Budget 2015: With the fiscal balance restored where to next?
The Federal Budget is central to establishing the country’s fiscal credibility in a global context, while also helping to underpin the government’s overall policy direction and undertakings. Although the 2015 edition was pre-billed as an ‘austerity’ Budget aimed primarily at restoring the government’s balanced fiscal position, there were under the Budget’s broad economic themes of Jobs and Economic Growth some notable re-commitments and increased funds for existing programs and initiatives which are important to Canada’s biotech industry’s competitiveness in the context of the capitalizing on the global opportunity presented by the bio-economy.
Today’s global population is closing in on the seven billion mark and by 2050 it is predicted to grow to over nine billion people. This exponential growth brings with it enormous challenges as nine billion people will require new medicines, food, energy, and material goods. In addition, the population explosion will be accompanied by a surge in economic growth in countries such as India and China. This will only increase the imperative of finding more efficient and less impactful ways for humans to live on this planet. Within the social imperative of addressing this daunting global challenge lies the enormous economic opportunity for the innovative solutions biotechnology delivers.
Importantly, Canada has in place many of the components necessary for global competitiveness and success in biotechnology. Indeed, Canada is home to a thriving biotech ecosystem consisting of: world-class universities, science and research institutes; biotech entrepreneurs and scientists; large multinational players; and, a highly educated workforce. All told, the Canadian biotech ecosystem is an economic strength that positions Canada well to successfully compete in the emerging global bio-economy.
Yet, while Canada is well-positioned, other nations are also acutely aware of this economic opportunity and are quickly moving to develop and support their domestic innovation industries by developing policy frameworks, “hosting conditions”, supportive of innovation and, importantly, investment. Unlike many other industry sectors, the fundamental building blocks of a strong biotech industry, investment and ideas, are supremely mobile; they will go to where they are most supported. If Canada is to compete in this space and reap the benefits of a robust scientific research community then it must keep pace with other jurisdictions and establish globally competitive hosting conditions to attract investment and support the development of the innovation in Canada. If Canada fails to do so, the innovation will travel to where it is most supported.
With Canada’s global competitiveness as a central consideration, this week’s federal Budget was important in several respects. The projected $1.4 B surplus will clearly meet one of the government’s stated primary objectives of delivering a balanced Budget. The importance of restoring fiscal balance to the government’s books cannot be underestimated particularly as it relates to establishing Canada’s overall economic stability and credibility in the eyes of investors and multinational businesses alike. Only with stable finances and healthy fiscal planning as a foundation can a government’s strategic plan and its corresponding initiatives succeed.
And although labeled as prudent and austere, the Budget did contain some important long-term funding commitments to a number of organizations of strategic importance to the development of a strong and diverse biotech ecosystem. Specifically, the Budget committed an additional $46 million to existing budgets of granting councils, including CIHR and NSERC, both of which have demonstrated significant capacity to support the early stage development of biotech innovation. Importantly, the National Research Councils (NRC) will receive an increase of nearly $120 Million in funding. The recommitment and increased funding will not only allow established programs to continue work already underway but will also provide for future planning free of uncertainty. In a broader sense, the Budget’s financial commitments also signals that the government understands and values the strategic importance of these programs and entities.
Looking ahead, with the fiscal house in order and budget growth on the horizon, now is the time to plan for where this country should go. In this context, the industry will be looking to work with the government to develop a strategic path forward for biotech innovation with government and the industry ecosystem working in partnership. In particular, the country must ensure it remains a destination for investment. Ultimately, with the right domestic hosting conditions in place to support innovation and attract investment, Canada is well-positioned to be a global leader in the global bio-economy.