New Innovation Agenda for Canada – Can the Federal-Provincial Policy Divide be Overcome?

August 31, 2016   |   Policy Debate

By Merli Tamtik

The federal government is emphasizing a new collaborative approach in building ‘an inclusive innovation agenda’ with the help of ‘Innovation Leaders’ – stakeholders from the business community to universities and colleges, the not-for-profit sector, social entrepreneurs and indigenous business leaders. A more focused and collaborative approach to support entrepreneurship and innovation is desperately needed, as recent policy reports show a continuing innovation under-performance in Canada compared to other OECD countries (see this and this).

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A major challenge for Canada is the federal-provincial policy divide that has characterized innovation policy for decades.  Canada has yet to solve the ‘coordination problem’ that creates inconsistencies and obstacles across governments, agencies, and policy sectors affecting productivity and innovation capacity.

How to Promote Policy Coordination?

Coordinated innovation policy has become a major public policy challenge for most governments, particularly in federal systems. The existence of a minimum of three vertical governance levels — cabinet, ministries, agencies — and at least two (and often more) horizontal levels between policy fields creates institutional complexity that is challenging to manage.

A lack of congruency between the federal and provincial governance systems leads to situations where information flow is fragmented or absent, program goals are conflicting, thus resulting in dying out of potentially promising ideas. This policy coordination challenge puts the inter-jurisdictional federal-provincial relationship at the core.

The discussion of policy coordination approaches in governments has tended to focus on the two main models for effective coordination: the ‘super-ministry’ approach and the ‘detached ministry’ approach. Both have associated benefits and challenges.

The coordinated, central vision promoted by a super-ministry would help to support coherence across policy sectors, secure significant investments towards nationally important priority areas and facilitate effectiveness by overcoming fragmentations across diverse programs pursuing similar objectives and targeting the same population.

At the same time, strong centralized political influence might decrease the autonomy of stakeholders and lead to loss of competence that would become a barrier for innovation. Furthermore, a concentration of governmental activities could exclude many actors and contexts that are important in the broader innovation policy domain and might lead to a growing gap between economically powerful and weaker parts of the country.

A detached ministry approach emphasizes more inclusive networked-centered policy making where government plays a facilitator role. A major advantage of this approach is the recognition of innovation as a non-linear activity that occurs without strong government regulation or control, but rather results from institutional synergies that emerge naturally.

On the other hand, lack of resources and a tendency to stick with historically strong, established sectors might also happen. Moreover, this may lead to fragmented visions, duplication of programs, and uncertainty regarding broader innovation goals.

Many have emphasized the importance of policy learning. As innovation often emerges in non-linear ways, ‘learning-through-interacting’ becomes crucial. Nilsson and colleagues state that everyday policy-making is part of a long-term process of learning and strategizing, in which common views and political coalitions are constantly formed.

Learning-centered approaches provide a realistic alternative to radically changing the existing system, and lead towards dialogue and trust among government policy experts.

Options for Canada

As the government is collecting input to inform the innovation policy agenda, here are some issues to consider about the pressing challenge of policy coordination:

  • A clear mechanism for inter-jurisdictional policy coordination is needed.

As policy coordination is a social process of communication, learning and networking, Canada needs a forum where such learning-centered communication can happen. This forum should bring together middle level policy makers across different policy sectors and government levels. The goal is to share experiences, best practices and enhance complementarity across government initiatives. One example of such an initiative is the Canadian Science Policy Conference, a forum dedicated to build a bridge between policy experts, academia and industry representatives. Yet, a more focused approach is needed to make vertical policy coordination between different government levels a priority.

An international example of mutual learning initiatives for policy coordination is the Open Method of Coordination facilitated by the European Commission. This initiative uses benchmarking, action plans, and an exchange of best practices that has led to the identification of common challenges and useful policy approaches at the EU level (see this and this). That approach could provide a useful example for Canada.

  • Focused activities related to policy coordination need greater awareness within the government apparatus.

A set of indicators with clear goals related to policy coordination should be created, as these currently do not exist. Measuring coordination is possible through patterns of actor interactions, redundancies reduced and reflective analysis conducted of the previous policies to enhance learning capacity (see this).

  • Innovation policy needs a stronger and sustainable organizational structures within federal and provincial governments.

The departmental structure for science and technology has kept changing over decades and this lack of continuity has impacted institutional memory. At the provincial level, the Ontario innovation agenda has been the responsibility of several ministries (Ministry of Research and Innovation, which became part of the Ministry of Economic Development and Innovation) with limited coordination between research and innovation policy and higher education policy. In other provinces the situation can be different. For example, in Alberta the Minister of Enterprise and Advanced Education has a cross-sectorial mandate over post-secondary education with expectations to develop research programs with industry.

Hopefully the New Innovation Agenda can provide a mechanism for increased awareness of federal-provincial relationships and work towards collaborative approaches toward innovation.

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