Innovation Canada: A Call to Action

Innovation Canada: A Call to ActionIn SummaryThe picture conveyed by the envelope of businessR&D support programs is one of dramaticallycontrasting scales. The great majority of supportis delivered by one program, the SR&ED taxcredit, which accounts for about 70 percent ofthe envelope, is not sectorally targeted andsupports business R&D spending explicitly. The 59programs in the direct expenditure envelope areextremely heterogeneous as to target, deliveryvehicle and administering agent. IRAP is by farthe largest and in 2010–11 accounted for about16 percent of direct expenditure, although thisreflects an extraordinarily increased allocation aspart of the government’s economic stimulusexpenditure. The great majority of the otherdirect spending programs each account for lessthan 2 percent of the direct total, and may insome cases be too small to have significantimpact. Moreover, the combination of small sizeand sheer number virtually ensures that there willbe little awareness among potential businesssector beneficiaries of many of the programs.This challenge is exacerbated by the largeadditional number of business innovationsupport programs delivered by provincialgovernments.The Panel believes, for reasons presented inChapter 5, that rationalization of programs isrequired to increase scale, reduce duplication,improve delivery efficiency and create muchgreater awareness among potential businesssector clients.3-12