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Section I – Overview of the Agency

Minister’s Message

As Minister of Industry, I am committed to the long-term competitiveness and prosperity of our country. Canada has many economic advantages upon which we must continue to build if we are to set the right conditions for our long-term success. With this in mind, Industry Canada and its Portfolio partners are striving toward the development of an innovative economy with robust sectors and an efficient and competitive marketplace.

Our priorities remain aligned with Advantage Canada, the government’s long-term economic plan. Here, we set out clear objectives, including the reduction of taxes, the encouragement of entrepreneurship, and the development of a knowledge-based economy.

In the 2009–2010 Report on Plans and Priorities, we recognize that as we look to the year ahead we are entering a period of continued global economic uncertainty, one that demands clear and strategic action on the part of the government to ensure we accomplish the long-term goals we have set for ourselves. Our departmental priorities and initiatives will be guided by a balanced consideration of the demands of the global economic situation and our long-term vision for Canada’s growth and prosperity.

In Budget 2009 — Canada’s Economic Action Plan, the government has developed a clear and comprehensive response to the slowdown in the global economy, which is in keeping with the continuing objectives of Advantage Canada. The economic action plan addresses short-term realities, while setting in place the conditions to strengthen Canada’s economy for generations to come.

Industry Canada and its Portfolio partners are at the heart of the government’s strategy to stimulate the Canadian economy. We are taking steps to improve the competitiveness of Canada’s traditional economy by providing short-term support for key sectors such as the auto industry. We are ensuring that all regions of Canada prosper by supporting economic diversification. We are fostering small businesses by improving access to credit and encouraging growth through tax reductions and incentives. We are supporting measures to develop a highly skilled workforce through such means as expanding the Canada Graduate Scholarships program. At this time of intense international competition for the world’s best and brightest, government support is helping to attract and retain these individuals in Canada. We are positioning Canada as a leader in the global knowledge economy.

In the ongoing pursuit of our mandate, we will continue to focus on innovation as a means to develop a globally competitive economy. Our ultimate goal is to help Canadians continue to enjoy a quality of life that is envied throughout the world.

It is my pleasure to present this year’s Report on Plans and Priorities for Industry Canada and its Portfolio partners, which will outline in greater detail the priorities and pursuits in which we will be engaged in the year to come.

Management Representation Statement

I submit for tabling in Parliament, the 2009-10 Report on Plans and Priorities (RPP) for the Natural Sciences and Engineering Research Council (NSERC).

This document which has been prepared based on the reporting principles contained in the Guide to the Preparation of Part III of the Estimates – Reports Tabled in Parliament in 2009:

• adheres to the specific reporting requirements outlined in the Treasury Board of Canada Secretariat guidance;
• is based on the agency’s strategic outcomes and Program Activity Architecture that were approved by the Treasury Board;
• presents consistent, comprehensive, balanced and reliable information;
• provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
• reports finances based on approved planned spending numbers from the Treasury Board of Canada Secretariat.

Suzanne Fortier
President, NSERC

Raison d’être

The Natural Sciences and Engineering Research Council of Canada (NSERC) is a key instrument of Canada’s federal government to make Canada a country of discoverers and innovators for the benefit of all Canadians. NSERC reaches this vision by investing in people, discovery and innovation through programs that support post-secondary research in the natural sciences and engineering (NSE) based on national peer-reviewed competitions, and through partnerships of universities and colleges with the private sector. NSERC also supports the training of the next generation of talented scientists and engineers.

Responsibilities

NSERC is a departmental corporation of the Government of Canada 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 2009-10, NSERC will invest just over $1 billion in post-secondary research and training in the NSE. NSERC’s budget represents 10 per cent of the federal government’s expenditures for science and technology (S&T), and 18 per cent of all university research and development (R&D) funding in the NSE.

NSERC Quick Facts: 2009-10
President:	Dr. Suzanne Fortier
Chair:	The Honourable James Edwards
Budget:	Approximately $1 billion
Head Office:	Ottawa, ON
Regional Offices*:	Moncton, NB Montreal, QC Winnipeg, MB Vancouver, BC
Employees:	357 Full-time Equivalents
Reach:	26,500 students and postdoctoral fellows 11,800 university professors 1,400 Canadian companies over 90 universities and colleges
* NSERC plans to open a fifth regional office in Ontario in 2009.

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 Organizational and Governance Structure

Strategic Outcomes

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

• People: Highly skilled science and engineering professionals in Canada – Building our human capital in the natural sciences and engineering by attracting and developing highly skilled science and engineering professionals.
• Discovery: High quality Canadian-based competitive research in the natural sciences and engineering – Unleashing the power of our researchers to create knowledge and opportunities.
• Innovation: Productive use of new knowledge in the natural sciences and engineering – Seizing strategic opportunities for our country and realizing the benefits of research in industry and society.

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. Virtually all of NSERC’s funding relates to these advantages.

Program Activity Architecture

	1.0 People	2.0 Discovery	3.0 Innovation
Strategic Outcomes	Highly skilled science and engineering professionals in Canada	High quality Canadian based competitive research in the natural sciences and engineering	Productive use of new knowledge in the natural sciences and engineering
Activities	1.1 Promote Science and Engineering 1.2 Support Students and Fellows 1.3 Attract and Retain Faculty	2.1 Fund Basic Research 2.2 Support for Research Equipment and Major Resources	3.1 Fund Research in Strategic Areas 3.2 Fund University-Industry-Government Partnerships 3.3 Support Commercialization
Programs	1.1.1 PromoScience 1.1.2 Centres for Research in Youth, Science Teaching and Learning 1.1.3 Prizes 1.2.1 Undergraduate Student Research Awards 1.2.2 NSERC Postgraduate Scholarships 1.2.3 Alexander Graham Bell Canada Graduate Scholarships * 1.2.4 Postdoctoral Fellowships 1.2.5 Industrial Research and Development Fellowships 1.2.6 Industrial Research and Development Internships * 1.2.7 Collaborative Research and Training Experience 1.3.1 Canada Research Chairs * 1.3.2 Industrial Research Chairs 1.3.3 Chairs in Targeted Areas of Research 1.3.4 University Faculty Awards	2.1.1 Discovery Grants 2.1.2 Special Research Opportunity Grants 2.1.3 General Support 2.2.1 Research Tools and Instruments 2.2.2 Major Resources Support Grants 2.2.3 Research Capacity Development in Small Universities	3.1.1 Strategic Partnerships 3.1.2 Collaborative Health Research Projects * 3.2.1 Collaborative Research and Development Grants 3.2.2 Research Partnership Agreements 3.2.3 Networks of Centres of Excellence * + 3.3.1 Intellectual Property Mobilization * 3.3.2 Idea to Innovation Program 3.3.3 College and Community Innovation Program * 3.3.4 Centres of Excellence for Commercialization and Research *

* Programs involving two or more of the federal research granting agencies (NSERC, Canadian Institutes of Health Research [CIHR], Canada Foundation for Innovation [CFI], Social Sciences and Humanities Research Council [SSHRC])

+ The new Business-Led Networks of Centres of Excellence (BL-NCE) are included in this activity.

Program Activity Architecture Crosswalk

Modifications to NSERC’s Program Activity Architecture (PAA) were approved by the Treasury Board Secretariat in July 2008. Changes reflect recent program evolution and better classify programs according to their primary objective. The updated PAA is consistent with the way NSERC manages its programs and allocates resources to achieve expected results.

Summary of changes:

1. The Industrial Research and Development Internships (IRDI) Program was moved from Program Activity (PA) 3.2 (Fund University-Industry-Government Partnerships) to PA 1.2 (Support Students and Fellows). This amendment better represents the expected result of the IRDI program in which opportunities are created for skilled graduates to gain experience in industry.
2. The Centres of Excellence for Commercialization and Research (CECR) Program was moved from PA 3.2 (Fund University-Industry-Government Partnerships) to PA 3.3 (Support Commercialization). The program’s name and objectives best align with the expected results of PA 3.3: “The transfer of knowledge and technology residing in Canadian universities and colleges to the user sector is facilitated.”

Redistribution of financial resources following modification of PAA

($ millions)		New Program Activity 2009-10
		PA 1.2 Support Students and Fellows	PA 3.3 Support Commercialization	Total
Old Program Activity	PA 3.2 Fund University-Industry-Government Partnerships	$4.38	$19.12	$23.50

Amounts represent the sum of the forecast spending for 2008-09 and the planned investment for the three-year reporting period (2009-12).

Planning Summary¹

Financial Resources ($ millions)

2009-10	2010-11	2011-12
$1,039.88	$1,022.76	$1,024.29

Human Resources (Full-Time Equivalent – FTEs)

2009-10	2010-11	2011-12
357	357	357

Strategic Outcome 1.0: People – Highly skilled science and engineering professionals in Canada

Performance Indicators	Targets
Total researchers per thousand employed relative to other Organization for Economic Cooperation and Development (OECD) countries	Maintain top 10 world ranking (Canada was 8th in 2005)

Program Activity2 ($millions)	Forecast Spending 2008-09	Planned Spending			Alignment to Government of Canada Outcomes
		2009-10	2010-11	2011-12
1.1 Promote Science and Engineering	$6.30	$6.58	$5.65	$5.53	Innovative and Knowledge-based Economy
1.2 Support Students and Fellows	$157.54	$152.20	$155.14	$158.72	Innovative and Knowledge-based Economy
1.3 Attract and Retain Faculty	$169.01	$167.24	$166.02	$166.02	Innovative and Knowledge-based Economy
Total Planned Spending for SO 1.0		$326.02	$326.81	$330.27

¹ This report does not include information from Budget 2009. Budget 2009 information will be included in subsequent reports of the Estimates.
² For program activity descriptions, please access the Main Estimates online at http://www.tbs-sct.gc.ca/est-pre/estime.asp

Strategic Outcome 2.0: Discovery – High quality Canadian-based competitive research in the natural sciences and engineering

Performance Indicators	Targets
Average number of times that Canadian papers in the NSE are cited by other researchers (Average Relative Citation factor of Canadian publications in the NSE – comparison with other countries)	Maintain top 10 world ranking (currently Canada is 7th)

Program Activity ($millions)	Forecast Spending 2008-09	Planned Spending			Alignment to Government of Canada Outcomes
		2009-10	2010-11	2011-12
2.1 Fund Basic Research¥	$380.67	$366.82	$364.40	$360.40	Innovative and Knowledge-based Economy
2.2 Support for Research Equipment and Major Resources	$54.27	$46.36	$44.38	$46.41	Innovative and Knowledge-based Economy
Total Planned Spending for SO 2.0		$413.18	$408.78	$406.81

¥ The decrease in planned spending for PA 2.1 is a result of the phasing out of special funding for International Polar Year.

Strategic Outcome 3.0: Innovation – Productive use of new knowledge in the natural sciences and engineering

Performance Indicators	Targets
Percentage growth in the number of partner companies annually	Greater than 5%

Program Activity ($millions)	Forecast Spending 2008-09	Planned Spending			Alignment to Government of Canada Outcomes
		2009-10	2010-11	2011-12
3.1 Fund Research in Strategic Areas	$116.45	$124.10	$133.75	$135.38	Innovative and Knowledge-based Economy
3.2 Fund University-Industry-Government Partnerships	$131.49	$109.29	$105.67	$104.08	Innovative and Knowledge-based Economy
3.3 Support Commercialization	$14.38	$46.38	$26.84	$26.84	Innovative and Knowledge-based Economy
Total Planned Spending for SO 3.0		$279.77	$266.26	$266.30

Program Activity ($millions)	Forecast Spending 2008-09	Planned Spending			Alignment to Government of Canada Outcomes
		2009-10	2010-11	2011-12
4.1 Internal Services ‡	$0.00	$25.91	$25.91	$25.91	Innovative and Knowledge-based Economy
‡ Internal Services include activities and resources that apply across NSERC. These do not include activities and resources provided for specific programs. See Section II, Strategic Outcome for Internal Services.
Total Planned Spending		$1,044.88	$1,027.76	$1,029.29	Innovative and Knowledge-based Economy

Contribution of Priorities to Strategic Outcomes

Operational Priorities
Priority 1. People Advantage: Inspire new generations of students to pursue careers in science and engineering, and provide them with the means to develop their full potential.
Type	Ongoing	Link to Strategic Outcomes	1.0 People
Why this is a priority: To build the future pipeline of domestic post-secondary students by ensuring that Canadian youth are exposed to activities that capture their imagination and generate curiosity and excitement about science, mathematics and technology; To ensure Canada has a supply of highly qualified personnel (HQP) by supporting university students and fellows during their training in research and by providing them with opportunities to develop additional skills and to experience enriched and varied research environments; and To position Canada as a destination of choice for top foreign students and researchers. Plans for meeting the priority Enable more students to gain research experience in industry while undertaking advanced studies in Canada; (Ongoing with new elements) Launch the Collaborative Research and Training Experience (CREATE) program to encourage collaborative and integrative approaches, address significant scientific challenges associated to Canada’s research priorities, and facilitate the transition of new researchers from trainees to productive employees in the Canadian workforce; and (New) Launch the Vanier Canada Graduate Scholarship (CGS) and the CGS Michael Smith Foreign Study Supplements programs and review NSERC’s suite of scholarships and fellowship programs to ensure optimal results in relation to the evolving environment. (New)
Priority 2. Knowledge Advantage: Fuel the advancement of knowledge in science and engineering and ensure that Canadian scientists and engineers can be leaders and key players in a global knowledge economy.
Type	Ongoing	Link to Strategic Outcomes	1.0 People
Why this is a priority: To ensure that Canada develops and maintains the people and infrastructure to conduct world-class research in the broad areas of NSE; To encourage creativity and research at the leading edge of world knowledge; and To capitalize on benefits arising from Canadians leading or participating in international collaborations. Plans for meeting the priority Enable new faculty with high research potential to firmly launch their research programs and demonstrate their capabilities as competitive contributors to Canada’s research, research training and innovation base; Expand the Discovery Accelerator Supplement (DAS) program to fund the research activities of established academic scientists/engineers to accelerate progress and maximize impact, particularly in the priority areas identified in the Federal S&T Strategy; and Adopt peer review structures and processes that ensure flexibility and continuously adapt to the changing research environment following the recommendations of the International Review of the Discovery Grant Program and the Grant Selection Committee Structure Review. (New)
Priority 3. Entrepreneurial Advantage: Connect and apply the strength of the academic research system to addressing the opportunities and challenges of building prosperity for Canada.
Type	Ongoing	Link to Strategic Outcomes	3.0 Innovation
Why this is a priority: To stimulate innovation in the Canadian economy by creating partnerships between the academic research community and the user sector and enabling knowledge and technology transfer; To address Canadian priorities and challenges by increasing research in targeted areas of strategic importance to Canada and to increase national and international connections in these areas; and To build prosperity in Canada by helping to create a vibrant knowledge-based economy. Plans for meeting the priority Implement the industry-driven strategies addressed in Budget 2008 aimed at the following sectors: automotive, manufacturing, forestry, and fisheries; explore means to increase and sustain existing partnerships across all sectors during the current economic situation; (New) Expand the National Research Council (NRC)-NSERC-Business Development Bank of Canada (BDC) partnership to accelerate commercialization of publicly funded research; Continue to increase the number of partnerships in priority areas identified in the Federal S&T Strategy: environment, energy, information and communication technology (ICT); Develop an NSERC Strategy for Partnership and Innovation; (New) Review NSERC’s intellectual property policy to remove any barriers to commercialization of research and to facilitate research agreements; and (New) Assess the need for a Pre-Collaborative Research and Development (Pre-CRD) grant pilot program to increase the number of university-industry interactions and partnerships. (New)

Management Priorities
Priority 4. Demonstrate NSERC’s accountability and how the results of its investments in Canadian research and training benefit Canadians.
Type	Previously committed to	Links to Strategic Outcomes	1.0 People
			2.0 Discovery
			3.0 Innovation
Why this is a priority: To demonstrate accountability and stewardship in the management of Canada’s investments in S&T; To increase effectiveness and client service; and To measure the results and impacts of the government’s investments. Plans for meeting the priority Meet the commitments of the federal S&T Strategy related to governance, accountability and value for money; Ensure compliance with all new policies and frameworks (i.e. Internal Audit, Evaluation, Management Accountability Framework [MAF]); Reduce paper-based processes and harmonise business solutions (i.e.Enterprise Award Management System [EAMS] and Canadian Common CV [CCV]); With the SSHRC and CIHR, develop an action plan to revise the Tri-Council Policy Statement: Integrity in Research and Scholarship (TCPS-I); (New) With SSHRC and CIHR, finalize, approve and release the second edition of the Tri-Council Policy Statement: Ethical Conduct for Research Involving Humans (TCPS-E); (New) Enhance capacity and stay at the forefront of the field of performance measurement for S&T investments; and With CIHR, SSHRC and CFI, work to improve reporting and integrated measurement of results and impacts of investments in post-secondary research and advanced training. (New)
Priority 5. Increase visibility of Canadian research
Type	Previously committed to	Links to Strategic Outcomes	1.0 People
			2.0 Discovery
			3.0 Innovation
Why this is a priority: To spur Canadian public interest in NSE to inspire participation in S&T. Plans for meeting the priority Develop new outreach mechanisms and tools to target new audiences and demonstrate the benefits and results from Canadian research; and (New) Increase Canada’s awareness of research achievements by leveraging existing relationships with core audiences though the NSERC regional offices, former NSERC Council members, former NSERC prize winners and journalists, to ensure that audiences are reached at national, regional and local levels. (Previously committed to, with new elements)

Risk Analysis

NSERC’s operational and management priorities are ongoing and are monitored according to NSERC’s integrated Results-based Management and Accountability Framework (RMAF) and Risk-based Audit Framework (RBAF). In the development of the RMAF-RBAF, 16 different types of risks were identified and three risks are considered significant. These 3 significant risks which may impact NSERC’s plans and priorities over the reporting period are summarized below:

Risk	Mitigation
Ability to remain relevant and make and implement strategic decisions that align with evolving context	NSERC ensures the relevance of its activities and investments by aligning very closely with the priorities of the Federal S&T Strategy. NSERC actively consults stakeholders through various governance and advisory committees. NSERC conducts surveys and consultations to keep abreast of issues, opportunities and challenges.
Ability to ensure optimal funding decisions and to maintain control and accountability over expenditures.	NSERC funding decisions are informed by a rigorous peer review process to foster excellence and ensure that the research supported is gauged against the highest international standards. The blue-ribbon committee that conducted the International Review of the Discovery Grants Program concluded that the program “is an unusually effective and efficient method of research support, particularly in the Canadian context.” NSERC, together with SSHRC and CIHR, have a Memorandum of Understanding with the institutions that administer funds from the federal granting agencies on behalf of researchers, to ensure that the funds entrusted to NSERC are well managed and are used effectively, economically and in the best interest of the research supported by the award.
Ability to ensure integrity in research.	NSERC grant recipients must abide by the Tri-Council Policy Statement: Integrity in Research and Scholarship which provides a formal process to investigate possible breaches of scientific integrity brought to NSERC’s attention. NSERC, together with SSHRC and Association of Universities and Colleges of Canada (AUCC), recently conducted a review of this policy framework and process, and identified improvements that can be made. NSERC will be implementing these changes over the coming two years.

In addition, NSERC experiences risk related to the current circumstances that is integral to all of its programs and that could influence the plans, priorities, performance and decision making over the 3-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.

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 2009-10 fiscal year, NSERC plans to spend $1,028.9 million to meet the expected results of its program activities and contribute to its strategic outcomes.

In 2008, NSERC conducted an in-depth review of the funding, relevance and performance of all its programs to ensure results and value for money from programs that are a priority for Canadians. The conclusions of this Strategic Review were submitted to the Treasury Board in autumn 2008. The results of this review will be reflected in future reporting to Parliament.

The figure below illustrates NSERC’s spending trend from 2006-07 to 2011-12.

For the 2006-07 to 2007-08 periods, the total spending are the total authorities dispersed as reflected in the Public Accounts. For the 2008-09 period the forecast spending amounts indicated on the graph include all Parliamentary appropriations: Main Estimates, Supplementary Estimates, and carry-forward adjustment. For the 2009-10 to 2011-12 periods, the planned spending includes the figures from the 2009-10 Annual Reference Levels Update (ARLU) plus the anticipated funding being requested via the supplementary estimates.

Since 2006-07, NSERC’s core spending has increased primarily due to $43 million received in Budget 2007, including the $6 million received for the Canada Graduate Scholarships program, and an additional $34 million received in Budget 2008.

In addition to these core funding increases NSERC also received non-cumulative funding for the Centres of Excellence for Commercialization and Research (CECR) program in the amounts of $57.2 million and $19.1 million for the years 2007-08 and 2008-09, respectively. The Business Led Networks of Centres of Excellence program received non-cumulative funding in the amounts of $7.0 million in 2008-09, $7.4 million in 2009-10 and $8.4 million in 2010-11 and 2011-12.

Voted and Statutory Items displayed in the Main Estimates

Voted and Statutory Items displayed in the Main Estimates
($ millions)

Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2009-2010 Main Estimates	2008-2009 Main Estimates
65	Operating expenditures	$41.39	$40.65
70	Grants	$922.91	$913.43
(S)	Contributions to employee benefit plans	$4.10	$4.13
Total for Agency		$968.40	$958.21

NSERC’s administration costs are approximately five per cent of its total budget, which 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 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.

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