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 2026–27 Main Estimates still allocate research funding as if the central task is to maintain rough parity across the tri-council system.

The numbers are hard to square with the rhetoric: $1.62 billion for the Natural Sciences and Engineering Research Council of Canada (NSERC), $1.49 billion for the Canadian Institutes of Health Research (CIHR), and $1.41 billion for the Social Sciences and Humanities Research Council (SSHRC). Natural sciences and engineering, health research, and the humanities and social sciences sit within a few hundred million dollars of each other. That is a defensible allocation if the goal is fairness and balance across disciplines, but it is not the allocation the government would design if the goal is 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, 2025

In the United Kingdom, most core research council funding goes toward the natural sciences and engineering, while the humanities and social sciences receive a much smaller share. The United States is even more lopsided, with federal research funding dominated by health and biomedical research, while humanities funding sits at the margins. To be sure, recent political disruption to the US research system does not make it a model to copy. But it does not change the structural point: American humanities and social sciences funding has never occupied the same budgetary weight as health or science funding. Canada is different. It is the only one of the three that treats the major research buckets as roughly equivalent.

Canada’s near-equal split is a vestige of how the tri-council system was built. SSHRC 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. An SSHRC budget closer to $700 million would still leave Canada funding the humanities and social sciences generously by peer-country standards. That money would fund more work in the parts of the system most directly tied to industrial capacity, health innovation, and technology commercialization.

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. It does not mean that one-third of Canada’s strongest research opportunities sit in the social sciences and humanities, one-third in health, and one-third in the natural sciences and engineering. It means Ottawa has chosen to allocate money that way. 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. The Carney government should start by cutting the social sciences and humanities budget by 50 percent and allocating the money equally between NSERC and CIHR.

Appendix

Table 1: Distribution of research funding by field, 2025

Country	Natural science and engineering	Health and life sciences	Social sciences and humanities
Canada	35.9%	32.6%	31.5%
United Kingdom	70.6%	22.2%	7.1%
United States	16.4%	83.3%	0.4%

Sources:

▪ Canada:Figures are from the 2026–27 Main Estimates: NSERC, $1.62 billion; CIHR, $1.49 billion; SSHRC, $1.41 billion.

▪ 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, $8.17 billion. The health and life sciences bucket uses NIH commitments, $48 billion. The social sciences and humanities bucket uses NEH funding, $200 million. NSF’s Directorate for Social, Behavioral and Economic Sciences, approximately $320 million to $360 million annually, is included within NSF for data simplicity; reallocating it to the social sciences and humanities would raise the US SSH share from under 1 percent to roughly 1 percent. 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.