CANADA

Renewing an old promise

MARC CLARK January 18 1988
CANADA

Renewing an old promise

MARC CLARK January 18 1988

Renewing an old promise

CANADA

It was the kind of pre-election promise that can come back to haunt a politician—and for Prime Minister Brian Mulroney, it has. In 1984 Mulroney vowed to double Canada’s commitment to research and development. Instead, the government froze federal research spending and grants, and announced plans to cut back on tax breaks for private firms doing research. Scientists, educators and business leaders roundly condemned Mulroney for failing to deliv-

er on his promises. But this week Mulroney intends to address his critics. Among new promises expected from Mulroney at a government-organized three-day national conference on technology and innovation in Toronto: plans to inject more than $1 billion during the next five years into science and technology.

At the same time, Regional Industrial Expansion Minister Robert de Cotret will present details of a proposed new ministry of industry, science and technology. It will combine the remnants of his department— whose responsibilities for aiding poorer regions have been largely taken over by new western and Atlantic development agencies—and the ministry of state for science and technology. But simply renewing Mulroney’s promises—plans to form the new ministry were announced last August-will not likely silence the critics.

The criticism centres on the fact that last year’s outlays of an estimated $7.1 billion on research and development by governments and industry in Canada amounted to only 1.3 per cent of the gross domestic product. That was about the same percentage as in 1984, despite Mulroney’s promise. By comparison, the United States and Japan devoted 2.8 per cent of their GDP to R and D, and Sweden 2.4 per cent. Indeed, since the Conservatives took office, Mulroney has reduced the govern-

ment’s share in research by holding annual federal spending on R and D steady at $2.5 billion, while private spending has kept pace with inflation and the growing economy. Said Gordon Lloyd, director of technical affairs for the Canadian Manufacturers’ Association: “Countries all over the world understand that you have to support research and development or be left behind. This government isn’t doing enough.”

For retired National Research Council physicist Fred Lipsett, who voted Conservative in 1984, Mulroney’s preelection rhetoric is a bitter memory. Said Lipsett: “I was elated by the Conservatives’ promise to increase spending on R and D. I thought it would be good for research and good for the country.” Instead, the council, which since 1916 has been the government’s research flagship, received a shock. The Ottawa institution’s budget dropped from $502 million in 1984 to

$408 million in 1987. Whole sections of the research establishment disappeared, including the laboratory that nurtured Nobel Prize-winning chemist John Polanyi. The staff has been cut to 3,000 from 3,270. Many, including Lipsett, 62, have taken early retirement. Lipsett insists that the research council, where scientists developed the first heart pacemaker and the sophisticated system that guides the space shuttle’s Canadarm, is “headed for mediocrity.”

The government upset private industry by reducing tax incentives for R and D. Last year Finance Minister Michael Wilson announced that the government would allow businesses to deduct research costs up to one half of their federal tax payable, instead of the full amount. After protests, Wilson agreed to set the deduction at threequarters of research costs.

Government officials acknowledge that funding of science and technology has taken second place to reducing the federal budget deficit. Said one senior bureaucrat: “More money has to be put on the table. There’s no doubt about that.” But the Conservatives were made wary by the dismal failure of the scientific research tax credit, a complex tax concession introduced by the Liberal government that did litg tie to encourage science, I while costing the governz ment more than $1 billion. 9 The bureaucrat added that government had to clean up its own house before readi-

ing out to industry. Said the official: “The old stuff about splashing money around the country makes no sense. We had to reorganize.”

As part of that reorganization, the government has set up advisory boards to help select industries and technologies that are worthy of support. The provinces declared their support in a joint national science and technology policy that they signed last March with Ottawa. The administrative groundwork is now in place, de Cotret said, for more effective and intelligent use of funds to support Canada’s science and business community. The government’s immediate task is to convince skeptics—including about 200 representatives of industry, labor and the academic world invited personally by Mulroney to this week’s Toronto conference—that this time it really means business.

MARC CLARK in Ottawa