Targeted research is research that is directed typically towards a very particular goal. In the case of the Institute for Quantum Computing, for example, which I can speak to since it's at my own place in Waterloo, that institute's mission is to try to understand the basics of quantum information theory and how it can be applied to perhaps change computers as we know them now, as well as cryptography, communications, and all kinds of things. It's very directed towards a goal, whereas the discovery grants program is fundamentally curiosity-based research—in other words, people trying to find knowledge for its own sake. These two things are not completely disjointed, of course; there is healthy exchange between them. But if you starve one or decrease one at the expense of the other, then to invert a phrase of a well-known Newfoundlander, we have short-term gain for long-term pain.
On October 21st, 2009. See this statement in context.