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Minister of Industry's Message

As Canada's economy shows continued signs of growth following the global recession, the Harper government has a clear vision for Canada. We remain focused on creating jobs and economic growth in all regions of Canada. We remain committed to fighting protectionism, the number one impediment to global economic recovery. And we will continue to support science and technology as it drives innovation to improve quality of life for Canadians.

In the coming year, Industry Canada and its portfolio partners will seize the opportunities of the evolving global economy. We will set the conditions for industrial success by improving the policy we put in place, making strategic investments and supporting business-focused programs and services. We are working to remove impediments to competition and to create the best climate for international investment. Industry Canada will lead efforts in developing major policy initiatives to support Canada's digital economy and shape a whole-of-government strategy for federal tourism activities. The Department will also improve the cost-effectiveness and efficiency of its own operations and work with recovering industries and sectors to help assure a solid and prosperous future.

In 2011-12, the National Research Council Canada (NRC) will support federal priorities to increase innovation and productivity for sustainable, long-term economic growth. The NRC's aim is to bring timely technological solutions to the marketplace, in partnership with its clients, in areas of national importance such as health care, natural resources and climate change. The NRC will continue to stimulate the innovation activities of small to medium-sized businesses and collaborate with Canadian firms to develop and deploy technologies and market-oriented results.

And, as always, I will work with the Industry portfolio partners, the private sector and other governments to create the fundamentals for a strong and competitive economy.

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

Minister of State's Message

As Minister of State for Science and Technology, it is my pleasure to present this year's Report on Plans and Priorities for the National Research Council Canada.

The economy remains our government's top priority. As Canada is still recovering from the global recession, we are focused on creating jobs and economic growth.

This is why we are supporting promising new research as part of Canada's Economic Action Plan: to create jobs, strengthen our economy and improve Canadians' quality of life.

Science is key to Canada's future economic growth. To remain at the forefront of the global economy, we must invest in the people and ideas that will produce tomorrow's breakthroughs.

Our investments through the National Research Council are helping Canada develop, attract and retain the world's best and brightest researchers. As a result, our country is strengthening its position as a leading destination for the world's top research talent.

In the four years since Prime Minister Harper launched the Government of Canada's science and technology strategy, we have achieved a great deal, for which we as Canadians can be proud.

From Iqaluit in the Far North to rural Saskatchewan, from Victoria to St. John's and from Quebec's Eastern Townships to Northern Ontario, there are thousands of researchers pursuing some of the most important questions of our time – all with the support and encouragement of the Government of Canada. Indeed, it is through the vital and ongoing efforts of organizations such as the National Research Council Canada that these Canadian researchers will remain on the leading edge of science and innovation for years to come.

Throughout 2010-11, I have seen first-hand the impact that the National Research Council is having on Canada. From support for entrepreneurship in Canadian small and medium-sized businesses through the Industrial Research Assistance Program to the outcomes of successful research and development partnerships, the National Research Council Canada is focused on bringing new products, processes and technologies to the marketplace for the benefit of Canadians. I am proud of the work that the National Research Council Canada has done, and I am looking forward to 2011-12.

This work, however, requires the ongoing engagement and support of our many stakeholders. As we move into 2011-12, I will continue to liaise with our university partners, the private sector and all Canadians to achieve the priorities laid out in this report.

President's Message

The federal government is committed to building a competitive advantage for Canada with science, technology and innovation playing key roles. As Canada's federal research and technology organization, the National Research Council Canada is aligned with this commitment, having plans and priorities to build national strengths in areas of socio-economic importance to Canadians.

I was appointed to lead the National Research Council in April 2010. I am very proud to present my first Report on Plans and Priorities for tabling in Parliament.

In 2011-12, NRC will embark upon a new strategy with an outlook to 2031. NRC intends to more sharply focus its resources on key areas where Canada can be world-class and contribute to improving competitiveness and productivity. The end goal will be to enhance our country's innovation performance in support of our vibrant and prosperous society.

One of our core values is collaboration and partnerships. The coming year will see a strong emphasis on growing relationships across the country and around the world, such as building upon the recent success of the Canada-Israel summit in Toronto in 2010. Addressing some of the biggest challenges in healthcare, the environment, energy and information and communication technologies will require coordinated and collaborative efforts across governments, private industry, not-for-profits, and academia. As part of this coordinated effort, NRC will lead and participate in key federal S&T priority areas by developing and deploying value-added technology, by helping industry to grow its competitive edge in the global marketplace, and by addressing innovation challenges.

To support federal initiatives in cost-effectiveness and efficiency in 2011-12, we are also working on financial and management plans to strengthen decision-making processes, operational efficiencies, and long-term measures for sustainability. Ensuring effective and efficient leadership will enable NRC to realize success against its goals while investing public funds wisely.

Mr. John McDougall, President

Section I – Overview

1.1 Summary Information

1.1.1 Raison d'être and Responsibilities

The National Research Council Canada (NRC) bridges the innovation gap between early stage research and development (R&D) and commercialization, focusing on socio-economic benefits for Canadians and increasing national performance in innovation. A federal leader in technology development, NRC supports the business sector in Canada to enhance innovation capabilities and capacity and become more productive in the development and deployment of innovative products, processes and services for targeted markets. With a presence in every province, NRC combines a strong national foundation with international linkages to help Canada grow in productivity and remain globally competitive. To ensure a multi-disciplinary and integrated approach, NRC works in collaboration with industry, governments, and academia.

NRC is transitioning to a new strategy in 2011. This strategy forms the basis of plans and priorities for 2011-12 and beyond, and drives strategic focus in areas where NRC can make unique and compelling contributions:

• Developing and deploying leading-edge technology in areas of national priority to support sustainable domestic prosperity;
• Fostering industrial, community, and small and medium-sized enterprises (SMEs) innovation, growth, and productivity through targeted support;
• Managing large national research infrastructure and facilities for the scientific and industrial sectors to help push innovation forward and keep Canada at the cutting-edge.

NRC's strategic intent is founded upon a vision and mission designed to support federal science and technology (S&T) priorities.

NRC's success will ultimately be measured by the extent to which it is helping to build a globally competitive and prosperous Canada. NRC plans and priorities intend to generate long-term value in areas of importance to Canada by contributing to the following impact areas for our clients:

• Increased business enterprise expenditures on R&D (BERD);
• Technology commercialization; and
• High-quality job creation.

1.1.2 NRC Accountability Framework

NRC is a departmental corporation of the Government of Canada, reporting to Parliament through the Minister of Industry. NRC works in partnership with members of the Industry Portfolio to leverage complementary resources to promote the innovation of firms, to exploit synergies in key areas of S&T, to promote the growth of SMEs, and to contribute to the economic growth of Canadian communities. The government-appointed members of the NRC Council provide independent strategic direction and advice to the President and reviews organizational performance. The President provides leadership and strategic management and is responsible for the achievement of NRC's long-range goals and plans within the guidance of the NRC Council. Each of seven Vice Presidents is responsible for a portfolio of program activities composed of research institutes, initiatives, centres and/or a corporate branch. Beneath senior management, 26 Directors General and various committees are responsible for executing against plans and priorities to ensure successful achievement of objectives.

1.1.3 NRC Strategic Outcomes and 2011-12 Program Activity Architecture (PAA)

To fulfill its mandate, NRC's programs are aligned to achieve two Strategic Outcomes:

1. Advancements in innovative technologies and increased innovation capacity in targeted Canadian industries and national priority areas.
2. Canadians have access to research and development information and infrastructure.

NRC's program activities directly support these strategic outcomes. NRC's current PAA, shown below, illustrates how activities are organized to achieve these desired results.

NRC's current PAA has been crosswalked to the new NRC strategy and is aligned with Government of Canada's Strategic Outcomes and federal priorities. As such, no major changes are anticipated for the immediate future. As NRC's new strategy is implemented, the NRC PAA will be reviewed to ensure continued alignment and contribution towards Canada's Strategic Outcomes.

1.2 Planning Summary

1.2.1 Financial and Human Resources

For an explanation of the annual variation in spending, please refer to the discussion of the spending trend in the Expenditure Profile subsection.

1.2.2 Planning Summary by Strategic Outcome

1.2.3 Contribution of NRC Priorities to Strategic Outcomes

The Government of Canada (GoC) recognizes the far-reaching implications of innovation and that Canada can and must do more to turn ideas into solutions that will address substantial issues, such as rising health care costs and environmental sustainability to improve economic competitiveness. Innovation – the conversion of ideas and knowledge into commercially successful products and services – is a critical driver of increased productivity and domestic prosperity. In 2007, the Prime Minister announced Canada's S&T Strategy, Mobilizing Science and Technology to Canada's Advantage, in recognition of the importance of innovation performance in building a sustainable, vibrant society. Through this Strategy, Canada is committed to make impacts in four S&T priority areas: Environmental Science and Technologies; Natural Resources and Energy; Health and Related Life Sciences and Technologies; and Information and Communications Technologies (ICT).

Since that time, the GoC has increased its support for S&T in many areas including infrastructure, training and attracting talent, and supporting scientific excellence. As a result, Canada's scientists perform at world-class levels and Canada attracts some of the best and brightest minds in many fields, leading the G7 in R&D performed in the higher-education sector as a percentage of gross domestic product (GDP). Despite these successes, there remains room to improve Canadian performance in innovation.

Enhancing Canadian innovation and sustaining a place in the top 10 of global innovation producers is of great importance to the GoC. This will require coordinated and collaborative efforts from governments, private industry, not-for-profits, and academia, to bridge gaps and remove barriers within the innovation system. As part of this coordinated effort, NRC will play a pivotal role by developing and deploying technology in S&T priority areas, by helping industry to grow its competitive edge in the global marketplace, and by addressing challenges in substantial national issues.

The key to our future will be for Canada to differentiate, not imitate. In 2011-12, NRC will focus its plans and priorities on building Canadian strengths in areas where it can make a difference.

1.2.4 Risk Analysis

NRC's risk mitigation plan for 2011-12 will address the highest risks identified in the NRC Corporate Risk Profile (CRP). Specifically, key mitigation plans will focus on:

• Focusing on Outcomes and Impacts. NRC, NRC's clients, partners and collaborators face financial pressures in this time of economic uncertainty as we come out of the recent global recession. In response to this risk, NRC will be implementing specific initiatives for strengthened financial management and income generation strategies. In addition, the launch of NRC's new strategy will focus programs and activities on outcomes and impacts with specified targets to ensure that resources are used in a cost-effective and efficient manner, leading to longer-term financial sustainability. Business processes will be streamlined and/or augmented accordingly to support program plans while helping to address significant issues around workload capacity and organizational agility.
• Defining and Managing Change. As NRC embarks on a new strategy in 2011, its culture, behaviours and mindset, supporting structures, governance, and practices will need to be aligned for effective implementation. NRC will ensure that the necessary changes will be well defined with suitable plans in place to implement and manage those changes. Considerations for managing change will include review of and potential changes to business models, communication, governance, and individual and organizational competencies and capabilities. For example, organizational values were recently revised to reflect how employees, collectively, view today's NRC. The coming year will see initiatives in place to help employees across NRC live these values, which will be the foundation for successful change.
• Building Leadership, Engagement and Highly Qualified Personnel. It is becoming increasingly difficult to recruit high quality personnel (HQP) such as "star" scientists, while leadership succession and turnover rates suggest that essential leadership, management, and business skill sets and competencies risk being lost. In response to these risks, NRC will focus on building leadership capabilities and recruitment activities. Initiatives such as web-interactive online training tools and intensive, on-the-job leadership training through NRC's Leadership Enrichment and Development program support the development of NRC's current and future leaders, and provide opportunities for employees across NRC to build leadership management skills. NRC will also focus on enhancing and streamlining recruitment activities, resulting in specialized sourcing and recruitment expertise.

1.2.5 Expenditure Profile

NRC's forecast spending for 2010-11 is $900.7 million. Over the past three years (fiscal years 2007-08 to 2009-10), actual spending has averaged $820.0 million with Canada's Economic Action Plan (CEAP) and $773.3 million without CEAP. The planned spending for fiscal years 2011-12 to 2013-14, as indicated in the Spending Trend graph, reflects an overall decline in the budget. The decline is mainly due to the completion of initiatives funded under Canada's Economic Action Plan and the sun-setting of the Cluster Initiatives. The NRC will seek renewal of the Cluster Initiatives in March 2012 and until this is renewed, this item is not included in Planned Spending.

[D]

1.2.6 Estimates by Vote

For information on our organizational votes and/or statutory expenditures, please see the 2011-12 Main Estimates publication. An electronic version of the Main Estimates is available on Treasury Board Secretariat's web site.

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