Subject: The NDP Plan:Research and Development, Workforce Training

From: [email-masked] (MARY OLIN)
Date: 12 Mar 1993 19:55 PST

INVESTMENT IN RESEARCH AND DEVELOPMENT
     Canada must do a much better job at research and development.  Our
plan includes doubling the federal government's direct investment in
research and development, and working to improve R&D and the adoption of
new ideas and innovations throughout the economy. 
     Technological change is happening very quickly in the present world
economy.  The time between the discovery of a new idea and its
conversion into products and services is shorter than ever before. 
Products have briefer "life cycles" and have to be continuously upgraded
or replaced.  In this environment, Canadian producers face tough
competition from foreign producers who have made major commitments to
research and development. 
     Canada grossly under-invests in research and development and in
innovation.  In 1990 Canada invested 1.37 percent of its gross domestic
product on R&D, up only 0.01 percent since 1971. 
     In contrast, the United States invested 2.88 percent of its gross
domestic product on research and development in 1990 (2.47 percent in
1971).  Here are comparable figures for some of our other trading
partners:
           Research and Development 
        as a % of Gross Domestic Product

                    1971   1990
        Germany     2.20   2.81
        Japan       1.71   2.80
        Sweden      1.49   2.76
        France      1.88   2.42
        Britain     2.10   2.28
        Canada      1.36   1.37

     We must come closer to these levels of investment if we want our
workers to continue to produce products and services as attractive to
consumers, at home and abroad, as competing foreign products.  Doing a
better job at research and development, and at widely diffusing the
results in industry, is a pre-condition to building and sustaining a
full-employment economy. 
     An important first step to improving this performance: our plan
will more than double funding for the National Research Council and the
National Sciences and Engineering Council over the course of the next
Parliament, increasing investment through these agencies from $929
million in 1992-1993 to some $1.9 billion by 1998-1999.  Funding will be
committed on the basis of stable five-year plans for these councils,
enabling them to plan long-term research. 
     The purpose of these investments is to encourage a broad, multi-
disciplinary increase in basic and applied research in universities,
centres of excellence and research institutes.  It is hard to predict
which research project will produce a product breakthrough.  Our purpose
is therefore to invest in a highly diversified manner, subjecting
research proposals to the intense peer review used by the federal
government's research granting coucils rather than trying to direct
funding in excessive detail. 
    To encourage the adoption and diffusion of new ideas generated by
this increased investment, our plan assigns a much more strategic role
for the Department of Industry, Science and Technology.  Among the
Department's mandates:
     The department will oversee a substantially upgraded Industrial
Research Assistance Program.  ("IRAP") This program helps Canadian firms
cover the cost of in-house research and development workers, and
encourages the adoption of new ideas that can be converted into product
breakthroughs.  We will shift the IRAP program out of the National
Research Council and integrate it into the technology diffusion work of
the Department of Industry, Science and Technology.  IRAP is one of the
federal government's most successful and widely-emulated of R&D
programs.  Focused on Canadian homebased firms and aggressively
implemented, it can help make a real difference to Canadian R&D
performance. 
     Within our overall increase in R&D funding outlined above, we will
increase funding for IRAP from its 1992 level of $86 million to $250
million by the end of the next Parliamentary term. 
     The Department will encourage and assist more Canadian-owned firms
to join together in "pre-market consortia", partnerships that spread
risk and work together with universities, centres of excellence and
research institutes to develop new ideas and to diffuse them.  For
example, the Department could bring together the major firms in Canada's
pulp and paper industry, and work with them to launch and share a
much-expanded research and development program aimed at developing
higher value-added pulp and paper products, and at developing less
polluting production processes. 
     The Department will help firms identify best-use methods and
technology. 
     The Department will steer innovative enterprises towards investment
capital includinng the new National Investment Fund. 
     Much of this work will help create building blocks for deepening
clusters of inter-dependent firms and help these clusters become
internationally competitive. 
     There is a limit to what direct government action can accomplish. 
Canada will not reach the levels of investment in research and
development set by our trading partners unless these greater pulic
sector commitments to R&D are matched by a MUCH greater private sector
commitment. 
     Canadian industry falls miserably short of the levels of research
and development investment set by our trading partners.  In 1990
American industrial investment in R&D accounted for 1.93 percent of the
U.S.  gross domestic product; German industry for 2.07 percent; and
Japanese industry for 2.08 percent.  Canadian industry invested only
0.73 percent of GDP in research and development. 
     The absence of "incentives" is not the problem.  Canadian R&D tax
credits are already among the most generous in the world. 
Private-sector industrial research and development is low in Canada
because private companies tend to concentrate R&D in the country where
they are homebased, and more than 50 percent of Canadian industry is
owned by foreign, mostly American, companies.  In the long term, the
best way to improve R&D performance in industry is to reduce the
proportion of foreign ownership in our economy. 
    A smart economy doesn't surrender sovereignty over its economy to
other countries, either through trade deals, or through excessive
foreign ownership.  Under our plan, the federal government will
co-ordinate the investment strategy of the National Investment Fund,
higher public investment in R&D, and the work of the Department of
Industry, Science and Technology through programs like IRAP to steadily
increase the proportion of R&D incentive, Canadian-homebased industry in
our economy. 
     We will tighten the standards applied to foreign investments by
Investment Canada.  An important precondition to approval of substantial
new foreign investments will be the willingness of the investor to
commit to an R&D strategy in Canada. 

A REAL COMMITMENT TO WORKFORCE TRAINING [Some text omitted]
     ...Universities need to find ways to turn around steadily dwindling
enrollments in science and technology.  Statistics Canada recently
reported that full-time enrollment in science and technology studies at
Canadian universities declined from 24.4 percent of all enrollments in
1984 to 20.6 percent in 1989.  In community colleges enrollment in those
fields declined from 33.2 percent in 1984 to 26.7 percent in 1989. 
     Government, industry and labour have to provide for continuous
learning for employed and unemployed workers after they leave school. 
Canadian continuous learning and workforce training is well below the
standards set by our trading partners.  In March 1991 the Financial Post
reported that each year the average Japanese worker receives 200 hours
of training, The average Swedish worker 170.  The average Canadian
worker receives only seven hours.  Statistics Canada reported that in
1987 only 5.3 percent of the working population received training of any
kind... 
     ...In some industries, businesss and labour are beginning to work
together to address these issues.  The Canadian Steel Trade and
Employment Congress, the Sectoral Skills Council of the electrical and
electronics manufacturing industry, and the Auto Parts Council are three
examples of how labour and industry are building partnerships and
stepping up to some of these training and development issues together. 
The federal government has belatedly begun to make funding available for
these important bodies. 
      At the national level the Canadian Labour Force Development Board
is a labour-management body that now helps shape several billion dollars
in federal UIC-account training funds.  The Canadian Labour Market and
Productivity Centre is another example of a national body where industry
and labour work together on national economic issues.  To achieve our
objective of a full employment economy, we will build on and deepen
these existing initiatives and resources; bring together the players
involved in education, workforce training and continuous learning, and
work to get Canadians to pull together to improve our country's
performance in this area. 
     Our plan includes a series of measures to address these issues:
     A refundable training levy, phased in over the course of the next
Parliament. 
     When fully implemented this levy will require employers with more
than 10 employees to invest in a company-based training and development
program, or to pay a sum equivalent to 2 percent of their payrolls to
the federal government. 
     This levy is a simple but effective means to lever more investment
into training.  Companies will be able to offset the levy by
demonstrating that they have set up a labour-management committee to
oversee a company training program, and by reporting the sum they have
invested in workforce training and development annually.  Each dollar
spent on training will offset a dollar that would have otherwise be
payable under the levy. 
     The levy will be phased in over four years to allow firms to gear
up training programs, increasing in increments of 0.5 percent of payroll
per year. 
     The refundable training levy will create a "minimum training
obligation" in every medium and large Canadian firm.  Funds raised by
the government from the levy will be earmarked for publicly-financed
training. 
     Canada's networks of colleges, technical institutes and other
educational institutions are important partners for labour and
management undertaking new training initiatives triggered by the
training levy. 
     In 1989 employers managed payrolls totalling approximately $350
billion.  A 2 percent training levy would have directed some $7 billion
towards workforce training--still below the level of investment by many
of our trading partners, but a sound base for helping to construct a
"training culture".  Fairly distributed, this level of new investment in
training and development will provide every Canadian worker with five
days of training a year. 
     Although this measure is principally designed to bring about an
important structural change in our economy, it is an effective jobs
program, since it will trigger a demand for teachers and trainers in
industry.  This will create an ideal opportunity for older workers with
priceless experience and skills, as well as for young teachers who
currently face a tough job market in a time of declining school
enrollments. 
     Building on the examples of the Canadian Steel Trade and Employment
Congress, the Sectoral Skills Council of the electrical and electronics
manufacturing industry, and the Auto Parts Council, we will work with
business and labour to establish joint labour-management sectoral
training councils for each major Canadian industry. 
     Co-ordinated by the Canadian Labour Force Development Board, these
sectoral training councils will design guidelines and provide extension
sevices for workplace training programs in individual companies.  These
boards will therefore have a direct role to play in improving the
quality, common standards, and cross industry and interprovincial
portability of training. 
     They will also provide another forum for government, labour and
management to broaden their partnership in the cause of building a full-
employment, value-added and high-skill economy, and add another
dimension to identifying and filling out industrial "clusters". 
     Under our plan, the federal government will invest up to $20
million a year to cover the administration costs of these councils. 
     [Our plan will create] a National Council on Continuous Learning. 
     This council will invite provincial and territorial governments,
educators, business and labour to come together to examine issues such
as core curriculum in Canadian schools, literacy programs, education
techniques, computerization, and other issues. 
     Under our plan, the federal government will invest $10 million a
year to fund this Council. 
     For many young people, lack of experience poses a major obstacle to
joining the work force.  The federal government will work with provinces
and territories to create a cost-shared program that gives young people
useful job experience.  Young people could be assigned to work in
industry, community enterprises and social service agencies, and to take
part in environmental programs such as tree planting, recycling, and
energy audits.  This youth service will provide opportunities for young
people, and also for older adult mentors. 
     We will release details of this community youth service in a
separate document. 
     Under our plan, the federal Department of Employment and
Immigration will set up a long-overdue state-of-the-art national
electronic jobs matching system.  Job seekers and vacancies will be
posted electronically at Canada Employment Centres, matching workers
with potential employers across the country. 
     This system will bring the federal government's employment centres
into the 21st century, improving their ability to match jobseekers to
jobs, helping to identify skills shortages, and reducing paperwork and
waiting time at centres. 
     Under our plan, we will restructure the Pathways to Success Program
to recognise the principle of aboriginal self-government, the need for
adequate resources, and the need to link training to economic
development.  We will increase funding for this program by $50 million
per year.