 2011 expert panel report on federal support for R&D urged Ottawa to name a lead minister and create an independent business innovation council to help deliver funds to companies and better target its programs. The recommendations were ignored.

And even if Mr. Moore and Mr. Rickford could wave a wand, do they know what they want, or even where to start?

The various stakeholders all want something – money, tax breaks, or more influence on policy. If anything, the challenges are greater than they were five years ago.

Canada is a chronic laggard in R&D spending by businesses, compared with other developed countries. Indeed, companies spend less now than five years ago when other countries are spending much more. Spending on university research has stacked up well historically, but our main rivals are quickly overtaking us.

Meanwhile, the country is falling behind in high-technology exports. Between 2000 and 2011, the value of Canada's R&D-intensive tech exports slumped to $25-billion from $33-billion.

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Canada continues to run a large deficit when it comes to intellectual property. In 2012, Canadians spent $10.9-billion to acquire intellectual property developed in other countries, while receiving $3.8-billion in licensing fees from foreigners who use ours.

If the government decides it has something bold and fresh to offer in a couple of months, it will unveil it with some fanfare while Parliament is still sitting.

If, on the other hand, the government peers in its policy cupboard and finds it bare, expect a quiet announcement late on a sultry day in mid-July.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

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