Hi all.  Our budget commentary is now up and available here.

This was a difficult budget to evaluate.  By no stretch of the imagination can it be called an “education budget,” and some of it seems to have been thrown together; yet at the same time some of the changes seem quite profound.

First, it must be said that there are areas where the Budget is most notable for what it did not do.  It did not renew the Business Higher Education Roundtable’s existing funding package, which runs out in early 2023 (presumably there will be some off-budget-cycle investment).  Neither did it implement any of the changes to the Canada Student Financial Assistance Program promised in the 2021 election manifesto.  Also, some of the points of note were more statements of intent rather than actual policy announcements; most notably with respect to labour market agreements with the provinces.  None of these things represent a failure or betrayal by the Liberals – none were do or die, and most will probably be dealt with inside of a year.  I might have preferred they dealt with these issues now, but it’s really not a big deal.

Second, most of the direct money related to science is relatively small beans, with the possible exception of the net-zero emissions in agriculture piece.  The Research Security initiative, where the government is now paying universities to set up the minimal amounts of security necessary to stop secrets being funnelled abroad is not very big, but it is a definite sign of  the lobbying power of universities: in none of the other Five Eyes countries, so far as we can establish, have governments ever paid universities to do what might be seen as basic due diligence in this area.

No, the real change is with respect to the funds meant to support private sector R&D.  For years there has been a debate in world innovation policy circles about whether it is better to support innovation through tax credits (i.e. firms figure out how to spend money and tax credits follow automatically) or through direct subsidies (government or arms-length bodies “pick winners”).  Over the past decade or so the balance of opinion has shifted decisively towards the latter even though the role of governments in picking specific firms remains the cause of much apprehension.  Canada, with its massive investments in Scientific Research & Experimental Development (SRED) Tax credits was seen as a laggard, even after the mild reforms which accompanied the Jenkins Report a decade ago.  Superclusters – clumsily-designed as they are in many ways, were nevertheless a step in the right direction in that they fronted money to individual companies.

But look at the package in this budget: less money for SRED.  More money for clusters.  And – glory be – $1 billion over five years for a new innovation agency, modelled on some of the best global practices, and which focuses directly on the problem of insufficient investment in private R&D.  Though it is not being sold as a single coherent shift, it might turn out to be one in the end.  Not only that – Superclusters have lost their goofy name (they are now simply and soberly “innovation clusters”) and the Canadian Advance Research Projects Agency – dreaded CARPA, that asinine policy answer to a question nobody asked – was simply deep-sixed.  Finally, the word Moonshot is nowhere to be found in the document.  It’s almost as though grown-ups have once again been put in charge of innovation policy.

Not everyone will view this balance sheet as good for higher education: in particular, the shifts in innovation policy will make it harder for university presidents to argue, as they have done for so long, that the innovation economy requires pouring ever more money into bright shiny buildings and labs on campus.  That said: it is without question the best day that innovation policy has had in a long time in the country.  And on that score alone I think this budget deserves some applause.