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Expert Review Panel on Research and Development

The Government of Canada has launched a comprehensive review of federal programs that support business innovation. As announced in Budget 2010, a six-member expert panel will provide recommendations on maximizing the effect of federal programs that contribute to innovation and create economic opportunities for business.

The panel has been asked to review three types of federal research and development (R&D) initiatives:

  1. Tax incentive programs such as the Scientific Research and Experimental Development (SR&ED) program
  2. Programs that support business R&D through:
    1. general support (e.g., Industrial Research Assistance Program)
    2. sector-specific support (e.g., Strategic Aerospace and Defence Initiative)
  3. Programs that support business-focused R&D through federal granting councils and other departments and agencies, including research at universities and colleges (e.g., Centres of Excellence for Commercialization and Research)

The panel will seek submissions from interested parties and conduct focused research to support its work. It will report back in one year to the Minister of State (Science and Technology) with concrete recommendations.

The panel has also been asked by the Government of Canada to consult on how best to maximize the impact of government procurement, and in particular military procurement, on job creation, manufacturing capability, innovation, and economic growth in Canada. The Panel will provide a supplementary report to the Minister of Public Works and Government Services, to be released after the Panel's main report.

Overall, the review will build on the evidence presented in Innovation and Business Strategy: Why Canada Falls Short, a 2009 report by the Council of Canadian Academies that examined why the business strategies of Canadian companies are less reliant on innovation than their counterparts in other countries. The review will also respond to State of the Nation, a 2008 report by the Science, Technology and Innovation Council that drew attention to Canada's comparatively poor performance in transforming new knowledge into innovation. Both reports underscored the challenges facing the Canadian economy in terms of productivity growth and drew a link to low business expenditures on R&D and low rates of commercialization of new products and services.

Business innovation is increasingly vital to maintaining both Canada's global competitive advantage and high standard of living. The Government of Canada plays an important role in fostering an economic climate that encourages business innovation. It provides substantial funding through tax incentives and direct program support. Despite the high level of federal support for R&D, Canada continues to lag behind other countries in a number of areas: business R&D spending, rates of commercialization of new products and services, and productivity growth.

In 2008, Canada ranked second among Organisation for Economic Co-operation and Development (OECD) countries in the total value of tax incentives and direct (provincial and federal) support for business R&D as a percentage of gross domestic product (GDP). Nevertheless, Canada currently ranks 16th among OECD countries for business expenditures on R&D as a percentage of >GDP.

The review will support Advantage Canada, the government's long-term economic plan, and provide a basis for future investments under the government's Science and Technology (S&T) Strategy, Mobilizing Science and Technology to Canada's Advantage.

For more information, please consult the Review of Federal Support to Research and Development website