Minister's Message

Our government is committed to positioning Canada to exit the current downturn quickly and emerge stronger and more competitive in the global economy. In doing so, Industry Canada and its Portfolio partners will continue to play their key roles in increasing the country's capacity to create jobs and economic growth — for next year and the next decade.

While the recession originated beyond our borders, it had real consequences for Canadians and Canadian business. And despite improving conditions, there is work to be done. In 2010, a major focus will be completing the stimulus measures of Canada's Economic Action Plan (www.actionplan.gc.ca). Introduced in Budget 2009, the Plan's full effect will be felt in 2010–11, and its measures will help solidify the recovery.

Over this period, Industry Canada and its Portfolio partners will work with industries and sectors hit hardest by the recession. Initiatives will include activities to boost community economic development and to extend broadband infrastructure to underserved or unserved areas across the country. To build on the momentum gained through our past investments in science and technology, significant effort will be directed to shaping the knowledge-based economy.

Industry Canada will also focus on supporting business and industry to capitalize on emerging opportunities at home and abroad. Getting our economic frameworks right, through forward-looking policies, is central to ensuring Canada's place in the global marketplace. We remain committed to two-way trade and investment, which raises our capacity to create jobs and economic growth and provides for sustainable prosperity.

In 2010–11, the Natural Sciences and Engineering Research Council of Canada will build a competitive advantage in priority science and technology areas by training an increasing number of graduates with the skills needed for today's economy, creating strategic partnerships with the private sector, and providing the best Canadian scientists and engineers with the resources that allow them to develop as leaders in the global research community.

I will work with my colleagues, the private sector and other governments to advance the recovery and build the foundation for a strong, competitive economy.

It is my pleasure to present this year's Report on Plans and Priorities for the Natural Sciences and Engineering Research Council of Canada.

Section I – Overview

Raison d'être

The vision of the Natural Sciences and Engineering Research Council of Canada (NSERC) is to make Canada a country of discoverers and innovators for the benefit of all Canadians. NSERC aims to maximize the value of public investments in research and development (R&D) and to advance prosperity and quality of life in Canada by supporting the creation and transfer of knowledge in the natural sciences and engineering (NSE) and by ensuring that people are trained to discover, develop and apply knowledge and technology.

Responsibilities

NSERC is a departmental corporation of the Government of Canada and was created in 1978. It is funded directly by Parliament and reports to it through the Minister of Industry. NSERC's Council is composed of the President and up to 21 other distinguished members selected from the private and public sectors. The elected Vice-President is the Chair of Council and of its Executive Committee. The Council is advised on policy matters by various standing committees. The President of NSERC is the Chief Executive Officer. Funding decisions are approved by the President on the basis of recommendations made by peer review committees.

In fiscal year 2010-11, NSERC will invest over $1 billion in post-secondary research and training in the NSE. NSERC's budget represents 10 percent of the federal government's expenditures for science and technology (S&T), and 20 percent of all university R&D funding in the NSE.

Mandate

The functions of NSERC, based on the authority and responsibility assigned to it under the Natural Sciences and Engineering Research Council Act (1976-1977, c.24), are to:

• promote and assist research in the natural sciences and engineering, other than the health sciences; and
• advise the Minister in respect of such matters relating to such research as the Minister may refer to the Council for its consideration.

NSERC's Governance Structure

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Strategic Outcomes

In order to achieve its mandate, NSERC works toward the following strategic outcomes:

NSERC's focus on people, discovery and innovation maps directly onto the Federal S&T Strategy which emphasizes building a People Advantage, a Knowledge Advantage and an Entrepreneurial Advantage for Canada. All of NSERC's funding relates to these advantages.

Program Activity Architecture

Planning Summary

Contribution of Priorities to Strategic Outcome(s)

Risk Analysis

NSERC's strategic and operational priorities are managed and are monitored according to NSERC's integrated Management and Accountability Framework (MAF) and Risk-based Audit Framework (RBAF). In the development of the MAF-RBAF, a number of different types of risks were identified and four risks are considered significant. These four significant risks, which may impact NSERC's plans and priorities over the reporting period, are summarized below:

NSERC continues to assess and update its risk profiles to ensure that they remain relevant. Periodic reviews are fundamental to ensure that the risk assessment process is adequately robust in highlighting key risk areas.

In addition, NSERC experiences risks related to the current economic situation that are integral to all of its programs and that could influence plans, priorities, performance and decision making over the three-year reporting period. For example, the reduced capacity of Canadian industry to engage in R&D in times of economic uncertainty may compromise NSERC's ability to deliver on partnership programs that require contributions from industrial partners. NSERC's Strategy for Partnerships and Innovation serves as a framework to reduce further risks for industry to keep them engaged. A risk in launching our new Strategy for Partnerships and Innovation is in the modest amount of resources available at this time. The mitigation strategy is an approach to SPI that is scalable; progress toward achieving the SPI goals will be achieved through pilots and the internal reallocation of resources.

While NSERC administers a significant budget, the Council's overall risk level compared to other government entities is considered low, in terms of continuity of government operations and the maintenance of services to, and protection of interests of, the Canadian public. This assessment of risk level is further supported by the Blue Ribbon Panel report on Grants and Contributions which stated, "The record of performance by the federal research granting agencies, including CFI, has been deemed high by international standards. The two councils and CIHR have successfully managed their own research portfolios, using a rigorous system of oversight, including detailed memorandum of understanding signed by all recipient institutions and regular financial monitoring visits of recipient universities."

Expenditure Profile

For the 2010-11 fiscal year, NSERC plans to spend $1,050.7 million to meet the expected results of its program activities and contribute to its strategic outcomes. The figure below illustrates NSERC's spending trend from 2007-08 to 2012-13.

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Spending increase:
From 2007-08 to 2009-10, NSERC's total budget increased as a result of the following new investments:

• $34 million increase to core funding for collaborative research that directly contributes to the knowledge and innovation needs of Canada's automotive, manufacturing, forestry and fishing industries (Budget 2008);
• $19.1 million in 2008-09 and 2009-10, respectively, for the Centres of Excellence for Commercialization and Research (CECR) program (Budget 2007);
• $7.0 million in 2008-09 and $7.4 million in 2009-10 for the Business Led Networks of Centres of Excellence (BL-NCE) program (Budget 2007);
• $4.2 million in 2008-09 and $6.9 million in 2009-10, for the Industrial R&D Internships (IRDI) program (Budget 2007 and Budget 2009);
• $2.1 million in 2008-09 and $14.6 million in 2009-10, for the College and Community Innovation (CCI) program (Budget 2007);
• $14 million in 2009-10 for a temporary expansion of the Canada Graduate Scholarships (CGS) program (Budget 2009); and
• $11 million in 2009-10 for the Canadian Light Source (Budget 2008).

Spending decrease:
In 2008, NSERC conducted a comprehensive review of the funding, relevance and performance of all its programs. The conclusions of this Strategic Review were accepted by Treasury Board and reflected in Budget 2009. As a result of this exercise, NSERC's core funding will decline by $11.2 million in 2009-10, $23.3 million in 2010-11 and $34.7 million in subsequent years (relative to 2008-09 spending levels).

A second reason for the spending decrease observed since 2009-10 is that the BL-NCE program will cease to have funding in 2012-13. The BL-NCE program will have administered the $34.8 million over five years that was earmarked for this program in Budget 2007 and administered through NSERC. 

Also, the last of the $38.5 million received by NSERC as part of Canada's Economic Action Plan for increased CGS and IRDI programs will be spent in 2010-11.

NSERC's administration costs are just over four percent of its total budget and this percentage is decreasing. This is low compared to similar agencies in Canada and around the world. NSERC is able to maintain this low level of overhead expenses by extensively using volunteer committee members and peer reviewers, obtaining agreement from Canadian universities that receive NSERC funds to participate in their administration, and sharing the costs of common administrative services through a successful partnership with SSHRC.