Federal Funds and University Research

The federal government withdrew from the field of direct financial support of universities in 1967 under provisions of the new Act. Along with the full responsibility for university finance, the federal government transferred to each province certain tax revenues and a post-secondary education adjustment payment to bring the total financial transfer to at least 50 per cent of the allowable operating cost of post-secondary education. Costs allowable under the Act exclude capital costs, federal grants, student aid, and income for assisted, sponsored, and contract research. The federal councils and agencies continue to be the primary contributors to university research funds. The purpose of this note is to determine the current financial contribution of the government of Canada to university research. Much of the problem is its definition. To establish the framework for this definition, three sets of ideas are explored. These are: direct and indirect costs of university research, university research as an embedded activity, and the problem of relating university activity costs to incomes received from specific sources. These notions lead to formulae which yield divergent alternatives of the federal contribution depending upon the set of assumptions deemed appropriate. Much of the data needed for these calculations were gathered from primary sources and illustrate the application of the formulae for the four-year period 1966–70.