Thank you, Mr. Chair
My colleague Vaughan Dowie and I wish to thank the members of the Standing Committee on Finance for the opportunity to speak this morning. We will be splitting our presentation. I will begin with McGill's first recommendation and Vaughan will take the second and third.
McGill University recommends that the federal government significantly increase the funding for university research, including direct funding for research and compensation for the indirect costs of university research. You don't need me to tell you that innovation is the key to the future prosperity and well-being of Canadians, or that universities play a vital role in innovation. University research creates knowledge, and universities train highly qualified staff who will work in all organizations of the innovation system in the years to come, whether in the private sector, in government or in universities themselves.
In order to continue to offer a high-quality education to students, universities in Canada require funding that is competitive at international levels for teaching, but also for research. At a research-intensive university like McGill, one of the hallmarks of the education we offer is that teaching is informed by the research carried out by professors.
The federal government is the key funder of university research in Canada. The cost of research can be divided roughly into two types: the direct cost of research—the funding that goes to investigators and scholars to carry out the research, to hire research assistants, and to pay for supplies in order to be able to carry out the research activity—and also the institutional or indirect costs of research. These are costs associated with paying for specialized equipment that's necessary to carry out research, research libraries, research computer networks, and to hire specialized technicians to run the complex machinery that is required to carry out research.
Institutional costs also occur in relation to the research process: applying for research grants, administering grants, reporting; they cover activities that enable universities and societies to get the most benefit from university research, such as protection of intellectual property and technology transfer activities. The institutional costs are related also to activities that enable universities to ensure that we are meeting regulatory requirements and that ethical review takes place.
At the current time, institutional costs of federally funded research are compensated in the most research-intensive universities at the rate of just over 21 cents per dollar of directly funded research. A number of studies and practices in other jurisdictions that fully meet the institutional cost of research indicate that these costs are in fact between 40 and 60 cents on the dollar, depending on the kind of research undertaken. The moneys that research-intensive universities like McGill use to cover the institutional costs of research are taken from other parts of their budgets, including the operating budget. Were the federal government to fully compensate for these costs, we would be able to use those moneys for other important aspects of the academic mission, including teaching, services to students, and of course dealing with our deferred maintenance costs.
The first recommendation of McGill University is that the federal government should make a significant increase to financing for research, including both funding direct research and moving to full compensation for the institutional costs of research.
Thank you.