When Kirsty Duncan, federal Minister of Science and a former academic, stepped into her cabinet role 18 months ago one of her first questions to staff was simply, "How does this work?" By "this" she meant the mind-bogglingly complex system by which billions in tax dollars are turned into scientific discoveries in research labs across the country.

Now, a sweeping report has provided an answer to Ms. Duncan's question, and it can be summed up as: "Not nearly as well as it should."

The long-awaited review of Ottawa's science funding apparatus, commissioned by Ms. Duncan and unveiled on Monday, is described as the most comprehensive in four decades. And while that apparatus is mostly unseen and largely impenetrable to those who do not rely on federal research funds, it carries the lifeblood of Canada's scientific enterprise and its downstream benefits to innovation and commercialization.

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Led by David Naylor, a former president of the University of Toronto, the review panel dug deep into the minutiae of the multiple structures and organizations that distribute federal research dollars. But throughout the details of the report, there simmers an underlying urgency that suggests the government doesn't have time to waste in retooling a system that is lagging relative to global benchmarks.

"Everything is ultimately going to come down to knowledge and research in the decades ahead," Dr. Naylor said. "Either we keep up or we lose ground."

Given that context, it is not surprising that the authors of the report, mostly made up of research leaders and administrators, suggest the federal government is spending too little on science and would increase base-level spending by core funding agencies from $3.5-billion to $4.8-billion a year over a four year ramp-up period.

However, as per Ms. Duncan's instructions, the panel also paid attention to how the money is spent, not just how much. The result reveals an overly siloed research system that the panel calls "weakly co-ordinated" and "inconsistently evaluated," often to the detriment of younger researchers who are trying to establish their careers in a fast moving and competitive landscape.

"They are really finding it difficult in the present system," said Art McDonald, panel member and Nobel-prize winning physicist, who added that limited funding and low success rates on grant applications were taking a toll on an entire cohort of early career researchers.

"These are enthusiastic young people that should be our next generation of successful scientists and we need to be treating them somewhat better than we have been in recent times," Dr. McDonald said.

The federal government spends more than $10-billion on science and technology annually. About half that amount is directed toward so-called intramural research and regulatory science conducted in federal labs that fall under the purview of various ministries, including more than $1-billion a year for the National Research Council of Canada, and was not considered by the review panel.

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Instead, the panel concerned itself with the remaining half of federal science spending that is channelled through an assortment of organizations and third-party entities to researchers and facilities that are not directly part of the federal government. They collectively account for most of the basic science research conducted in Canada.

That network of funding bodies has grown into an increasingly diverse and intricate ecosystem, with successive governments adding more parts, usually with accompanying political fanfare but seldom with a detailed rationale for how the new elements will work with the old.

But rather than paring some of those parts away – at least in the near term – the report recommends the creation of more structure, including a senior-level advisory council that would ride herd over the entire funding framework.

Reporting directly to the Prime Minister's Office, the proposed National Advisory Council on Research and Innovation would be composed of 12 to 15 members, including prominent scientists and scholars. The new council would be given the task of reviewing and assessing all components of the funding system and weighing in before the government launches any new funding organizations and initiatives.

The review also recommends establishing an additional co-ordinating board to harmonize the efforts of the three granting councils (one for natural sciences and engineering; one for health sciences; and one for social sciences and the humanities) that currently distribute the bulk of federal grants to individual researchers at universities, hospitals and institutes across Canada. In addition, the panel recommends that the Canada Foundation for Innovation, a not-for-profit organization which supports research infrastructure, be given a consistent annual budget and form a fourth component of the co-ordinating board's mandate.

According to the review, the board should be chaired by Canada's soon-to-be appointed Chief Science Adviser, who would also serve on the National Advisory Council on Research and Innovation. Dr. Naylor said the panel members carefully considered the prospect of streamlining the system by combining the granting councils or other entities under one umbrella, similar to the approach recommended by a review of the British research system in 2015 led by geneticist Sir Paul Nurse.

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In the end, Dr. Naylor said, his panel determined that such a restructuring of the Canadian system would impose a high cost with uncertain rewards, while potentially placing those parts of the system that work well at risk and alienating communities of researchers that are served by the existing granting organizations.

"There are major losses to getting too aggressive in consolidating," Dr. Naylor said.

The report does advocate for a least one merger of two entities – CANARIE and Compute Canada – that provide researchers with digital infrastructure and access to high-speed computer resources.

It also makes clear that the new advisory council it recommends would replace the Science Technology and Innovation Council (STIC), which was created under then-prime minister Stephen Harper's government to provide confidential science advice and conduct public biennial reviews of the state of science in Canada. Former chair Howard Alper said he hoped those reviews will continue even if STIC is ultimately phased out. He added that the review panel's report was "an excellent beginning. But we need to be even more ambitious."

The report drew positive reviews from many researchers but also questions about potential challenges if it is implemented.

Paul Dufour, an Ottawa-based science-policy analyst, wondered if Ottawa had the staff and budget to support the recommended advisory council following years of neglect of science policy within the federal bureaucracy.

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Jim Woodgett, director of research at the Lunenfeld-Tanenbaum Research Institute in Toronto, said the notion that the council and co-ordinating board would be able to reform the system without serious backlash from turf-conscious bureaucrats "might be wishful thinking."

Other key recommendations by the panel include more funding allocated to independent investigator-led research instead of research dictated by government-selected priorities and an emphasis by the granting councils on high-risk/high-impact research.

During its review, the panel received 1,275 written submissions and heard from some 230 researchers during a series of cross-country roundtables.

Liisa Galea, a neuroscientist at the University of British Columbia who was among those who presented before the panel, said she was pleased to see panel recommendations related to gender inequities and diversity among research grant winners. "It's a huge issue that has been buried," she added.

Another presenter, Sarah Burch, who holds a Canada Research Chair in sustainability governance and innovation at the University of Waterloo, said she was gratified that the report stressed the importance of investigator-led inquiry "rather than continuing to privilege research that is specifically demanded by industry or government."

Alana Cattapan, a postdoctoral researcher at Dalhousie University who also spoke to the panel and who focuses on reproductive health and public policy, praised the report's attention to interdisciplinary research. Under the current funding system, she added, research such as hers often falls between the remit of health and social sciences granting councils. "The recommendations … resonated for me," she said.

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Paul Davidson, president of Universities Canada, said the review now provided Ms. Duncan with ammunition and an opening to move beyond that patchwork pattern, including recommendations that better reflect the increasingly collaborative and multidisciplinary nature of scientific research.

"It will be very hard for this document to end up on a shelf," he said. "We've got an opportunity to see real progress."

For scientists, that progress will have to include more funding, particularly for the granting councils which received a $95-million increase last year but no further increases in 2017. (This time around the budget prioritized funding for a new series of research chairs and a program to boost research in artificial intelligence.)

On Monday, Ms. Duncan told reporters that she would be reviewing the report together with other cabinet colleagues who oversee granting organizations.

"I think there are answers that we need," in the report, she said. "We value science and we will build upon the investments we've made over the last two years."

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Building the machine: The development of Canada's research funding system

1916: National Research Council founded. Government-directed research dominates.

1960: Medical Research Council is created as a spinoff from the NRC.

1967 – 1973: Lamontagne committee on science policy, chaired by senator Maurice Lamontagne, produces influential reports on organization, funding and comparative performance of Canadian research.

1971: Ministry of State for Science and Technology created. The department evolves and its influence waxes and wanes with successive governments.

1978: Natural Sciences and Engineering Research Council (NSERC) and Social Sciences and Humanities Research Council (SSHRC) are established based on Lamontagne committee recommendations.

1987: National Advisory Board on Science and Technology (NABST) formed to advise the prime minister. It is superseded by other advisory bodies, which are eventually replaced in 2007 by the current Science Technology and Innovation Council (STIC).

1989: Networks of Centres of Excellence created as a joint initiative of the three granting councils.

1989: Canadian Space Agency founded.

1997: Canada Foundation for Innovation established to support research infrastructure

1999: Genome Canada established as a not-for-profit funding organization to advance genomics research.

2000: Canadian Institutes of Health Research established to replace the Medical Research Council with a broader mandate.

2000: Canada Research Chairs program created.

2004-2008: National Science Adviser created and then eliminated.

2008: Canada Excellence Research Chairs program launched.

2014: Canada First Research Excellence Fund established.

2016: Federal government launches search for Chief Science Adviser and commissions comprehensive review of research-funding system.