Superclusters seek more federal funds as COVID-19 speeds spending
Three months after a scathing report found the federal government’s flagship supercluster innovation program was missing funding targets, three of the five clusters now say they’re on track to max out their budgets nearly two years ahead of schedule.
With a slate of new Covid-19-related projects, the federal government has accelerated spending after a sluggish start to the program. Now Ceos of two of the superclusters are lobbying the government for additional funding to carry them through the five-year project period — and beyond.
The B.c.-based digital Technology Supercluster is less than two months away from exhausting its $153-million federal budget, which was meant to hold the organization through until the end of 2023. The organization is lobbying the federal government to increase its original commitment.
In Ontario, Ngen, the advanced manufacturing cluster, has spent $148 million of its nearly $230-million federal budget and is seeking ongoing annual government funding to support it beyond the program’s initial fiveyear period.
While the Saskatchewan-based Protein Supercluster is also on track to spend its entire budget by the end of March, it is not currently pushing for more funding, or for an extension of the program.
The Liberal government announced the superclusters program in the 2017 federal budget, committing $950 million over five years to five regional innovation streams — digital technology in B.C., advanced manufacturing in Ontario, proteins in the Prairies, AI in Quebec and oceans in Atlantic Canada. The organizations — non-profit consortia that bring together startups, big business, academia and government agencies in a bid to spur innovation — are responsible for selecting projects focused on research and commercializing products, and funding them with a mix of public and private money.
Leaders in the innovation space have criticized the program for its slow start — federal funding for the first projects wasn’t announced until March 2019 — and for lacking a clear strategy for how to create jobs and boost the economy. An October 2020 report from the Office of the Parliamentary Budget Officer (PBO) found that the federal government was behind on its supercluster targets, including deploying funding and creating jobs and GDP growth through the program’s projects. As of March 6, 2020, the federal government had allocated just $30 million compared to the $104 million it had anticipated spending by then, according to the report. The PBO also estimated the program was about 23,000 jobs short of hitting the government’s target of 50,000 jobs created through its various projects.
Funding has picked up dramatically since then, according to the department of Innovation, Science and economic development (Ised). In an email to The Logic, Ised senior communications advisor John Power said the department has now invested $490 million across more than 265 projects, and that the private industry has spent another $700 million.
“All five Superclusters are on track with their work, and the digital Technology, Protein Industries and Next Generation Manufacturing Superclusters have indicated they are likely to fully commit their funding in the coming months,” Power confirmed.
Sue Paish, the CEO of the digital supercluster, registered to lobby the federal government in July 2020. She has met with federal representatives nine times in the past six months, according to lobbying records. In an interview with The Logic, Paish said the meetings have centred on the supercluster’s COVID-19 response and securing additional funding from Ised, beyond the department’s initial commitment.
“We’ve had zero issues with getting funding from the Government of Canada to support our commitments to projects from day 1 on that front,” said Paish.
To date, Paish said the program has invested $200 million across 60 projects, with more than half of the funding coming from the private sector. Paish said the cluster had initially planned to spend $36 million in public funding in fiscal 2021-22, but is on track to deploy about three times as much for the period.
Ngen spokesperson robbie Macleod told The Logic that the private sector has spent $1.42 for every dollar of federal funding, bringing the Ontario program’s total investment to $359 million across 62 projects. The organization is now asking Ottawa to commit $50 million every year on an ongoing basis.
Tiffany Stephenson, a spokesperson for the Protein Supercluster, said the organization also expects its federal funding to be fully committed by the end of March. “We feel that we have accomplished a lot in a short period of time, and that it would be beneficial to keep the momentum going,” said Stephenson. The organization has invested $115 million of its $153-million federal budget to date, plus another $214 million in private-sector funding.
The uptick in funding follows a rush of investments in Covid-19-specific projects. The superclusters have collectively launched 80 projects to help address issues related to the pandemic, to which the federal government has allocated more than $14 million, said Power.