The Ford government plans to stop all funding to an institute that supports Ontario scientists at the cutting edge of stem cell research.

Provincial officials have told the Ontario Institute for Regenerative Medicine (OIRM) that its $5 million in annual funding from the province will cease next March.

The Toronto-based institute provides grants to help Ontario researchers turn their their stem cell discoveries into treatments that are both medically and commercially viable.

The government's decision to terminate the funding is "extremely short-sighted and uninformed," said Bernard Thébaud, a neonatal researcher who received funding from OIRM to explore the use of stem cells in preventing complications from premature birth.

"If [the government] would do a careful analysis, they would realize this is a worthwhile investment," said Thébaud, a senior scientist at the Ottawa Hospital Research Institute and professor of pediatrics at the University of Ottawa.

Bernard Thébaud, a neonatologist at the Children’s Hospital of Eastern Ontario and a senior scientist with the Ottawa Hospital Research Institute, says if the government would do a 'careful analysis' it would realize stem-cell research is a 'worthwhile investment.' (Canadian Lung Association)

His work has shown that stem cells isolated from the umbilical cord have the potential to prevent brain and lung damage in premature babies and promote healthy development of the organs as the children age.

"We believe this [research] could be a game-changer for these pre-term babies and could substantially improve their outcomes," Thébaud said Wednesday in an interview.

The funding to OIRM came from Ontario's Ministry of Economic Development and Trade. The minister responsible, Todd Smith, said the researchers can turn to the private sector.

"The previous government was throwing millions of dollars around like crazy and they were not holding anyone accountable as to how they were spending that money," Smith told reporters Wednesday at Queen's Park.

"What we've heard from the life-sciences sector is that a lot of these organizations don't actually need government money, that the private sector will step up," said Smith.

Todd Smith, Ontario's minister of Economic Development, Job Creation and Trade, says the private sector will step up and fund stem-cell research. (Vedran Lesic/Radio-Canada)

But scientists in the stem-cell field say the private sector is not willing to invest until their studies reach a late phase. To get there, they say government funding is crucial.

"We pick the really outstanding projects that have true potential and we fund them to the point where they can attract additional funding and then begin to move forward," said Duncan Stewart, president and scientific director of OIRM.

"Without a catalyst to kick-start the process, then it's not going to happen."

The scientists see a bitter irony in the government's move, since stem cell research was born in Ontario. James Till and Ernest McCulloch discovered the existence of stem cells in 1961 at the Toronto-based Ontario Cancer Institute.

"It's very deflating, it's very disappointing to learn that this is going to not continue," said Stewart.

"The concern is that many great ideas, great technologies that could have blossomed into successful new opportunities commercially and new therapies for our patients just aren't going to move forward."

Duncan Stewart, president and scientific director of the Ontario Institute for Regenerative Medicine, is hopeful the government can be persuaded to renew OIRM's funding instead of stopping it. (Mike Crawley/CBC)

Research funded by OIRM attracted a $225-million investment by pharmaceutical giant Bayer and venture capital firm Versant Ventures to create BlueRock Therapeutics, now headquartered in Toronto. The company aims to treat heart disease and degenerative brain diseases.

"We were very excited about what we were able to accomplish with relatively modest funding," said Stewart.

The institute was created in 2014, with a promise from the Wynne government of $25 million over five years.

Stewart said he is hopeful the government can be persuaded to renew OIRM's funding instead of stopping it.

"We have a year, and a year is a long time in politics," said Stewart.

"We're hoping to use that time to try to position ourselves to continue in some way. Unfortunately, we have no idea what will happen after that."