Federal R&D Panel Report

In a week when business lobby groups are appearing before the House of Commons Committee on Finance and calling for more tax breaks, the federal R&D Panel appointed a year ago released a very good report saying Canada’s very generous system of R&D tax incentives haven’t been effective and what we need instead are more direct grants to spur innovation.

Not only that, but it also calls for much greater use of procurement by all levels of government to foster innovation by Canadian companies and greater use of government lending through the business development bank to help finance innovation. 

This approach towards innovation involves a more active and strategic role for government and is similar to what contributers to this blog and the Alternative Federal Budget have proposed over the years.   

The recommendations on procurement are a strong acknowledgement of the benefit of policies such as Ontario’s domestic content provisions for renewable energy and municipal procurement measures, which will be undermined by trade deals such as the Comprehensive Economic and Trade Agreement now being negotiated with Europe.

Interesting to see that one of the researchers involved in the expert panel was Dan Ciuriak, former deputy chief economist at the department of foreign affairs, who wrote the excellent paper What if Everything We Know About Economic Policy is Wrong? — also well-worth reading.