Supercluster defends against critical report

The Parliamentary Budget Officer recently found flaws with the research projects, including Protein Industries Canada

Protein Industries Canada remains confident in its pace of funding projects to grow the sector, despite a recent report from the Parliamentary Budget Officer.

The PBO reported that the governing Liberals 2017 Innovation Superclusters Initiative has been slow to select projects and spend money. In 2017, five superclusters were given a total of $918 million to spend over five years on collaborative research.

One of the superclusters created was Protein Industries Canada.

According to the federal government, the prairie-based supercluster was set up to “use plant genomics and novel processing technology to increase the value of key Canadian crops, such as canola, wheat and pulses that are coveted in high-growth foreign markets, such as China and India, as well as to satisfy growing markets in North America and Europe for plant-based meat alternatives and new food products.”

The federal government says Protein Industries Canada would add more than $4.5 billion to the gross domestic product over 10 years and create more than 4,500 jobs over that same time span.

Overall, the Liberals claim the superclusters will create 50,000 jobs and increase GDP by $50 billion over 10 years.

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

Based on current estimates, the report says 355 projects would need to be selected in order to meet spending targets while still falling short of the job and GDP targets.

“PBO estimates that if supercluster partners spend all the money that has been announced, roughly 27,000 direct jobs would be created as a result. However, the nature of these jobs, whether they will be full-time, part-time, permanent or temporary, is unknown at this point,” said the report, released Oct. 6. “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 data and the analysis of the report was based on information gathered prior to the COVID-19 pandemic.

Bill Greuel, chief executive officer of Protein Industries Canada, says the report shows only a snapshot in time.

“The data and information used to pull that report was drawn on March 6, so I don’t think it took into consideration the progress Proteins Canada has made in the intervening time frame,” he said, “If you think about the lifecycle of our organization, we only have a five-year mandate, so seven months in the life of a supercluster that has a five-year mandate is a significant amount of time.”

According to Greuel, Proteins Industry Canada has invested $99.9 million into 14 active projects, while leveraging $172 million from industry in doing so.

“I personally don’t think that our pace was slow, when you balance off a need for due diligence and wanting to find the right projects,” he said. “If you think about the five-year mandate that we have, we’re right where we want to be in terms of approved projects.”

He said it was “unfortunate” the PBO didn’t reach out to individual superclusters to receive the most up-to-date information, noting that there was a seven-month gap between the information gathered and report’s release.

“You have to balance a little bit of due diligence and funding the most amount of projects that will lead to job growth and GDP numbers that we want. We’re looking at doing collaborative research and trying to build out large scale science and innovation projects that address the biggest issues facing the value-added processing sector, and that takes time.”

Greuel said the pace of some of the research being done by the supercluster has slowed as a result of the COVID-19 pandemic, but said they remain on track to meet 2023 timelines.

About half of the investments made by the supercluster have come since the middle of March.

“That’s a really strong indication of the strength of the sector,” he said.

Conservative party agricultural critic Lianne Rood said the Liberals are picking winners and losers by funding superclusters.

“Justin Trudeau’s supercluster program has just been a failure. Like too many Liberal promises, it’s more focused on buzz and words than actually supporting hard-working Canadians,” she said, saying it won’t grow the economy.

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