EXECUTIVE SUMMARY
Canada’s economic health relies on its human, natural and environmental resources and a legislative environment that allows effective mobilization of these resources. In research and development (R&D) this economic health requires strength and balance in public, private and academic sector initiatives. The new federal strategy for science and technology provides the framework for strengthening Canada’s research and innovation performance across sectors. It also recognizes the need for measures to encourage industrial and private sector R&D.

Long-term research and monitoring that is essential to the public good must be conducted in the public sector and supported with public funds. A dynamic research environment in universities fosters new knowledge, its distribution to other sectors, interdisciplinary partnerships, education of students - and ensures a repository of expertise. This pool of skilled human resources is drawn on by the private and public sectors.

The research activities of the private sector are motivated by efficiency and profit margin: this sector requires a mix of realistic incentives and regulations. The corporate sector already benefits from generous R&D tax credits which particularly favour small firms. Credits are the main government tool for influencing the overall level of business-led R&D; the issue is thus whether they should be expanded or made more effective.

The Partnership Group recommends:
• Increased incentives to attract and retain the best scientists and engineers;
• Increased support for research infrastructure in federal laboratories and for indirect costs;
• Fiscal incentives to encourage private sector investment in R&D;
• Support for strategic international partnerships and access to international scientific programs/data.