[cmath] "Stimulus Budget" cuts granting councils

[Nassif Ghoussoub]

Please read this analysis on how the new budget affects higher  
education… note that the granting councils were cut and the money put  
into graduate scholarships. It is mind-boggling.


The following document highlights key items announced in today’s  
federal budget. A more comprehensive survey of all budget measures  
related to higher education and university research will follow  
tomorrow.

Introduction

Finance Minister Jim Flaherty today presented his fourth budget since  
the government took office in January 2006. With the country in a  
recession, Budget 2009 proposes a major economic stimulus package,  
with more than $40 billion in support of the Canadian economy over the  
next two years. Most of this spending is for economic stimulus  
measures that are “timely, targeted and temporary”. Advantage Canada  
and the government’s Science and Technology Strategy remain important  
documents of reference for the government as it looks to spend money  
on projects that “protect the jobs of today, while readying our  
economy to create the jobs of tomorrow”.

In this context, AUCC strongly welcomes the investments in higher  
education and university research infrastructure announced in the  
budget, specifically the knowledge infrastructure investment that  
relates to our pre-budget submission to Minister Flaherty. Industry  
Canada will manage a $2 billion infrastructure fund to support  
deferred maintenance, repair projects and construction at  
postsecondary institutions. A number of other significant  
announcements related to infrastructure have a university link,  
notably $750 million for current and future activities of the Canada  
Foundation for Innovation, including the launch of one or more new  
competitions by December 2010.

Mr. Flaherty's budget plan predicts a significant deficit of $33.7  
billion for the 2009-10 fiscal year and $29.8 billion the following  
year. Against this backdrop, 21 federal departments and agencies were  
asked to undertake a strategic review of their expenditures. The  
reviews identified savings of $586 million a year that are being  
redirected to fund new initiatives. This exercise resulted in  
reductions in the granting agencies’ budgets of $17.7 million in  
2009-10, followed by a decrease to $43 million in 2010-11, and to  
$87.2 million in 2011-12. No additional support for the Indirect Costs  
Program was announced. However, additional funding of $87.5 million  
was announced for the Canada Graduate Scholarship program.

The budget will require the support of newly-appointed Liberal leader  
Michael Ignatieff to pass in the House of Commons, as the Bloc  
Québécois and New Democratic Party have already indicated that they  
would oppose the budget. Mr. Ignatieff is holding a special Liberal  
caucus meeting tonight and will inform the House of Commons tomorrow  
whether Liberal party members will support the budget.

University infrastructure

AUCC’s pre-budget brief recommended including a targeted university  
infrastructure initiative to address the $2.4 billion in universities’  
urgent accumulated deferred maintenance backlog as part of an  
effective economic stimulus package.  Budget 2009 provides up to $2  
billion over two years for accelerating repairs, maintenance and  
construction at postsecondary institutions. The funds under this  
initiative will be managed by Industry Canada, with 70 percent of the  
funding dedicated to university infrastructure and the remaining 30  
percent for infrastructure at colleges.

While many details have yet to be worked out, the budget proposes that  
allocation will be based on project merit and readiness and the funds  
will pay for up to half of project costs, leveraging an equivalent  
amount from other partners.  Preference will be given to projects at  
universities that can improve the quality of research and development  
at the institution. Projects at colleges will strengthen their ability  
to deliver advanced knowledge and skills training.

In view of the partnership funding and project readiness requirements,  
having projects that are vetted by the provinces will help to expedite  
project approval.

Canada Foundation for Innovation

Additional funding for the Canada Foundation for Innovation is a major  
component of the government's infrastructure package. Budget 2009  
provides $750 million for CFI, including $150 million in additional  
funding for the competition currently under way, the results of which  
are scheduled to be announced in June.

The CFI funding also includes $600 million for future activities of  
the foundation, including the launch of one or more new competitions  
by December 2010 in support of priority areas identified by the  
Minister of Industry in consultation with CFI and guided by the  
foundation's strategic plan, which is to be developed by CFI in  
collaboration with the Minister of Industry. Budget 2009 sends a  
strong message that the government is committed to CFI for the longer  
term, stating that the government will “continue providing support for  
leading-edge research infrastructure through the Canada Foundation for  
Innovation.”

Federal granting agencies

Budget 2009 indicates that the base budget of the three granting  
agencies will be reduced over the next three years, as part of the  
government’s strategic review process. The combined budgets of the  
granting agencies will decrease by $17.7 million in 2009-10, followed  
by a decrease to $43 million in 2010-11, and to $87.2 million in  
2011-12. By 2011-12, the decrease represents a five percent cut from  
the current levels of approximately $1.7 billion. This decrease means  
that the combined level of funding in 2011-12 of the three granting  
agencies will be the same as in 2007-08, not taking into account  
inflation.

The granting agencies undertook the strategic review process in 2008,  
along with 18 other departments and agencies, in order to identify low- 
priority areas where savings could be achieved, so that funding could  
be redirected within the organization or to other government  
priorities. The budget states that the resulting savings are being  
redirected to fund new initiatives, including funding for a temporary  
increase in the Canada Graduate Scholarships program (see separate  
item).

Details regarding which of the granting agencies’ programs and /or  
expenditures will be affected by these cuts will be known only as of  
February 3.

Institutional costs of research

No new investment in the Indirect Costs Program was announced in  
Budget 2009.  Consequently, we anticipate the budget of the program  
will remain at its current level of $330 million for the year 2009-10,  
although we will need to await confirmation of this funding level on  
February 3 (as per the granting agency item above). Should funding  
remain at the current level of $330 million in 2009-10, the overall  
reimbursement rate of the program will fall from its current level of  
25 percent to approximately 23.5 percent in 2009-10, given that the  
direct costs funding base on which the allocation is made (a three- 
year average of granting agency funding received between 2005-06 and  
2007-08) has increased. The overall reimbursement rate in 2009-10 will  
be the lowest since the permanent program was established in 2003. In  
its pre-budget submission to Finance Minister Jim Flaherty, AUCC  
called for a minimum additional investment of $21 million in the  
Indirect Costs Program, in order to maintain the current overall  
reimbursement rate at 25 percent in 2009-10.

Graduate student support

As part of its effort to develop the highly skilled workforce of  
tomorrow, the federal government has committed to providing an  
additional $87.5 million over three years, starting in 2009-10, to the  
three federal granting agencies to expand temporarily the Canada  
Graduate Scholarship program. NSERC and CIHR will each receive $35  
million while SSHRC will receive $17.5 million, to be focused on  
business-related degrees. The new funds will provide for an additional  
500 doctoral scholarships, valued at $35,000 each per year for three  
years beginning in 2009–10, and an additional 1,000 master’s  
scholarships, valued at $17,500 each for one year, in both 2009–10 and  
2010–11. The CGS program was created in Budget 2003 and currently  
supports 2,500 master’s and 2,500 doctoral students.

Budget 2009 also provides an additional $3.5 million over the next two  
years to the Industrial Research and Development Internship program.  
This will enable the program to offer an additional 600 graduate  
internships in science and business. The program was first announced  
in Budget 2007 and received $8.6 million worth of funding over two  
years to support 1,200 graduate and post-doctoral students in  
businesses across Canada.




  
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