Editor’s note: This analysis has been revised to correct program budget figures, and to restate the argument and recommendation on a per-capita basis.

Canada says it wants an innovation economy. The research budget tells a different story.

The federal government has spent the past several years talking about productivity, domestic technology firms, AI, biomanufacturing, and quantum technologies as national economic priorities. Prime Minister Carney has tied his economic message to closing Canada’s productivity gap and building firms that can compete in strategic sectors. But the 2025–2026 departmental plans of the three federal research councils still send close to a quarter of federal research funding to the social sciences and humanities, a share well above what comparable countries allocate.

The numbers are hard to square with the rhetoric. Counting only what each council spends on research and training, and setting aside the CA$484 million Research Support Fund, which reimburses institutions for indirect costs across all three councils and is administered by the Social Sciences and Humanities Research Council (SSHRC) on their behalf, the 2025–2026 plans allocate CA$1.48 billion to the Natural Sciences and Engineering Research Council of Canada (NSERC), CA$1.33 billion to the Canadian Institutes of Health Research (CIHR), and CA$824 million to SSHRC. That leaves the social sciences and humanities with 22.7 percent of tri-council research funding. A share near a quarter is defensible if the goal is to keep every major field of inquiry funded at national scale, but it is not the allocation the government would design if the goal were to build industrial capacity in AI, biomanufacturing, quantum technologies, advanced materials, and other capital-intensive technology sectors. The Bouchard report pushed Ottawa to modernize the structure and coordination of the federal research support system, but the harder question is whether Ottawa will rebalance the money or keep praising innovation while preserving the existing split.

Of course, research in the humanities and social sciences deserves public funding. SSHRC supports work that helps a country understand itself and govern itself: law, public administration, history, language, culture, political institutions, social change, and the human consequences of new technologies. Some of that work feeds directly into regulatory capacity, public policy, and institutional competence. Some of it matters for reasons that have little to do with productivity, and that is fine. But the question is weight. When roughly a third of federal research council funding flows to disciplines whose contribution to productive industrial capacity is nonexistent or at best indirect, the budget is making a choice. 

Other countries fund the humanities and social sciences, but they do not ask every part of the research system to carry the same economic load. As figure 1 shows, Canada has divided the research pot in a markedly different way from other countries.

Figure 1: Distribution of research funding by field, FY2025–2026

On a per-capita basis, the gap is wide. Canada spends about CA$20 per person on social sciences and humanities research through its research councils. The United Kingdom, whose research system Canada’s most resembles, spends about CA$5, a gap of roughly four to one. The United States, counting the National Endowment for the Humanities and the National Science Foundation’s social and behavioural sciences directorate, spends roughly CA$2. To be sure, recent political disruption to the United States research system does not make it a model to copy, but it does not change the structural point either: U.S. social sciences and humanities funding has never carried the same budgetary weight as health or science funding.

The size of SSHRC’s share is a vestige of how the tri-council system was built. It was carved out of the Canada Council in 1977 and placed alongside NSERC, and later CIHR, as one of the country’s main research councils. Unlike the United States, where humanities funding sits in a separate cultural and civic institution, or the United Kingdom, where a full arts and humanities research council came much later, Canada gave the humanities and social sciences a seat at the same main table as natural sciences, engineering, and health research. That may have made sense as a settlement among disciplines. It makes less sense as the operating budget for a country trying to build firms in capital-intensive technology sectors.

That inheritance now has real costs. A dollar spent to maintain the existing balance is a dollar not available for the parts of the research system where Canada’s commercialization and industrial capacity gaps are most acute. Good research is rationed everywhere. Every year, strong projects in engineering, materials science, AI, oncology, clinical research, and biomanufacturing also lose out.

A serious rebalancing would reduce SSHRC’s appropriation over a multiyear period and redirect the savings to NSERC and CIHR, the councils most directly tied to commercialization, industrial research, and health innovation. The government could set the target at twice the UK’s per-capita rate, which is generous on purpose: Canada funds research in two official languages, carries obligations to Indigenous research that the UK does not, and has a legal and constitutional tradition no other country’s scholars will study on its behalf. Twice the UK rate is roughly CA$400 million. That still leaves Canadian social sciences and humanities research funded at more than double the level of a country with a comparable university system, and it frees close to CA$400 million for the parts of the system where Canada’s industrial capacity and health innovation gaps are most acute.

Some will object that this would leave excellent research in the humanities and social sciences underfunded. It would. But the current split should not be mistaken for a neutral measure of Canada’s research base. Nothing about the distribution of good project proposals across Canadian universities produces a 22.7 percent share for the social sciences and humanities. Ottawa chose that number, and it has held roughly steady while the government’s stated economic priorities have changed considerably. Plenty of excellent research is already left on the cutting room floor every year across all three councils. The current split only decides which pile of rejected good projects is larger. That is not a law of nature. It is a budget choice.

The softer alternative is to grow NSERC and CIHR without touching SSHRC. That is easier politics, but it still dodges the core issue. Canada can always say the answer is more money, and departments often do. But what should Ottawa do when the next dollar is scarce? New research spending competes with the Defence Industrial Strategy, rising health care costs, the Build Canada Homes initiative, major infrastructure projects, industrial subsidies, and debt servicing. Simply adding funding to NSERC and CIHR while leaving the inherited split intact would raise their budgets, but it would also leave the current settlement in place. Productivity would become an add-on to the system, not the organizing principle.

Canada has spent a decade saying it wants to be a technology and innovation economy. Its research budget says it wants to be a country that treats every discipline fairly. Both are defensible positions, but they are not the same position. If the first is the actual goal, the budget should reflect it. Cutting SSHRC’s research budget in half, to roughly CA$400 million, and splitting the savings between NSERC and CIHR would put Canada at twice the UK’s per-capita rate rather than four times it. That is where the Carney government should start.

Appendix

Table 1: Distribution of research funding by field, 2025

Sources

▪ Canada: Figures are from the 2025–2026 Departmental Plans: NSERC, CA$1.48 billion; CIHR, $1.33 billion; SSHRC, CA$824 million after subtracting the funding for the Research Support Fund which serves all three agencies.

▪ United Kingdom: Figures are from UKRI’s 2025–26 Budget Allocations Explainer. The natural sciences and engineering bucket combines EPSRC, STFC, BBSRC, and NERC core council allocations, totaling £1.91 billion. The health and life sciences bucket uses the MRC core allocation, £602 million. The social sciences and humanities bucket combines AHRC and ESRC core allocations, totaling £193 million. Figures exclude Research England, £2.36 billion in formula-based institutional block grants; Innovate UK, £948 million in applied innovation funding; Collective Talent Funding, £773 million in cross-disciplinary fellowships; and Cross-UKRI strategic programmes, £2.03 billion. These exclusions keep the comparison closer to Canada’s tri-council project-funding structure. Including Research England or Innovate UK would likely shift the UK distribution further toward the natural sciences and engineering.

▪ United States: Figures are from FY2025 appropriations. The natural sciences and engineering bucket uses NSF total funding, US$8.17 billion. The health and life sciences bucket uses NIH commitments, US$48 billion. The social sciences and humanities bucket uses NEH funding, US$200 million and the NSF’s Directorate for Social, Behavioral and Economic Sciences (roughly US$300 million). Figures exclude the National Endowment for the Arts, the Institute of Museum and Library Services, Department of Education research funding, and Department of Defense basic research, none of which have direct tri-council counterparts.

Errata

The prior version compared Canada’s three federal research councils using their total parliamentary appropriations. That comparison was inaccurate. SSHRC’s appropriation includes the Research Support Fund, a CA$484 million program that reimburses indirect research costs for institutions across all three councils and is administered by SSHRC only because the Tri-agency Institutional Programs Secretariat is housed there. Excluding it, social sciences and humanities research receives 22.4 percent of tri-council program funding rather than the 31.5 percent originally reported. Thanks to SSHRC for calling attention to the Research Support Fund.