Ottawa’s Innovation Superclusters Initiative (ISI) isn’t receiving enough federal money and is likely to miss its job creation and GDP growth targets, according to a report released Oct. 6 by the Office of the Parliamentary Budget Officer (PBO) Yves Giroux.
The report also indicates that the innovation impact is unknown with the PBO requesting the federal government to use quantifiable performance indicators so that the innovation impact of the ISI can be effectively and accurately measured.
Introduced by the federal government in its 2017 budget, ISI is aimed at the creation of 50,000 jobs across Canada, accelerating innovation, and increasing GDP by $50 billion over 10 years. Budget 2017 earmarked $950 million over five years for this initiative, to assist with the creation of five superclusters across Canada, where the public and private sectors will undertake collaborative research. Federal funding is expected to be matched by contributions from nonfederal entities, including the private sector, universities, and other levels of government. Non-federal partners have announced $1,087 million over the same five-year period.
This announcement was followed by the introduction of five successful consortia in February 2018 by the Innovation Minister Navdeep Bains.
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According to the PBO, however, the data shared by the government in March 2020 is an indication of the lag in actual spending when compared to the original budget. The government originally anticipated that it would have spent $104 million (or 11 per cent of its total budget) by that point. In comparison, only $30 million was spent (29 per cent of the original projection), most of which (59 per cent) has been spent on administrative and operating tasks to date. The remaining (41 per cent) has been distributed over 45 specific research projects.
“If supercluster partners spend all the money that has been announced, roughly 27,000 direct jobs would be created as a result,” reads the report. “However, the nature of these jobs, whether they will be full-time, part-time, permanent or temporary, is unknown at this point.”
There is a need for the government to materially increase the “the rate of project selection and implementation” to achieve planned timelines and targets, the PBO said.
The data and the analysis in this report were based on information collected before the COVID-19 pandemic.