A researcher monitors data at a facility in Owen Sound, Ont., on Sept. 28, 2023.Nick Iwanyshyn/The Globe and Mail
Marc Johnson is professor of biology and Canada Research Chair in urban environmental science at the University of Toronto Mississauga. He is chair of the board of Support Our Science.
Canada massively under-invests in scientific training, research and development. We are falling behind in an increasingly competitive international landscape for developing talent and technology and capitalizing on innovation. This is hurting all Canadians, and only a major investment by the federal government can make up for lost ground.
In the past 20 years, Canada’s investment in R&D has steadily dropped as a percentage of gross domestic product (GDP). Over this same period, most G7 and OECD countries have increased R&D spending because research plays a major role in driving economic growth and solving societal challenges.
While the Trudeau government made a large investment in R&D in 2018, 19-per-cent inflation since then has all but erased these gains. Today, Canada invests just 1.55 per cent of GDP in R&D, which pales in comparison with peer countries such as the United States, which invests 3.46 per cent.
Governmental investments in R&D lead to large returns.Spending on training and research at Canada’s current rate of investment leads to an estimated annual rate of return of 30 per cent. This can be thought of as the total short-term return on investment, assuming innovations created from R&D have a useful lifetime of about seven years. That’s an impressive return that outpaces conventional investments, such as GICs that are yielding 5 per cent, the TSX that grew 8 per cent in 2023, or the S&P 500 that rose 24 per cent in the same year.
Through time, R&D investments lead to long-term growth in Canada’s economy. In fact, it is estimated that 7 per cent of our GDP ($160-billion in 2022 dollars) is derived from knowledge generated by research, science and technology. For every $1 we are investing in R&D, the economy is returning $4.52.
But Canada faces the reality that our stagnant approach to investing in training and R&D is jeopardizing the attraction and retention of talent. There are approximately 300,000 graduate students (doctoral and master’s) and postdoctoral scholars (researchers with a PhD) across this country. They work full-time conducting research while training to be leaders in technology, innovation and education. They tackle some of the world’s greatest challenges, including curing disease, mitigating climate change, designing electric vehicles, creating resilient economies and building livable societies.
Most research and innovation in Canada occurs at universities, where graduate students and postdocs outnumber professors by six to one. Graduate students and postdocs also outnumber federal scientists by seven to one. Without graduate students and postdocs, Canadian research and innovation would grind to a halt, and a pipeline of talent development would disappear.
Yet the Canadian government has not given graduate students a raise in over two decades, even with 54-per-cent inflation over this period. Since 2003, government scholarships for master’s degrees have remained at $17,500 a year. Doctoral scholarships have been stuck at $21,000 (”Postgraduate Scholarship-Doctoral”) and $35,000 (”Canadian Graduate Scholarship-Doctoral”) a year. Graduate students are also required to pay their tuition from these amounts, which further reduces their income. Meanwhile, the value of postdoctoral fellowships has only risen by just 12.5 per cent since 2003, to $45,000.
The government’s lack of increased funding for graduate students and postdocs has forced many young researchers into poverty. Lack of funding further places a filter on who can pursue higher-level training, selecting for individuals with external resources, such as wealthy parents, instead of selecting for talent and potential. The impact of our lack of funding for training graduate students and postdocs has passed the breaking point.
Canada’s poor investment into training and research is driving a massive brain drain of talent by the next generation of researchers. This exodus was under way before the COVID-19 pandemic, when a McGill study estimated that 38 per cent of all new PhDs from the social sciences and humanities left for other countries.
Shrinking compensation has pushed even more of our highly trained researchers out of Canada, and our investments in their training go with them, which I estimate costs our economy at least $740-million annually. In my own research group at University of Toronto, six of the past seven PhD graduates have left Canada for better jobs in the U.S.
The evidence is clear: The more we invest in the R&D system, the more we get back. So why is the federal government spending so little on research and training? While Canada watches the world go by, waiting for the inflationary storm to blow over, we are being left in the dust of countries more creative, industrious and ambitious.
Canada’s anemic approach to R&D is leaving large economic gains on the table to the benefit of other countries. Unless the Trudeau government invests now, it will have a long legacy of damage to Canadian society.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
