In the wake of last week’s federal budget, Canadian newspapers have been publishing a lot of material on the current government’s approach to research and development funding. I am a professional practitioner in this space: over the past half decade I have helped several clients manage R&D in the development of clean hydrocarbon fuel—an area of immediate relevance to Canadians’ day-to-day lives. I feel qualified to put forth some observations.
Chalk River nuclear lab, near Rolphton, Ontario. This is what successful government-funded applied research and development looks like. From this little patch of land, the mighty CANDU reactor was introduced to the world, along with medical isotopes that save lives every day all over the world. Don’t ever let anyone tell you government does not know how to pick winners.
First off, I should point up the central importance that government R&D funding has played in this effort. Federal funding has helped to defray the direct cost of research. My clients would simply not have embarked on this R&D if they had to pay all of it themselves. We are developing new chemical pathways to products that currently are produced using significantly different raw materials and processes. This requires research into chemical reactor design, catalysts, catalyst supports, and separations systems—not only as individual discrete subsystems but also as a coherent whole. This is process intensification, otherwise known as optimization.
An early strategic decision was whether to assemble a team of professional chemical engineers to attack the problem in an intensive burst, or to approach the individual discrete components piece by piece. The client made it clear up front that he was not going to try to outspend the “Bigs” in the industry: that is not only futile and impossible, it is also not smart. So he gave me a small budget and told me to figure out how to solve our research problems within that budget. Since a major component of R&D costs is researcher salaries, there was really no choice but to take advantage of government-funded R&D programs that pay university students, working under the supervision of their professors, to solve problems that industry partners take to them.
Some, not all, of the above-mentioned newspaper stories make it sound like the current federal government has changed its focus and is now demanding that research be tied to economic outcomes. I have never known any government R&D funding, federal or provincial, to not include this criterion. Perhaps that is because I have only gotten involved in programs whose explicit purpose is forming collaborations between academia and industry. These programs were not invented by the current government.
At the current stage of our R&D, this is perfectly appropriate. It directly addresses the client’s pressing need for information on materials and processes involved in inventing new pathways to existing products, and the tradeoff—we are essentially using government money to train students in our invented area—is acceptable. We are trading research efficiency for lower costs and longer timeframes. Provided we can grow the research effort into a going concern, this actually might work to our benefit: our researchers could well become our best qualified employees. In which case, everyone wins. We get professionally dedicated employees who know our process from start to finish, the university has successfully trained students into employees, and the government has created jobs.
All of this is an example of government-supported, industry-directed research. The programs we take advantage of were designed explicitly for these situations: the government put money into a broadly defined envelope—for example, clean hydrocarbon fuels—and industry accesses funds from that envelope to solve specific problems in that area.
As for research that is government-supported and government-funded, the meme practically everywhere is that this is bad, because government is not competent to pick winners. Ontario electricity, right this second, proves that to be laughably wrong. Right this second, nuclear reactors in Ontario are generating 9,242 megawatts of electricity—more than all the other generator types combined. It is also more electricity than Alberta’s entire system is generating.
Those 9,242 megawatts are not only running the province of Ontario, providing a stable supply that powers subways, streetcars, elevators, water pumps, schools, hospitals, steel mills, nickel smelters, petroleum refineries—everything that makes our modern society. They are also generating taxable revenue, and profit, for the companies that run them. One of these companies, OPG, is owned by the province. Its profits go into Ontario’s revenues, and help pay for health care and education.
Ontario’s nuclear plants are generating taxable revenue and profits not by selling their electricity at expensive prices. Nuclear power is cheap: only hydro is cheaper. And that is due to historical circumstances that stopped existing in about the 1950. The companies earn profits; we get cheap, reliable, clean electricity. It’s win-win-win, for the companies, the citizens of the province and country, and the environment.
Well, the nuclear reactors that are generating 9,242 megawatts in Ontario right now were designed and built in Canada. The design work was started in the 1950s, and it was entirely government-funded. This funding is often referred to as a subsidy; it is not. It was applied R&D, and it paid off handsomely. So government-directed, government-funded research can and does pay off.
There is a hidden payoff from that R&D, which goes well beyond electric power generation. That is in the area of nuclear medicine. Canada is the world leader in producing cobalt-60, a gamma-emitting isotope made at Chalk River and at several CANDU power generators. Co-60 is instrumental in helping protect Canada’s blood supply: it is used to sterilize blood prior to transfusion in infants and immuno-deficient patients, in order to prevent a lethal transfusion-associated disease.
Canada is also the world leader in producing molybdenum-99, whose decay daughter technetium-99 is hugely useful in medical diagnosis.
Medical isotopes are produced in the same reactors that anti-nuclear lobbyists say were subsidized. These isotopes are affordable today because the costs of making the reactors that produced them were borne by government-funded applied R&D programs, the object of which was to develop better ways to make electricity.
That R&D, as I have said, paid off spectacularly in a way you can watch in near real time. Check out Tables 1 and 2 in the left-hand sidebar. They give Ontario grid electricity sources in order of most to least important. As you will see, nuclear—which was the result of successful government-funded applied R&D—is always by far the biggest performer.
Medical isotopes are just a happy byproduct of that success. I wish all government-funded R&D had payoffs that extend so far through society. I am sure the efforts I am currently involved with will similarly pay off. If and when they do, I hope the payoff is as extensive as AECL’s has been.