As knowledge and information become the cornerstones of the world economy, it is imperative that Canada remain competitive in its education and research activities. In the face of the federal government's fiscal constraints, excellence in these areas can only be maintained through innovation in the research, information and knowledge sectors. The areas outlined below demonstrate the government's commitment to facilitating this innovation by encouraging creativity in research and education.

The bulk of the government's university research expenditures continue to flow through the three Granting Councils. In recognition of their critical role in supporting university research and training, the 1995-96 budgets for the Natural Sciences and Engineering Research Council (NSERC), the Medical Research Council (MRC) and the Social Sciences and Humanities Research Council (SSHRC) totalled over $800 million.

As for future funding for the Granting Councils, the federal government is committed to supporting its investment in university research to the greatest extent possible. It is important to note that, in the March 1996 Budget, the Councils were treated equally to other government departments and agencies with regard to the 3.5 per cent efficiency saving in 1998-99. However, in last year's Budget, the budgets of the Granting Councils were reduced by less than those of most other economic activities.

In the face of fiscal constraints, there are innovative partnerships being developed with the private sector as a means of sustaining support for researchers. The Canadian Medical Discoveries Fund is one such initiative. In addition, NSERC is involved in the creation of an investment fund to provide support for research emerging from the natural sciences and engineering.

Finally, it is worth noting that the Granting Councils have worked in conjunction with a number of government departments on such recent initiatives as the Technology Transfer Program, the Networks of Centres of Excellence and the Metropolis Project.

Initiated in March 1995, the Technology Partnership Program (TPP) is a joint venture of the three Granting Councils and Industry Canada. TPP, a new approach to get university research into the marketplace quickly, helps Canadian small- and medium-sized companies and universities turn university technology and ideas into new and improved products, processes and services. By participating in the program, universities can do applied R&D and demonstrate the feasibility of a technology while companies are able to exploit the technology commercially and create jobs for Canadians.

The federal government announced, in July 1995, funding for four new Networks of Centres of Excellence (NCE), which complement the existing 10 networks. The NCE program, which is administered by the three Granting Councils with support from Industry Canada, is an innovative approach to building partnerships among universities, industries and government for work on problems of strategic importance to Canada. The NCE program has produced significant discoveries and fostered dynamic and productive university-industry collaboration, helping to accelerate technology development and application. In 1995-96 alone, 81 patents were filed and 21 awarded, 46 licenses were granted to industry and a further 59 are under negotiation. In addition, the networks have established 27 start-up firms with over 140 employees.

Trans-Forum, an Internet-based communications and information service, links technology offices of a growing numbers of universities, colleges and research hospitals across Canada. Its purpose is to enhance technology transfer from higher education institutions to Canadian business, especially SMEs by making key information instantly accessible to technology transfer officials to improve their marketing efforts. Launched as a pilot project in June 1994, it entered its second phase in January 1995. It is available in both gopher and World Wide Web (WWW), and in both official languages.

The Information Highway Advisory Council (IHAC) was established in April 1994, to advance the goal of making Canada a world leader in the development and use of the information highway, and through it, create substantial economic, social and cultural advantages for all Canadians. The council's work culminated in September 1995, with the release of its Final Report, containing over 300 recommendations on a broad range of issues and concerns, including universal access and lifelong learning. In May 1996, the government released Building the Information Society: Moving Canada into the 21st Century which is both a progress report on Canada's transition to an information society and the government's response to the recommendations put forward by IHAC. The Council has been invited to continue its work until March 1997. The issue of learning and the workplace has been put before the council as follows: During the transition to a knowledge-based economy, how can Canada respond to the changes in the workplace, the situation of labour and develop a lifelong learning culture?

Elements of the Canadian information highway are being developed through the efforts of more than 200 people from 56 organizations representing Canada's research, university, business and government communities through CANARIE -- The Canadian Network for the Advancement of Research, Industry and Education. CANARIE's mission is to facilitate the development of critical aspects of the communication infrastructure of a knowledge-based society and economy in Canada. As such, CANARIE contributes to Canadian competitiveness in all sectors of the economy, to wealth and job creation and to quality of life. In its support of CANARIE Inc., the federal government has invested $106 million through to 1999, while the private sector will contribute over $400 million.

Canada's SchoolNet is a set of interactive, Internet-based educational resources and services for educators and learners from kindergarten to Grade 12. This program is designed to stimulate learning and equip Canada's youth with the information and telecommunications skills required in the global knowledge- based economy. Led by Industry Canada and supported by the provincial and territorial governments, First Nations leaders, the academic sector and industry, SchoolNet's mandate is to ensure these learning opportunities are provided to all Canadian schools, colleges, universities and libraries within three years. By establishing the framework for efficient communication, this program assists current and future university researchers access a wider audience, draw upon a greater number of research resources, and disseminate information effectively.

PRECARN -- Pre-Competitive Advanced Research Network -- as announced in January 1995, will receive $19.4 million over five years in support of its Phase 2 programs. PRECARN Associates Inc. is a not-for-profit corporation operating as a national consortium of Canadian organizations to support long- term pre-competitive research and pre-commercial development in the field of intelligent systems, particularly advanced robotics and artificial intelligence. Its broad-based membership includes some 30 organizations from industry, universities, research centres, institutions and laboratories representing a range of economic sectors from manufacturing to utilities and mining.

This next phase will build upon the success of the first phase in creating new partnerships and working relationships among governments, industry and universities and its success in developing new intelligent systems technologies. PRECARN also manages the institute for Robotics and Intelligent Systems (IRIS), one of the federal government's Networks of Centres of Excellence. IRIS is a network of some 140 researchers working at 23 Canadian universities doing research in the same areas as PRECARN.

One NRC program that deserves special note is TRIUMF -- the Tri-University Meson Facility -- located at the University of British Columbia and operated jointly by four western universities: UBC, Simon Fraser, Victoria and Alberta. TRIUMF, Canada's largest subatomic physics laboratory and one of Canada's largest basic science research facilities is used by over 700 Canadian and foreign researchers. In June 1995, the federal government approved TRIUMF's Five-Year Plan and committed $166.6 million for this period to allow TRIUMF to continue its internationally acclaimed research programs, as well as undertake new initiatives.

These new initiatives include the construction of a new exotic beams accelerator, which will allow Canadian and foreign researchers to undertake studies related to nuclear physics, astrophysics and nuclear medicine. In addition, TRIUMF will provide an in-kind contribution of high-technology components and services to the world's highest energy particle accelerator, under construction at the CERN laboratory in Geneva, thereby ensuring that Canadian scientists continue to participate at the leading edge in this field of research.

The activities of TRIUMF will have long-term benefits, for both Canada's scientific community and high-technology industry. In 1996, the contributions to CERN and progress on the new facility construction were on schedule. In August 1995, TRIUMF became the only facility in Canada to provide proton beam therapy for patients with ocular melanoma.

The federal government's support of basic research has also been demonstrated by its support of the Sudbury Neutrino Observatory (SNO). This Canadian-led, international project, which has participation from scientists from 5 Canadian universities, as well as universities and national laboratories in the United States and United Kingdom, will probe fundamental questions relating to nuclear physics, astrophysics, and solar fusion processes.

The government recently increased its financial commitment to the construction of SNO, which is expected to be completed by spring 1997. This increased funding brings the federal contribution to SNO to $45 million, of a total construction cost of about $76 million. The remaining funds have been provided by provincial and foreign governments, and the private sector. In addition, the project has benefited from the loan of $300 million of heavy water from Atomic Energy of Canada Ltd., and the use of the world's deepest hard-rock mine, made available to it by INCO Ltd. This project has demonstrated the benefits that can accrue to Canadian science by virtue of multi-sectoral partnerships.

The unique scientific and engineering challenges that SNO has faced in its construction phase have provided SNO scientists with the opportunity to interact extensively with the private sector. This interaction has resulted in the development of products and services that are of value not only to SNO, but also to Canadian companies.

The Communications Research Centre (CRC), an institute of Industry Canada, has been dedicated to advanced communications R&D for more than 40 years. Its key research areas include radio science and radiocommunications, broadcast technologies, satellite communications systems, network systems and microelectronic and optical technologies. CRC frequently collaborates with Canadian universities on a range of projects relating to its research specialities and frequently has placements for students who are in cooperative programs.

The Intelligent Manufacturing Systems Program (IMS) is a major multi-national cooperative research and development program focused on the next generation of advanced manufacturing technologies. Officially launched at the end of April 1995, the program is broad in scale and scope, encompassing all manufacturing sectors from the industrialized world. This industry- led initiative brings together the world's leading manufacturing firms, top academics and government labs to study advanced manufacturing technology and processes, key issues to Canada's national agenda on competitiveness.

Canada was selected to chair the International Steering Committee for the initial two years of the 10-year IMS Program, as well as be responsible for the Inter-Regional Secretariat. For 10 years, the world's leading advanced technology companies, universities and research institutions from Canada, the United States, Europe, Japan and Australia will pool their knowledge and resources in co-operative research projects to explore the frontiers of knowledge in virtually every aspect of manufacturing. Universities and academics contribute to, and benefit from, this project at an international level thereby gaining the opportunity to engage in research with industrial partners, improve the quality of training, education and transfer of knowledge and ensure that state-of-the-art information is broadly available for curricula development.

Over the past year, university participation in IMS projects has increased from only a few post-secondary institutions to over 20 universities across Canada. In addition, revenue generation has risen from $250 million to a projected $1 billion in 1998 from projects ranging from Sensory Inspection Systems to Mine Automation. There are currently 6 active projects and 14 others in the development stage.

Industry Canada assistance has been used to establish a new university program on wood processes at the University of British Columbia to examine the feasibility of commercialization of both forestry and environmental research, develop economic databases and promote high-technology opportunities through an automotive research centre. In addition, the government continues to seek new ways to encourage women to participate in science and engineering.

The National Education Initiative for the Furniture and Wood Processing Industries is a unique collaboration among Industry Canada, a group of furniture and wood processing companies and the University of British Columbia (UBC), and has resulted in a new university curriculum and degree program. Based on the German model at the Fachhochschule Rosenheim, this new program trains students in various aspects of wood processing. Through this industry-led initiative, graduates will be prepared to meet specific Canadian industrial wood processing needs.

After its first successful year, the program no longer relies on Industry Canada for financial support and instead has worked to become self-sufficient. UBC was awarded this program and has since secured the necessary funding, facilities and teaching staff, finalized a curriculum and has had students complete their first year. Currently, Industry Canada is examining the possibility of applying this education model to other industrial sectors in Canada.

The Institute for Chemical Science and Technology (ICST) receives support from Industry Canada and has adopted a new focus to address environmental problems under the name of Environmental Science and Technology Alliance of Canada (ESTAC). ICST/ESTAC has six corporate and 15 university members that pay annual dues. The collected revenue is used to fund research and development projects selected through a competitive process from proposals submitted by members. Projects are normally conducted at a university in collaboration with industry. As members, participating companies have first access to any resulting technology.

The Federal Economic Development Initiative in Northern Ontario, or FedNor, part of Industry Canada, sponsors several programs that benefit local universities. These include, at Lakehead University, a database of detailed information on the Northern Ontario economy, and feasibility studies examining the commercial potential of research coming from Forestry Canada's Research Centre in Sault Ste. Marie.

Another joint university-industry-government initiative is the Automotive Research and Development Centre in Windsor, Ontario. The federal government played a catalytic role in establishing this centre, the first of its kind in Canada. The University of Windsor/Chrysler Canada Automotive Research and Development Centre will extend the university's expertise, provide cooperative job opportunities for Windsor students and pursue niche research in new automotive product technologies.

The release of the federal science and technology (S&T) Strategy, Science and Technology for the New Century -- A Federal Strategy, was an important milestone in Canadian science and technology. Building on the Red Book's recognition of S&T as a key driving force of economic and social well-being, the strategy charts a course for federal S&T based on scientific excellence, relevance to Canadian needs and maximum value for our investment.

The strategy sets out a key challenge -- building a strong Canadian innovation system. In this regard, the strategy focuses on building partnerships and linkages. The costs of performing excellent science have escalated to the extent that, as a nation, we must pool our resources to be able to remain at the leading edge. Governments can no longer afford to do this alone. Neither can they afford to fund every opportunity to do excellent science. The strategy provides guidance to federal departments and agencies in seeking out partners, opening their facilities to the scientific and industrial communities, and transferring technology to those who can make the best use of it to benefit Canadians. In conjunction with the release of the strategy, nine science-based departments and agencies released Action Plans outlining how they would be translating this guidance into concrete action.

In embarking on this course, a new structure for the governance of S&T has been put in place. A committee of Cabinet will be examining our overall S&T performance and making recommendations on priorities. The new Advisory Council on Science and Technology (ACST), announced July 5, 1996, will provide the Prime Minister, Cabinet and the government with strategic advice on S&T issues. The advisory council is made up of 12 eminent Canadians and includes prominent representation from the university research community, including Nobel laureate Dr. Michael Smith. The government is also strengthening the external advice it receives on science and technology at both the departmental and government-wide levels.

Recent years have been difficult for government and those depending on public funding. Budget cutbacks affect all departments and in turn force difficult choices to be made between excellent alternatives. Once again, university research has been more fortunate than most areas, with spending reductions lower than other S&T activities and significantly lower than cuts to non- science activities.

Jon Gerrard, Secretary of State, Science, Research and Development