Innovation, Science, and Economic Development Canada informed organizations receiving money through the Strategic Science Fund late last month that it will cut $20-million from the $800-million fund as a part of the government’s plan to reduce spending. 

The decision affects 17 of the 19 organizations that will be funded until 2028-29 and have had contribution agreements in place since May 2024, when the previous Liberal government announced the recipients of the money.  

Contribution agreements are legally binding documents. They detail how much money the government will provide to an organization, in addition to prescribing how it must be spent and the outcomes that are expected from a program in exchange for the money. 

Cate Murray, president and CEO of the Stem Cell Network, told The Hill Times that her organization will lose more than $1-million dollars of the $48.48-million it was supposed to receive between the 2024-25 and 2028-29 fiscal years. 

She said she was “surprised and disheartened” by the decision and that her understanding was that the comprehensive expenditure review was designed to find inefficiencies in government.

“We did not believe that it was meant to flow through to recipients like us. Our organizations are all on the front lines of working with biotechs, with developing next-generation talent, supporting patients, [and] building science culture and education. I’m not sure how this happened,” said Murray, whose organization helps biotechnology researchers and companies move regenerative medicine across the research and development spectrum from the lab to patient use. 

On Feb. 26, Strategic Science Fund beneficiaries received an email from Andrea Smith, assistant director general at Innovation, Science, and Economic Development Canada (ISED), saying that the government approved a $20-million reduction to the fund. That cut will be applied in 2028-29, the final year of funding for this cohort. 

Calling it “disappointing news,” she added that the amount is a “relatively limited reduction”—2.26 per cent—of what each participant is receiving between 2024-25, the first funding year, and 2028-29. 

But Murray and Dr. Stéphanie Michaud, president and CEO of BioCanRX—which is also impacted by the decision—said that because the cut occurs in the final year, they will lose nine per cent of what they would have received in 2028-29. 

Smith’s email, which was obtained by The Hill Times, specifically attributed the decision to the federal government’s comprehensive expenditure review. 

The review officially launched last summer when Finance Minister François-Philippe Champagne (Saint-Maurice—Champlain, Que.) directed his cabinet colleagues in a letter to find savings that would escalate to 15 per cent by 2028-29. The goal was to spend less on the day-to-day running of government while investing in initiatives that would contribute to a stronger Canadian economy, CBC News reported last July.  

The review comes as Prime Minister Mark Carney’s (Nepean, Ont.) government is emphasizing defence spending and building an economy that is more independent from the United States in light of President Donald Trump’s tariff-focused trade policy. 

Dr. Monique Dubé, executive director of Braiding Knowledges Canada, said her organization, which funds Indigenous-led and co-led environmental research projects, will lose $700,000 in 2028-29, “which is not insignificant for an organization of our size.” 

The organization was awarded a total of $30.4-million in 2024. 

As for the potential impact, Dubé said she is having discussions with ISED about what the reduced funding means in terms of how she will be able to reassign funds to sustain the organization and its projects. 

“Because we fund Indigenous communities and the work that they are leading, we need to do some significant planning with a cut of that magnitude to make sure our communities and the work that they’re doing is not truncated or affected by the cuts,” Dubé said.

Projects funded by Braiding Knowledges Canada include those related to natural resource development, climate change, and the sustainability of important species and they’re “all done in the context of reconciliation and alignment with federal science priorities,” she said. 

Dubé said she was surprised and disappointed to learn of the funding cut, “but we also understand that we have a responsibility to align with federal priorities, and the global landscape is significantly changing.”

Situation isn’t ‘ideal,’ says Joly’s spokesperson

The Hill Times asked Industry Minister Mélanie Joly’s (Ahuntsic-Cartierville, Que.) office why it decided to make cuts to the Strategic Science Fund in light of the fact that contribution agreements had been signed with the recipients. 

Replying on the minister’s behalf, ISED said by email, “Some reductions are required as a part of the government’s general Comprehensive Expenditure Review. …The reductions will be applied in a way that minimizes the disruption to existing SSF recipients.”

The decision does not impact the government’s plan for the fund’s next call for applications during the 2026-27 year for the next round of funding between 2029-30 and 2033-34, the email states.  

In a brief phone conversation with The Hill Times, Joly’s spokesperson, Gabrielle Landry, said, “Although we’re facing a situation that is definitely not ideal, we’re still investing in research and science.” 

As examples, she pointed to the $1.7-billion announced this past December to attract international researchers to Canada, and announcements made this month that the National Research Council will receive $900-million for work connected to the newly launched Defence Industrial Strategy, and that $20-million will be invested in 33 new projects led by Genome Canada. 

Genome Canada, another recipient of Strategic Science Fund dollars, will also see a reduction in its final year of funding. A full list of the impacted organizations is published at the end of this article. 

Michaud said that though she understands the government is dealing with new geopolitical pressures, ISED’s decision to cut the Strategic Science Fund is “inconsistent” with the government’s current focus on funding science. 

BioCanRX will lose approximately $860,000 from its 2028-29 allotment. It was initially awarded $38-million over five years in 2024. The organization supports medical researchers developing cancer therapies in moving their discoveries into the clinical trial stage.

She said that while the cut funding amount may be seen as small, “it’s very meaningful” to an organization like hers. “We invest in biomanufacturing, we’re committed to made-in-Canada solutions, and so the kind of work that we do is very expensive to do,” she said.

Michaud said she will be looking for other sources of funding to cover the gap that will be felt in 2028-29.

“Does it distract the focus that we have? We have a very small team. Everybody’s working pedal to the metal,” Michaud said. 

Murray said the reduced funding will mean the Stem Cell Network will be funding fewer clinical trials and making cuts to its “Fueling Biotechnology” program, which supports startup companies working on regenerative medicine. 

She said her organization could possibly fund three to four fewer clinical trials, the combination of which would typically help approximately 60 patients receive access to new medicines. 

To highlight the impact of clinical trials, Murray told the story of a successful “world-first” trial in 2023 that was funded by her network. Focusing on pre-term infants whose lungs weren’t fully developed at birth and were at risk of developing a chronic lung disease called bronchopulmonary dysplasia, the babies were provided a new stem cell transfusion therapy. 

“There are now these wonderful little babies walking around Ottawa and Toronto who are meeting their milestones, whose families can go back to work, the babies can go off to preschool,” Murray said.  

Both Murray and Michaud said that in their years of working with not-for-profits, they’ve never seen a department backtrack on the terms of a contribution agreement in this manner though it is possible to do so. 

A department may intervene if officials feel money is being mismanaged or the recipient organization is not fulfilling the terms of its agreement, said Murray.   

Michaud said a contribution agreement allows for the re-opening of agreements but that the department’s decision to do so in this instance is “unprecedented” based on her experience.

Murray, Michaud wonder about fund’s future

As for the department’s assertion that the next Strategic Science Fund competition won’t be impacted by this decision, Murray has doubts, saying that she doesn’t think the program “will be properly funded into the future.”

For Michaud, this is another example of the government’s confusing messaging on funding science. 

“It’s inconsistent to cut existing contribution agreements and then be speaking at the same time about the next competition. And my question is, what is the message?” she said. 

Dubé said she is “confident” in the work that her organization does and feels that the cut is a temporary measure.

“Now, I just need to figure out how to manage [the cut] in a good way so that we can still be effective and position ourselves effectively for the next round of proposals,” she said. 

She told The Hill Times that her hope is that the federal government “actually look[s]” at the value that the funded organizations are providing in research that will strengthen the Canadian economy, and “can look beyond a 10-per-cent cut to everybody, everywhere, all the time” as it considers the launch of the next competition for the Strategic Science Fund. 

Murray said the only way to fix this situation is through a “political reversal.”

Michaud said she would like to sit with those working in government to determine a path forward: “How are we going to be able to bridge this and just to better convey the importance of this kind of work, the importance of the activities that are supported through the Strategic Science Fund program? I guess we have work to do with respect to communicating the value of this program.” 

tsanci@hilltimes.com

The Hill Times

Organizations Impacted by the 2.26-per-cent cut to the Strategic Science Fund: 

• Actua
• ArcticNet Inc.
• BioCanRx
• Braiding Knowledges Canada
• Canadian Association of Science Centres 
• Canadian Glycomics Network 
• Canadian Institute for Advanced Research 
• Centre for Aging + Brain Health Innovation 
• Council of Canadian Academies
• Genome Canada
• IQC Canada Inc
• Kids Brain Health Network 
• Let’s Talk Science
• MEOPAR Incorporated
• Mitacs
• Perimeter Institute for Theoretical Physics
• Stem Cell Network

SOURCE: Innovation, Science and Economic Development Canada

 

Tessie Sanci is a deputy editor at The Hill Times, where she focuses on federal health policy. She was previously the executive editor of Hill Times Health, and The Lobby Monitor, which are also a part of Hill Times Publishing. See all stories BY TESSIE SANCI