Questions raised about supercluster job creation and spending

The Office of the Parliamentary Budget Officer has released a preliminary review of the federal government’s five superclusters, originally rolled out in 2018.

The premise of the supercluster program was set out in the 2017 federal budget, where $918 million of government funds would be doled out over five years for five innovation clusters.

The initiative is aimed at bringing together public and private sectors on collaborative research, commercialization, and ultimately, job creation. Clusters are spread out across Canada, and cover digital tech, artificial intelligence, manufacturing, oceans, and protein — the one most directly tied to agriculture.

The overarching targets for the entire supercluster effort are to create of 50,000 jobs, increase GDP by $50 billion over 10 years, and “accelerate innovation.”

Following a request in February from Michelle Rempel-Garner, Conservative Shadow Minister for Industry at the time, the PBO has analyzed the results from the superclusters up until March of this year (prior to the COVID-19 shutdown).

The report, published October 6, says fund-spending and job-creation were well below what was targeted.

“Most of the federal spending to date relates to administrative and operating costs (59%), with the remaining distributed over 45 specific research projects (41%). In addition, some $97 million has been committed, but not necessarily spent, on the 45 announced projects,” the report says.

As of March, only about $30 million had been spent, though the projected number was $105 million for the 2019-2020 period.

In order to actually use the funds set aside for the supercluster program, the PBO estimates that the clusters would have to — very quickly — approve an additional 355 projects.

It’s estimated that about 27,000 direct jobs have been or will be created through the committed funds, the PBO report states. However, it’s not clear “whether they will be full-time, part-time, permanent or temporary.”

“Based on a review of the literature and the experience of other jurisdictions, PBO finds it unlikely that the objective of increasing GDP by $50 billion over 10 years will be met,” the report says.

The timing of the PBO’s analysis should be considered, at least in the case of the agriculture-focused protein supercluster, which has ramped up its funding commitments after the PBO’s reference period ended in March.

As of October 6, Protein Industries Canada says it has committed $99.9 million out of a total of up to $153 million pledged by the federal government to the protein cluster.

“We have another seven projects that are currently making their way through our project process. We are on track to meet our investment targets of having our funds fully committed by the end of this fiscal year,” says a statement forwarded by PIC.

Protein Industries Canada also says its operation and administration costs — at 11 per cent for the current fiscal year — are much lower than the overall estimates put forward by the PBO.

“At exactly the half-way point of our mandate, we have committed a significant portion of our available funds and are starting to see real results,” says PIC. “With our active projects we expect to see more than 225 new products, 77 new processes and 44 expected new IP filings.”

PIC also says preliminary analysis shows it is on track to exceed the targets given to the protein supercluster of creating $4.5 million in GDP and 5,000 direct and indirect jobs.

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