OTTAWA - As one of Canada's technology darlings faces tough times, the federal government is focused on finding their successor.

An expert panel is releasing a report today reviewing the $7 billion a year in taxpayers money spent on research and development.

An expert panel has concluded the federal government needs to put its mouth where its money is when it comes to encouraging businesses to innovate.

The year-long review of $5 billion in annual federal spending on research and development found the existing system is too complex and full of gaps, which make it hard for business to take advantage.

At the same time, the panel says the government needs to encourage businesses by measures as simple as buying Canadian-made products in order to encourage their development and establish a clear federal voice for innovation.

The panel, led by Tom Jenkins, spent a year reviewing the tax breaks and grants that support research and development across Canada.

The goal was to assess why Canadian businesses are lagging in innovation and productivity.

More than 228 submissions were made to the panel, which also met with 160 groups and surveyed 1,000 businesses.

"Together, we have come up with some very practical solutions that will ensure Canada unleashes its potential to be one of the world's innovation leaders," Jenkins said.

The recommendations include the simplification of existing tax credit programs and an overhaul of how research is overseen and organized.

The panel suggests that the current National Research Council system needs to be split between business focused and fundamental research focused collaborations.


Back when it was getting started, Research in Motion was on the receiving end of some of that money in order to get its now famous BlackBerry off the ground.

Gary Goodyear, minister of science and technology, says figuring out how to jumpstart more companies like RIM remains a complex challenge that touches on everything from tax structure to the willingness of Canadians to take risks.

He says he hopes the report -- whose recommendations can't include spending more or less money -- delivers some fresh ideas.

But the review comes at a time when the government is looking for major spending cuts and a spokesman for Goodyear wouldn't say whether research funding could be on the chopping block.