There is certainly collaboration on a researcher-to-researcher basis so that a person who works in the mine tailings area, like Professor Lesley Warren, works with people at the University of British Columbia, and she also works with people internationally at Berkeley and also in Australia.
I have two programs in groundwater remediation that are both multi-institutional programs. One of them is an NSERC create program that has collaborators from Toronto, Western, Queen's, and Waterloo. I have a second Ontario research fund program with researchers from Western and Queen's. There are lots of examples of collaboration between universities where people get together to work on collaborative projects, which is, of course, highly encouraged by the granting agencies and leads to much better productivity and collaboration.