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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. 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, National Research Council Canada (NRC) will play a critical role in sustaining the innovation activity of small and medium-sized businesses. NRC's aim is to bring timely solutions to market in areas of national importance: clean energy, health and wellness, and the environment. NRC will continue to partner with Canadian firms to deliver tangible, market-oriented results in high-impact and emerging industry sectors, such as the automotive sector.

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 National Research Council

President's Message

The National Research Council (NRC) is the Government of Canada's premier organization for science, technology and innovation, and a key player in the development of Canada's science and technology (S&T) infrastructure. Through its unique multidisciplinary R&D, integrated S&T solutions to market, industry support, and technology commercialization, NRC is a substantial contributor to the improvement of the social and economic well-being of all Canadians.

As Canada's largest federal research body, NRC is a critical contributor to the federal S&T Strategy. NRC focuses its research and competencies on addressing three national priority areas – health and wellness, sustainable energy, and the environment – as well as in key sectors of the economy where NRC can make the most significant contribution for Canadians.

NRC creates value for Canada by transferring technology and knowledge to industry, championing regional technology clusters, securing access to global research networks and facilities, and enhancing opportunities for Canadian firms and technology products at home and abroad. Canadian companies and communities from coast-to-coast benefit from NRC's research excellence, state-of-the-art laboratories and commercialization capacity.

It is with pleasure and pride that I present our 2010-2011 Report on Plans and Priorities. NRC's unique assets – multidisciplinary expertise, strong regional presence, and emerging innovative partnership models – will make a strong contribution to Canada's economic growth for years to come.

Section I – Overview

1.1 Summary Information

1.1.1 Raison d'être

1.1.2 NRC Mandate

Under the National Research Council Act, NRC's authorities include:

• Undertaking, assisting or promoting scientific and industrial research in fields of importance to Canada;
• Establishing, operating and maintaining a national science library;
• Publishing and selling or otherwise distributing such scientific and technical information as the Council deems necessary;
• Investigating standards and methods of measurement;
• Working on the standardization and certification of scientific and technical apparatus and instruments and materials used or usable by Canadian industry;
• Operating and administering any astronomical observatories established or maintained by the Government of Canada;
• Administering NRC's research and development activities, including grants and contributions used to support a number of international activities; and
• Providing vital scientific and technological services to the research and industrial communities.

1.1.3 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 small and medium-sized firms (SMEs), and to contribute to the economic growth of Canadian communities. The NRC Council provides 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 six Vice Presidents is responsible for a portfolio of Program Activities composed of research institutes, initiatives, centres and/or a corporate branch. Beneath senior management, 24 Directors General and various committees are responsible for executing against plans and priorities to ensure successful achievement of objectives.

1.1.4 NRC Strategic Outcomes and 2010-11 Program Activity Architecture (PAA)

NRC's aim is to create a sustainable advantage for Canadians through S&T leadership, which will contribute to improved economic competitiveness and social betterment for our nation. Through synergistic and complementary relationships with industry, government and academia, NRC works to align the strengths and critical mass required to achieve four of Canada's Strategic Outcomes: Strong economic growth; healthy Canadians; a clean and healthy environment; and an innovative and knowledge-based economy. NRC's Program Activities directly support the delivery of NRC's Strategic Outcomes, which in turn, are aligned to deliver against the above mentioned federal commitments. To better reflect this alignment, NRC's PAA was revised to highlight our pursuit to translate discoveries into technology-driven products and services to help Canadian industry be more competitive in the global marketplace and to address enduring challenges in substantial national and global issues. The approved 2010-11 NRC PAA structure, shown below, represents how activities are organized to achieve these desired results.

NRC's 2010-11 PAA

Canadian Strategic Outcome	NRC Strategic Outcome	NRC Program Activity1	NRC Sub-Activity
Strong Economic Growth	Advancements in innovative technologies and increased innovation capacity in targeted Canadian industries and national priority areas	Manufacturing Technologies	Aerospace Research Construction Research and Support Manufacturing and Materials Research Surface Transportation Technology
		Information and Communications Technologies and Emerging Technologies	Semiconductor Based Technology Research Information Technology Research Nanotechnology Research Molecular Sciences Research
		Industrial Research Assistance
Healthy Canadians		Health and Life Science Technologies	Health and Environmental Biotechnology Research Age-Related and Infectious Disease Research Medical Diagnostic Technology Research Marine Biosciences and Nutrisciences Research Plant Biotechnology Research Genomics and Health Technology
Clean and Healthy Environment		Energy and Environmental Technologies	Ocean Technology Research Sustainable Energy Technologies and Environmental Monitoring Research Fuel Cells Technology Research Hydraulics Technology Research
Innovative and Knowledge-Based Economy	Canadians have access to research and development information and infrastructure	National Science and Technology Infrastructure	National Measurement Standards Canadian Astronomical Observatories Facility for Sub-Atomic Research TRIUMF Canadian Neutron Beam Centre
		Scientific, Technical and Medical Information

¹ Internal Services not shown

The table below represents a crosswalk between NRC's 2009-10 and 2010-11 PAAs.

Crosswalk between NRC's 2009-10 PAA and 2010-11 PAA²

2010-2011 Net Planned Spending3 ($ millions)
2010-11 PAA	Manufacturing Technologies	ICT and Emerging Technologies	Industrial Research Assistance	Health and Life Science Technologies	Energy and Environmental Technologies	National Science and Technology Infrastructure	Scientific, Technical and Medical Information
2009-10 PAA
Research and Development	148.8	57.9		132.1	36.4	64.2
Technology and Industry Support			266.0				43.6
Total Department	148.8	57.9	266.0	132.1	36.4	64.2	43.6

² Figures have been rounded to the nearest millions of dollars. Due to rounding, figures may not add to totals indicated.
³ Planned spending reflects best estimates of spending to year end.

1.2 Planning Summary

1.2.1 Financial Resources ($ millions)

2010-11	2011-12	2012-13
749.04	610.25	606.3

⁴ Includes $112.82 million of program and infrastructure stimulus funding from Canada's Economic Action Plan.
⁵ Excluding stimulus funding, the difference between FY10-11 to FY11-12 is approximately $26 million. This difference is largely related to reductions in forecasted spending as a result of 2008 Program Review and collective bargaining.

Except where noted otherwise, all financial results are reported on a cash accounting basis for historical comparability.

1.2.2 Human Resources (FTEs)⁶

2010-11	2011-12	2012-13
3,675	3,511	3,465

⁶ All FTEs herein are calculated based on average salary.

1.2.3 Planning Summary by Strategic Outcome

NRC Strategic Outcome 1: Advancements in innovative technologies and increased innovation capacity in targeted Canadian industries and national priority areas

Performance Indicator(s)	Target(s)
Average incremental number of new and improved client products as a result of NRC's R&D activities compared to non-clients	0.6 by March 2012
Average incremental client R&D expenditures as a result of NRC's R&D activities compared to non-clients	$75,000 by March 2012
Average incremental client R&D full-time equivalents employed as a result of NRC's R&D activities compared to non-clients	1.2 by March 2012

Program Activity	Forecast Spending ($ millions) 2009-10	Planned Spending ($ millions)			Alignment to Government of Canada Outcomes
		2010-11	2011-12	2012-13
Manufacturing Technologies	126.6	115.0	111.0	110.0	Strong Economic Growth
ICT and Emerging Technologies	50.4	44.8	42.5	41.9	Strong Economic Growth
Industrial Research Assistance	277.97	237.68	134.7	134.0	Strong Economic Growth
Health and Life Sciences Technologies	138.6	102.3	105.1	104.4	Healthy Canadians
Energy and Environmental Technologies	31.6	28.2	27.1	26.8	A Clean and Healthy Environment
Total	625.1	527.9	420.4	417.1

⁷ Includes $127.5 million of program stimulus funding from Canada's Economic Action Plan.
⁸ Includes $100.0 million of program stimulus funding from Canada's Economic Action Plan.

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

Performance Indicator(s)	Target(s)
Proportion of surveyed S&T infrastructure users who report positively on the value of the NRC infrastructure used	85% by March 2012

Program Activity	Forecast Spending ($ millions) 2009-10	Planned Spending ($ millions)			Alignment to Government of Canada Outcomes
		2010-11	2011-12	2012-13
National Science and Technology Infrastructure	51.8	49.7	47.6	47.2	An Innovative and Knowledge-based Economy
Scientific, Technical and Medical Information	43.3	39.0	28.1	28.0	An Innovative and Knowledge-based Economy
Total	95.1	88.7	75.7	75.2

Program Activity	Forecast Spending ($ millions) 2009-10	Planned Spending ($ millions)			Alignment to Government of Canada Outcomes
		2010-11	2011-12	2012-13
Internal Services	152.3	132.39	114.1	114.0	N/A

⁹ Includes $12.82 million of infrastructure stimulus funding from Canada's Economic Action Plan.

1.2.4 Contribution of Priorities to Strategic Outcomes

The Government of Canada recognizes the far-reaching implications of innovation and that Canada can and must do more to turn ideas into solutions that address substantial issues such as a cleaner environment and to improve our economic competitiveness. As a result, the government developed a S&T strategy, Mobilizing Science and Technology to Canada's Advantage that lays out a plan to develop three distinct Canadian advantages: an Entrepreneurial Advantage that encourages firms to be innovators; a Knowledge Advantage that puts Canadians at the forefront of research and discovery; and a People Advantage that helps build the best educated, most skilled and most flexible workforce. As Canada's largest federal research body, NRC plays a key role under each Advantage and works to contribute to successful progress against the federal S&T Strategy.

• NRC supports Canada's Entrepreneurial Advantage by focusing on solutions-oriented R&D to introduce new products and processes to the marketplace and translate technologies into industrial applications for growth opportunities for SMEs and industrial sectors; by providing valuable support, advice and financial assistance to SMEs through NRC's Industrial Research Assistance Program (NRC-IRAP); and by working with academia, government and industry in communities to build and grow regional technology clusters that accelerate commercialization of specialized technologies and attract highly qualified personnel (HQP) to regions across Canada.
• NRC supports Canada's Knowledge Advantage by focusing its programs and resources on key technology areas to increase Canada's innovation capacity. By providing, maintaining, and advancing national infrastructure and scientific information that underpins innovation, NRC contributes to leading-edge knowledge generation. Furthermore, NRC conducts R&D that makes NRC one of the world leaders in publication productivity in niche areas when compared against other national science organizations.
• NRC supports Canada's People Advantage by continuing to recruit, retain and train highly qualified personnel for NRC and regional communities across Canada. In addition, NRC works with universities across Canada to train students and supports the placement of budding innovators in SMEs by providing financial support to graduates seeking job experience with innovative firms.

NRC will work to continue to contribute to Canada's leading edge in innovation and make an impact in the needs of today, and anticipate and provide solutions for the challenges of the future. Accordingly, NRC's operational priorities are directly aligned to achieve NRC's Strategic Outcomes, which in turn, are aligned to contribute to the achievement of the government's economic and social objectives in: strong economic growth; health and wellness for Canadians; a clean and healthy environment; and an innovative, knowledge-based economy for Canada.

Operational Priority	Type	Links to Strategic Outcome(s)
1. To contribute to the global competitiveness of key industrial sectors and to support the economic growth and development of communities across Canada.	Ongoing	SO1
Why is this a priority? Fuelling Canada's strong economic growth is a priority for the Government of Canada, as evidenced in its federal S&T Strategy and Budget 2009. By virtue of its R&D competencies, infrastructure, technology commercialization and industry support, and partnerships, NRC bridges the knowledge generation activities of universities with the economic interests of industry. Given the recent economic stresses on SMEs, NRC plays an even more critical role in helping Canadian innovative activity and contributing to near-term economic recovery and long-term sustainability. Plans for meeting the priority NRC will provide targeted support and services to specific high-impact and emerging industry sectors. These sectors are technology intensive and depend on innovation for their growth and competitiveness, thus benefit greatly from the resources and knowledge that NRC provides. Key sector activities at NRC will continue to be managed in a comprehensive way to ensure that scientific and engineering capabilities are brought together to work in collaboration with private and public partners to address the immediate and future needs and opportunities required by each sector. Research will be translated into tangible solutions for industry that will help create an attractive business environment, maximize the contribution of all sectors to Canada's economy and support long-term growth. As an example, NRC provides strong research support for the Canadian information and communications technology (ICT) sector by working with SMEs and developing systems and hardware for next generation technologies and applications that will facilitate industry growth and global competitiveness. For more information, please refer to NRC key sectors. NRC will continue to work with university, industry and government to stimulate the growth of community clusters of firms specializing in priority technology areas.These clusters will continue to accelerate the commercialization of new technologies, products, processes and services, and build S&T capacity in specific industries and regions across the country. For more information, please refer to NRC technology clusters. As part of Canada's Economic Action Plan, the federal Budget 2009 provided $200 million over two years to the NRC Industrial Research Assistance Program Activity (NRC-IRAP). In 2010-11, these funds will continue to be used to temporarily expand advisory and financial services to more SMEs to enable their success.

Operational Priority	Type	Links to Strategic Outcome(s)
2. To support and conduct R&D in areas of national importance such as healthy Canadians, sustainable energy and a clean environment.	Ongoing	SO1
Why is this a priority? The federal government recognizes that innovation is the driver behind addressing many of Canada's health, energy and environmental issues. As a result, the federal S&T Strategy commits to establishing and supporting strategic research priorities that will propel solutions forward. In support of the federal S&T Strategy, NRC has identified three priority areas (Health & Wellness, Sustainable Energy, and the Environment) where NRC can make unique and compelling contributions to solutions in substantial issues that cannot be solved by any one organization or country alone. Plans for meeting the priority The Health and Life Science Technologies Program Activity will continue to partner with academic, government and private sector players to conduct R&D and develop applications and market solutions in such areas as general health and wellness, age-related and infectious diseases, and the prevention, early diagnosis and improved treatment of diseases such as cancer. For Sustainable Energy for Canada, NRC will continue to collaborate and work towards solutions to reducing energy requirements while finding better, more environmentally friendly ways to meet current needs. Areas that NRC will continue work in are energy efficiency for industrial processes and transportation, renewable energy sources, bioenergy, fuel cells and oil sand development. Contaminated effluents treatment, waste management, the battle against global warming, and eco-efficiency all present challenges where innovative, cutting-edge technology solutions are critical for Canada. NRC will continue to develop environmental technologies to contribute to solutions in these challenges such as monitoring air quality, preventing pollution and cleaning up contaminated sites.

Operational Priority	Type	Links to Strategic Outcome(s)
3. To provide integrated support that engages key players across government, academia, and industry.	Ongoing	SO2
Why is this a priority? NRC has an integrated, multidisciplinary approach and has identified opportunities where the organization can play a role to address gaps in Canada's innovation ecosystem that limit the nation's capacity to generate and transform new knowledge into real economic value. Plans for meeting the priority NRC will continue to provide integrated S&T infrastructure to support Canadian excellence in R&D (e.g., facilities, equipment, etc). Canada is one of the world leaders in cutting-edge infrastructure and technology platforms. NRC will continue to work with university, industry and government stakeholders in Canadian communities to ensure that Canada's national science and technology facilities are up-to-date and accessible to Canadians in accordance with federally legislated and assigned mandate and/or evolving national needs. In response to funding allocated in Budget 2009, NRC will upgrade and enhance existing facilities. This will strengthen the Canadian economy by enabling scientists to work alongside firms to generate knowledge and commercialize technology. NRC will continue with initiatives funded under Modernizing Federal Laboratories and the Accelerated Federal Contaminated Site Action Plan. Both initiatives will be completed by April 2011. NRC remains committed as Canada's national science library and will continue to provide Canada's innovation community with tools and services for accelerated discovery, innovation and commercialization.

Management Priority	Type	Links to Strategic Outcome(s)
To ensure effective program management for a sustainable organization.	Ongoing	SO1 SO2
Why is this a priority? Ensuring effective program management will enable NRC to fulfill its purpose of providing "integrated science and technology solutions in areas of importance to Canada". NRC must be a sustainable and agile national research and innovation organization for Canada in order to achieve its Strategic Outcomes. NRC is working to ensure that there is clear and consistent corporate direction, and relevant program support to achieve its goals in alignment with federal S&T priorities. Plans for meeting the priority NRC will continue to work on aligning all major internal processes to ensure that all critical factors feed into strategic decision-making. NRC will exercise its new integrated planning and performance management process, tools and structures to ensure alignment with priorities, and improved performance reporting of financial and non-financial information for greater efficiency in management and transparency. NRC will continue to strengthen its governance and associated accountability processes. NRC will focus on HR initiatives to attract and engage talent and build organizational capability.

1.2.5 Risk Analysis

NRC's operating environment is scientific and technical in nature, combined with a supporting infrastructure of corporate and business/entrepreneurial expertise to meet industry needs for technology transfer and commercialization. To be valued as the world's best national organization for research and innovation, as defined by NRC's vision, highly qualified scientific and technical personnel, state-of-the-art research equipment and facilities, and an innovative work environment that supports a network of national and international collaborations are crucial elements, particularly in today's environment of open innovation.

NRC's most recent Corporate Risk Profile for 2009-10 highlighted an increasingly competitive global R&D environment with significant investments by foreign governments into science and technology relative to Canada (e.g., $21.5 billion federal investment in R&D as part of the economic stimulus package in the United States); a mobile R&D workforce that is more and more concentrated in areas outside of North America, such as China and India; and a local and global economy still recovering from the economic downturn (including NRC partners and clients). Some of the highest risks facing NRC relate to: a) funding and financial pressures related to uncertainties around funding renewal for major initiatives, increasing operational costs, and a static core budget; b) increasing competition for HQP which is linked to other high risk areas such as succession planning and leadership development; and c) limited awareness of NRC impacts by some stakeholders.

Looking at the interrelations between the highest risks, NRC's Senior Executive Committee and the NRC Council have agreed upon priority areas in the coming year to commit to action. These are issues that most significantly affect other high risks: 1) Strategic Leadership – including the need to continue strengthening decision-making and priority-setting mechanisms and structures; 2) Stakeholder Relationships – including the development and implementation of an effective and targeted communications, marketing and stakeholder relations strategy; and 3) Financial Sustainability – including the implementation of a series of short-term and long-term measures to ensure the success and viability of NRC Program Activities. Senior executive leads have been identified to further develop the details of the action plan around each area to ensure that NRC can continue to deliver on its operational and management priorities via the most effective program management, while mitigating identified risk areas.

At the same time, the current turbulent environment is creating opportunities where NRC can play a substantial role and accelerate progress against objectives. Some of these relate to: 1) Emerging national issues (for example in the Arctic and sustainable energy) where NRC can leverage its cross-Canada presence and multidisciplinary expertise to help provide solutions; 2) The growing need for innovative partnership models where NRC can leverage its strong regional presence and relationships with local governments/universities/industry; and 3) Economic stresses for SMEs where NRC has a growing recognition and role for the NRC Program Activity, Industrial Research Assistance.

1.2.6 Expenditure Profile

NRC's forecast spending for 2009-10 is $872.7 million. Over the past three years (fiscal years 2006-07 to 2008-09), actual spending has averaged $757.1 million. The increase of $115.6 million (or 15%) over the average spending in fiscal 2009-10 is due primarily to the funding received for Canada's Economic Action Plan. The planned spending for fiscal years 2010-11 to 2012-13, as indicated in the Spending Trend graph, reflects an overall decline in the budget. The decline is due to the sun-setting of the Cluster Initiatives, TRIUMF and a permanent reduction related to 2008 Program Review exercise. NRC is currently seeking renewal of the Cluster Initiatives and TRIUMF and until they are renewed, these items cannot be included in Planned Spending.

Canada's Economic Action Plan: Budget 2009 allocated funds to the NRC's Program Activity, Industrial Research Assistance (NRC-IRAP) to provide temporary expansion of the support, advisory and financial assistance that is provided to SMEs. NRC-IRAP directly received $200 million over two years, plus indirect funding through the Community Adjustment Fund and the Federal Economic Development Agency for for Southern Ontario to expand its initiatives for SMEs. This more than doubles the Program's contribution to firms funding and will help companies hire post-secondary graduates. In addition, NRC received infrastructure stimulus under the Modernizing Federal Laboratories initiative ($19.07 million) to address deferred maintenance issues and to modernize facilities that support research in areas of national importance, and under the Accelerated Federal Contaminated Site Action Plan ($4.84 million) to remediate contaminated areas in an effort to clean up the environment and improve safety. For more information on NRC's planned activities as part of Canada's Economic Action Plan, please refer to Section 2.3.

[D]

1.2.7 Voted and Statutory Items

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

Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2009-10 Main Estimates	2010-11 Main Estimates
55	Operational expenditures	397.6	361.3
60	Capital expenditures	42.2	48.1
65	Grants and contributions	140.6	213.0
(S)	Contributions to employee benefits plans	45.7	45.6
(S)	Spending of revenues pursuant to paragraph 5(1)(e) of the National Research Council Act	79.0	80.9
Total		705.2	749.0

Note: Due to rounding, figures may not add to total shown.

Budgetary / Loans, Investments and Advances

Budgetary ($ millions)			Loans, Investments and Advances ($ millions)
2009-10	2010-11	Net Increase (Decrease)	2009-10	2010-11	Net Increase (Decrease)
705.2	749.0	43.8	5.0	5.0	0.0

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