Science and technology industry observers were of two minds about Tuesday's federal budget, praising its boost to high-tech infrastructure, but questioning the conditions placed on many funding programs and wondering why research grant programs are being cut.

The federal budget emphasizes infrastructure spending, money to be used to modernize old laboratories and equipment and to expand existing facilities. The biggest commitments were:

• $2 billion to repair and expand the facilities of post-secondary institutions.
• $1 billion over five years for a Green Infrastructure Fund focused on "sustainable energy" infrastructure such as modern energy transmission lines.
• $750 million to update research infrastructure for Canadian Foundation for Innovation projects.

Also as part of general infrastructure, the budget includes:

• $500 million to encourage the greater use of electronic health records.
• $250 million over two years for the maintenance of federal laboratories.
• $225 million over three years to develop and implement a strategy to extend broadband internet service to communities that don't have it.

The government also promised to spend $2 million to conduct a feasibility study on a High Arctic research station and $85 million over the next two years to upgrade existing research facilities in the north.

Ron Freedman, co-founder of research policy consultancy The Impact Group, said the emphasis on infrastructure was prudent, given many government and university facilities were in need of an upgrade.

"These are mostly one-time increases and not ongoing increases, which helps the government's bottom line," said Freedman. "But what they needed was to put money in that could help turn things around quickly, and I think in that sense it's a pretty well-rounded budget."

Freedman points to one much-awaited measure to aid small high-tech companies: the allocation of $200 million over two years to the National Research Council’s Industrial Research Assistance Program (IRAP), which has been unable to fund any projects since it ran out of money in May last year. It includes $170 million to double the program's contributions to companies, and $30 million to help companies hire over 1,000 new post-secondary graduates.

Computer upgrade tax break

Also aimed at helping businesses is a tax break for companies buying computer hardware and software systems before Feb. 1, 2011. The government expects the incentive to upgrade existing computers will cost $340 million in 2009-10 and $355 million in 2010-11.

Canadian Advanced Technology Alliance president John Reid said the stimulus package was a step in the right direction, but that the total amount needs to nearly double from the $34 billion committed.

"While we are pleased to see the government heading our call for economic stimulus, we need two more success ingredients," said Reid in a statement. "First, we need to treat this crisis with the same depth of concern as President [Barack] Obama, which for Canada means an investment of more than $60 billion. Second, we need to invest the funds in jobs for the future."

The budget also calls for $351 million in funding to Atomic Energy of Canada Ltd. for its operations, including the development of the advanced CANDU reactor, and $110 million over three years to the Canadian Space Agency to support the development of space technology, including advanced robotics, but neither of these contributions represents much more than allowing business as usual, said Freedman. The budget also calls for the space agency to trim $10 million from its existing budget doing more collaborative work with academia and industry, putting the net gain at closer to $100 million.

Provinces, municipalities challenged

While researchers in the university community were pleased with the government's commitment to infrastructure spending, they wondered whether the targets will be possible, given that the universities will be required to raise over half of that money through other sources, such as provincial and municipal governments.

"Provincial governments are facing serious fiscal restraints," said Canadian Association of University Teachers president Penni Stewart in a statement. "In light of the current economic downturn, it is going to be a challenge for universities and colleges to leverage support from the private sector. In short, there is no guarantee the money will actually be spent."

The CAUT also was unhappy with the government's plan, buried deep in the budget, to trim funds to the three main research grant councils by a total of $147.9 million over the next three years.

Some of those reductions are offset by some new spending, including the government's pledge to provide an additional $87.5 million over three years to temporarily expand the Canada Graduate Scholarships program.

But Pierre Noreau, the president of the French-Canadian Association for the Advancement of Science (ACFAS), said the budget was too focused on the short term and was missing the big picture of research spending.

"Infrastructure spending is OK, we need that, it is important for the research world," said Noreau. "But it's a very short-term decision. Yes, you need the building, but in the long-term you need people, and to get them you need to commit to work that may not have an immediate benefit."

$50M for Institute of Quantum Computing

At least one project the government announced funding for is geared toward the long-term, however. The government committed $50 million to the Institute of Quantum Computing in Waterloo, Ont., for a new facility and for staffing and operations.

The institute, founded in 2002 as part of the University of Waterloo with help from government and private contributions from Research in Motion co-CEO Mike Lazaridis, specializes in research and teaching in the field of quantum information, or the use of the sciences of quantum physics and nanotechnology to potentially transmit information through computers in ways far faster than existing circuitry allows.

Although the field is relatively young, it has already attracted interest in the computing industry for its potential to change the power and potentially reduce the size of computer chips.

Institute director Raymond LaFlamme said half the money will be used to build a new Quantum-Nano centre and the other half of the money will be spend to attract other researchers.