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Minister of Industry's Message

Over the past year, the Canadian economy has proven to be resilient despite continued fiscal uncertainty in other parts of the world. Since our government introduced Canada's Economic Action Plan in 2009 to respond to the global recession, Canada has recovered not only all of the jobs lost during the recession but also all of our economic output.

As Minister of Industry, I am confident that the Industry Portfolio will play a key role in our government's plan to strengthen Canada's knowledge-based economy. Our efforts will focus on promoting innovation and modernizing Canada's marketplace policies, among other areas.

In 2012-13, the mandate and work of National Research Council Canada (NRC) will undergo a transformation. As a result, NRC will focus on business-led, industry-relevant research, driving increased productivity as well as sustainable economic growth and job creation. NRC will maintain its critical role in stimulating Canadian innovation and promoting the development of small and medium-sized businesses. It will achieve this by supporting clients and industry partners in commercializing technologies in areas of national importance, such as health care, climate change and natural resources.

A significant part of the Industry Portfolio's activities will involve developing Canada's digital economy by updating copyright and privacy laws and building a world-class digital infrastructure for next-generation wireless technologies and services. We will also put in place conditions that allow small businesses to grow and create jobs. This will mean reducing red tape, improving access to credit and focusing programs to promote more effective research and development.

Since coming to office, our government has made science and innovation a priority. We will leverage our past investments and continue to develop and recruit world-leading research talent. We will also take measures to encourage the private sector to increase research and development investments and improve commercialization outcomes.

In our government's pursuit to improve the well-being of Canadians, we will continue to work to secure the recovery, eliminate the deficit and invest in the drivers of long-term economic growth. We will also implement our plan to find savings in government expenditures to return to fiscal balance in the medium term.

This year's Report on Plans and Priorities for NRC delivers a comprehensive approach to promote and maintain Canada's strong and competitive economy. I look forward to working with my Cabinet and departmental colleagues, as well as with the private sector and other levels of government, to achieve our common goal of creating jobs and growth for all Canadians.

Minister of State's Message

As the Minister of State for Science and Technology, I am pleased to present the 2012-13 Report on Plans and Priorities for National Research Council Canada (NRC).

This year promises to be noteworthy, not only for Canada but also for the world. As economies across the globe begin to emerge from challenging economic times, Canada continues to thrive. Our financial system is strong, our economy has recovered all of the jobs and economic output lost during the recession, and our government has a low-tax plan that will continue to create jobs, economic growth and long-term prosperity across the country.

Our government recognizes the vital role that science and technology play in Canada's continued economic leadership. In this globalized and connected digital world, innovation will be the driver of economic growth. We understand this, and we are committed to supporting Canadian research and development (R&D) in both public and private sectors.

This year will see our government take specific actions to improve Canada's performance with respect to private sector R&D, following last year's report from the expert panel charged with the review of federal support for R&D. These actions will build on our investments to date and will seek to promote commercialization and the development of new products and services for Canadians.

Throughout its almost 100-year history, NRC has made significant contributions to the advancement of scientific knowledge and has been a key driver of Canada's leadership in research and innovation. In 2012-13, NRC will work to build on its past successes by increasing its focus on connecting ideas to the needs and opportunities present in the Canadian economy. With a more customer-focused business model and more business-like operations, NRC will be in a better position to help industry create the high-value jobs that Canadians want and that the economy needs. This will drive innovation, improve Canadian productivity and create economic growth for many years.

Canadians can and should be proud. Our government recognizes that we cannot take our success for granted. We must build on our past accomplishments in order to continue to grow, create jobs and lead the world for years to come. We are committed to achieving this, and it will be driven in no small part by science, research and innovation.

As we move into 2012-13, I will continue to work with our academic 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 optimizing results from its investments in science and technology to build a competitive, productive and growing economy for Canada. As Canada's national research and technology organization, the National Research Council is aligned with this commitment, having plans and priorities that focus on generating impacts for industry by increasing business enterprise expenditures on R&D, enhancing business productivity, and technology commercialization and job creation.

In 2012-13, we will focus our attention on changing our business model to be more market-driven, strengthen our approach to client relationship management and develop stronger collaborations with industry. Coupled with our contributions to industrial and innovation networks to accelerate technology commercialization, NRC will be well positioned to address the biggest innovation challenges in areas such as healthcare, the environment, energy, and information and communication technologies. Our focus: creating benefits for Canada.

NRC is proud to support Canada's Digital Economy through the NRC-IRAP implementation of a new Digital Technologies Adoption Pilot Program (DTAPP), on behalf of Industry Canada. Through DTAPP, small and medium enterprises (SMEs) will have access to an extensive network of innovation players, internationally recognized advisory services and funding sources to accelerate their adoption of digital technologies.

It is with pleasure that I present the NRC 2012-13 Report on Plans and Priorities. This will be an exciting year as we work to stimulate Canada's socio-economic prosperity.

Section I: Organizational Overview

Raison d'être

Responsibilities

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 science and technology (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 review organizational performance. The President provides leadership and strategic management and is responsible for the achievement of NRC's long-range goals and plans with the guidance of the NRC Council. Seven members of NRC's senior management team are responsible for activities comprised of research programs, initiatives and/or corporate services. Vice Presidents and NRC managers are responsible for executing against plans and priorities to ensure successful achievement of objectives for program activities.

NRC is in the midst of transitioning to a new strategy that forms the basis of plans and priorities for 2012-13. These priorities will focus on the way NRC determines and conducts its business, placing emphasis on changing business models and client relationship management to be more market-driven and more in tune with the needs of industry. NRC's strategic intent is founded upon a vision and mission designed to support federal S&T priorities.

NRC's success will be demonstrated 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 its clients:

• Increased business enterprise expenditures on R&D;
• Enhanced productivity;
• Technology commercialization; and
• Job creation.

Strategic Outcomes and Program Activity Architecture (PAA)

To fulfill its mandate, NRC programs are focused to achieve two Strategic Outcomes:

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 NRC's new strategy is implemented, the NRC PAA will be reviewed, and amended as necessary, to ensure continued alignment and contribution towards Canada's Strategic Outcomes.

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Organizational Priorities

Through Canada's S&T Strategy, Mobilizing Science and Technology to Canada's Advantage, the Government of Canada (GoC) identified an overarching goal of creating an innovation-driven environment that allows Canadian businesses and researchers to succeed in globalized markets. Canada is committed to impacting 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). Enhanced Canadian innovation, with the goal of becoming a top global innovation producer, is of great importance to the GoC. This requires coordinated and collaborative efforts from all levels of government, private industry, academia and not-for-profits to overcome gaps and eliminate barriers in the innovation system. NRC plays a crucial role in these concerted initiatives by developing and deploying technology in S&T priority areas, by helping industry grow its competitive edge in the world market, and by addressing challenges in substantial national issues. In 2012-13, NRC will focus its plans and priorities on building upon Canadian successes and capacities in areas where it can make a difference.

Priority 1	Type	Strategic Outcome(s)
Cultivate business innovation to increase the productivity of Canada's industrial sectors and to support the economic growth and development of communities across Canada.	Ongoing	SO1
Description
Why is this a priority? Canada's global competitiveness is currently lagging relative to established and emerging competitor nations, creating a challenge for long-term, sustainable productivity and prosperity. In its 2011 analysis of global competitiveness, the World Economic Forum ranked Canada 12th out of 142 nations, down from a ranking of 10 in 2010.1 Canadian businesses that focus on R&D and technological achievement create high-quality, knowledge-intensive jobs. Plans for meeting the priority NRC will provide targeted R&D support and technical services to high-impact Canadian industry including the ICT, automotive, aerospace and construction sectors. In addition, NRC will continue advancing emerging technologies of increasing prominence in Canada and globally, such as green technologies for the manufacturing sector, smart buildings, and nanotechnology applications. NRC has developed a stream of focused, national-scale research initiatives that will have sufficient critical mass to deliver high impacts for Canada and demonstrate the capacity of NRC to make a real, measurable difference to domestic prosperity. Four such initiatives will become operational in 2012-13: Printable Electronics, Canadian Wheat Improvement, Industrial Biomaterials and Algal Carbon Conversion. NRC's Industrial Research Assistance Program (NRC-IRAP) will continue to help commercialization of technologies by Canadian SMEs through the provision of advisory and funding support. One initiative of priority is DTAPP which will accelerate the adoption of digital technologies by SMEs. NRC will continue to support industry and innovation capacity built through its activities with a focus on facilitating networks between and among industry and innovation players, like universities and other government departments, to accelerate the commercialization of products and processes in key technology areas such as medical devices and photonics.

Priority 2	Type	Strategic Outcome(s)
Enhance the generation and commercialization of knowledge in Canada by providing integrated scientific support and infrastructure.	Ongoing	SO2
Description
Why is this a priority? NRC has a uniquely integrated, multidisciplinary approach, with identified opportunities where it can collaborate with contributors to the innovation system to enhance Canada's capacity to generate new knowledge and translate it into real economic value. Plans for meeting the priority NRC will continue to provide Canadians with access to an array of facilities, programs, and technology platforms designed to allow them to conduct leading-edge research, as well as to enable industry to commercialize technology innovations.

Priority 3	Type	Strategic Outcome(s)
Strengthen the NRC business management model to deliver on expected results.	Ongoing	SO1 and SO2
Description
Why is this a priority? Changes to NRC's business model are designed to ensure that relevant management practices are in place to achieve goals that will contribute to industry needs and federal S&T priorities. Plans for meeting the priority NRC will complete the transition to a program-based management model designed to meet the needs identified by industry. NRC research programs will be multi-disciplinary, market-oriented and collaborative, built around a sound understanding of industry value chains, with clear technology development paths. NRC will enhance relationships through a number of client management initiatives, such as targeted promotional activities, key account management practices and implementation of a Client Relationship Management system. NRC will contribute to the fulfillment of Canadian priorities with targeted international economies by building valuable relationships under Canada's S&T Agreements with other countries.

Priority 4	Type	Strategic Outcome(s)
Ensure effective and efficient resource management for a sustainable organization.	Ongoing	SO1 and SO2
Description
Why is this a priority? Resource management effectiveness is critical to ensuring Canadian research initiatives produce new practical technologies and outcomes while maintaining low delivery costs. NRC must be a sustainable and responsive national research and technology organization in order to achieve its strategic outcomes. Plans for meeting the priority NRC will focus on human resource initiatives that attract and engage talent, plan for succession, and ensure effective management and decision-making. NRC will focus on financial and management initiatives to strengthen decision-making and operational efficiencies, and to establish long-term measures for sustainability. NRC will focus on transitioning Information Technology (IT) service delivery to the Shared Services Canada model. This change is expected to provide efficient and effective IT services at a lower cost.

Risk Analysis

NRC's corporate risk management initiatives for 2012-13 address the organization's highest assessed corporate risks, and centre upon three key themes identified in the Corporate Risk Profile (CRP): Transition, Engagement & Communications, and Operations. Identified medium and low risks will be monitored and tracked over the year, with relevant initiatives undertaken to manage the risks, as guided by the CRP.

Transition: To enable implementation of its new strategy, NRC is currently undergoing an important transformation – transitioning from an institute-oriented to a program-based management model. This new business model will entail changes in internal processes, structures and culture to achieve closer alignment with industry needs. These changes include implementing: a new financial model, new approaches for developing and managing industry-focused research initiatives and projects, a new staff performance management system, a new client relationship management system and a client engagement strategy. Effectively managing these significant and complex changes will be key to addressing NRC's highest risk identified. To this end, a transition plan is under development to support the coordination and management of the changes, including critical dependencies and associated risks. Leads have been designated in each area of transition to manage the related changes.

Engagement & Communication: During the period of transition, high risks have been identified around effective engagement and communications both internally (to sustain staff engagement, manage workloads and maintain productivity) and externally (client relationship management and engagement). External risk factors such as the impact of government initiatives (e.g., the Federal R&D Review and Shared Services Canada) and their impact on NRC, its external collaborators and clients, will force greater prioritization and focus of activities – success of which will be aided by stronger engagement and communications. NRC will take a multi-initiative approach to address these risks in 2012-13 by: implementing an employee engagement plan and communications strategy; implementing a new client relationship management system and associated policy on client information management; and developing and implementing a client engagement strategy and communications.

Operations: While it can be expected that productivity may temporarily decline during major transition periods, NRC seeks to manage this risk by focusing on critical operational requirements to lessen impact on productivity. High risks identified in the CRP include transition to the new systems and processes identified earlier, and maintaining security of NRC and client/partner resources (physical, information and information technology) in light of increased interactions with industry and increases in cyber attacks. Risk management initiatives include: defining and scoping managers' roles and responsibilities in the new operational structure; implementing a resource tracking/utilization system to support portfolio and project management activities; developing and delivering relevant training for managers required for new organizational processes and operations; and ensuring effective business continuity planning.

Planning Summary

Financial Resources ($ millions)

2012-13	2013-14	2014-15
700.5	727.82	713.33

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

Human Resources (Full-Time Equivalent (FTEs)⁴)

2012-13	2013-14	2014-15
3,688	3,688	3,688

Strategic Outcome 1: Advancements in the development and deployment of innovative technologies in targeted Canadian industries and national priority areas in support of federal priorities in innovation and science and technology

Performance Indicators	Targets
Total annual sales of NRC clients attributable to NRC S&T activities	$6.65 billion by March 20175
Amount of BERD (Business Expenditures in R&D) conducted annually by NRC clients attributable to NRC activities in S&T	$800 million by March 2017
Total R&D Fulltime Equivalents (FTEs) employed annually by NRC clients attributable to NRC S&T activities	6,500 by March 2017

Planning Summary Table
($ millions)

Program Activity	Forecast Spending 2011-12	Planned Spending6			Alignment to Government of Canada Outcomes
		2012-13	2013-14	2014-15
Manufacturing Technologies	115.4	120.7	130.3	139.7	Strong Economic Growth
ICT and Emerging Technologies	68.1	44.87	47.8	50.7	Strong Economic Growth
Industrial Research Assistance	146.2	162.68	164.2	135.2	Strong Economic Growth
Health and Life Science Technologies	102.9	107.5	113.6	110.6	Healthy Canadians
Energy and Environmental Technologies	31.5	27.9	29.8	31.7	Clean and Healthy Environment
Total Planned Spending		463.5	485.79	467.910

Strategic Outcome 2: Canadians have access to research and development information and infrastructure

Performance Indicators	Targets
Proportion of surveyed S&T infrastructure users who report positively on the value of the NRC infrastructure used	85% by March 2013

Planning Summary Table
($ millions)

Program Activity	Forecast Spending 2011-12	Planned Spending			Alignment to Government of Canada Outcomes
		2012-13	2013-14	2014-15
National Science and Technology Infrastructure	94.1	98.9	101.1	103.6	Innovative and Knowledge-Based Economy
Scientific, Technical and Medical Information	18.5	18.7	18.9	18.9	Innovative and Knowledge-Based Economy
Total Planned Spending		117.6	120.0	122.5

Internal Services

Planning Summary Table
($ millions)

Program Activity	Forecast Spending 2011-12	Planned Spending
		2012-13	2013-14	2014-15
Internal Services	127.1	119.4	122.1	122.9
Total Planned Spending		119.411	122.1	122.9

Expenditure Profile

NRC's forecast spending for 2011-12 is $703.8 million. Over the past three years (fiscal years 2008-09 to 2010-11), actual spending has averaged $864.1 million with Canada's Economic Action Plan (CEAP) and $766.6 million without CEAP. The spending for fiscal years 2010-11 to 2011-12, as indicated in the Spending Trend graph, reflects an overall decline in the budget, mainly due to the completion of initiatives funded under Canada's Economic Action Plan and the sunsetting of the Cluster Initiatives.

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Estimates by Vote

For information on our organizational appropriations, please see the 2012-13 Main Estimates publication.

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