Return to flip book view

Research is my business partner: Annual Report 2019–20

Page 1

Research is my business partnerAnnual report 2019–20

Page 2

This report should be cited as:The Canada Foundation for Innovation, 2020. Research is my business partner: Annual report 2019–20 / La Fondation canadienne pour l’innovation, 2020. Mon partenaire d’aaires : la recherche – Rapport annuel 2019-2020 Ottawa, Ontario.© Canada Foundation for Innovation, 20201100-55 Metcalfe StreetOttawa ON K1P 6L5Telephone: 613.947.6496Email: info@innovation.caISBN: 978-1-926485-28-7ISSN: 1712-0608

Page 3

Research is my business partnerBusinesses across Canada innovate,grow and prosper when they build research partnerships inleading-edge labsFor small- and medium-sized enterprises, thecrux ofstaying competitive is strategic change.These trailblazers are rethinking previously accepted ideas to unlock new opportunities, reimagining how we do things to nd more sustainable, and more protable, solutions or reinventing the technologies we take for granted to make them more powerful andopen up new markets.And since the world is changing faster than ever, businesses that can evolve will rise to the top, and economies that support the research that fuels those transformations willbe the ones to ourish.Throughout this report, discover stories of Canadian companies that have found the path to business success by collaborating with world-class research labs.

Page 4

Contents3 OVERVIEWWhat we doHow we do itOur commitment to equity, diversity and inclusion 5 A YEAR TO BE GRATEFUL FOR STATE-OF-THE-ART RESEARCH6 RESPONDING TO COVID-198 INVESTJohn R. Evans Leaders FundCollege-Industry Innovation FundInnovation FundInfrastructure Operating FundMajor Science Initiatives Fund11 EVALUATE Analyzing corporate performanceTalking to our stakeholdersFocusing on resultsDeveloping a common classication system for Canadian research12 MANAGEFinancial highlightsReviewing our investment strategy and policyRemaining accountableGovernance19 COMMUNICATE23 LOOKING TOWARD THE FUTUREWhat we are working on for 2020–2125 FINANCIAL STATEMENTS2CANADA FOUNDATION FOR INNOVATION

Page 5

Since its creation in 1997 the CFI has committed, with the generous support of the Government of Canada, almost$8.3 billion for 11,314 projects at 160 research institutions in 78 municipalities across Canada.** As of March 31, 2020OverviewWhat we doResearchers need world-class research infrastructure to collaborate on the global stage. The Government of Canada created the Canada Foundation for Innovation (CFI) in 1997 to fund the tools essential for conducting outstanding research in the 21st century. We support the evolving needs ofCanada’s universities, colleges, research hospitals and non-prot research institutions across all areas of research — from health and medicine, to the natural sciences and engineering, to the social sciences and humanities — by funding state-of-the-art equipment, laboratories and facilities. Our objectives• Increase Canada’s capacity to carry out important world-class scientic research and technology development • Support economic growth and job creation, as well as health and environmental quality through innovation • Expand research and job opportunities for the next generation of Canadian researchers, technicians and entrepreneurs • Promote productive networks and collaboration among Canadian universities, colleges, research hospitals, non-prot research institutions and the private sector How we do itThe CFI maximizes the funding it receives from the Government of Canada by contributing up to 40 percent of a project’s research infrastructure costs. Institutions — the ultimate recipients of our funding — secure the remaining 60 percent through partnerships with provincial governments and other public, private and non-prot organizations. This means the nearly $8.3 billion invested by the Government of Canada through the CFI has been leveraged into a total investment of $19.9 billion in research infrastructure in Canadian institutions since we were created. We have a well-established, rigorous and independent merit-review process that rewards research excellence. We rely on experts from around the world to assess proposals from eligible Canadian institutions on three main criteria: the quality of the research and need for infrastructure; the project’s contribution to strengthening the capacity for innovation; and the potential benets of the research to Canada.Our process ensures that the infrastructure projects that best meet these criteria receive funding.ANNUAL REPORT 2019–203

Page 6

Our commitment to equity, diversity and inclusion Our values The CFI is committed to the principles of equity, diversity and inclusion (EDI). In all our activities, we recognize that a breadth of perspectives, skills and experiences contributes to excellence in research. EquityWe aim to ensure all CFI-eligible institutions have the opportunity to access and benet from our programs through our well-established, fair and impartial practices. DiversityWe value attributes that allow institutions and their researchers — from any background and from anywhere — to succeed. This includes individual attributes such as gender, language, culture and career stage; institutional attributes such as size, type and location; and attributes that encompass the full spectrum of research, from basic to applied and across all disciplines. InclusionOur corporate culture encourages collaboration, partnership, contributions and engagement among diverse groups of people, institutions and areas of research to maximize the potential of Canada’s research ecosystem. We believe that nurturing an equitable, diverse and inclusive culture is the responsibility of everymember of the research ecosystem, including funders, institutions, researchers, experts and reviewers. 4CANADA FOUNDATION FOR INNOVATION

Page 7

Roseann O’Reilly RuntePresident and CEOIngrid PickeringChair of the BoardA year to be grateful for state-of-the-art researchThis year began on a celebratory note as we launched a new competition of our agship fund, the Innovation Fund, the goal of which is to keep Canadian research at the forefront, ready to address the most pressing global challenges. It ended with a stark example of why it is so criticalto do so. The global coronavirus pandemic of 2020 underlined the importance of keeping laboratories equipped and ever-ready.That importance reached across disciplines. Vaccine researchers in laboratories all over the country doubled down, as did those with expertise in the social and policy implications of the countermeasures used to contain the spread of the virus. Researchers in psychology oered innovative ways to maintain mental health during a stressful time; leaders in education technologies extended new options to parents and schoolboards scrambling to continue teaching students from a distance; material scientists and engineers retooled laboratory equipment and helped industry to produce much-needed medical supplies. Trying times remind us to be grateful. That these laboratories had been established and were ready to perform under the most urgent circumstances is a reection of the importance of science globally in the 21st century. It made us glad to live in Canada, a country that knows the importance of research. That we live in a time where we reap the rewards ofrapid technology development to stay connected, working and healthy was another silverlining. In February and March, as the world’s laboratories mobilized to nd solutions, the critical role of the CFI was clearer than ever.This work will undoubtedly continue for many years to come, as researchers grapple with the fallout of the pandemic and how it has changed us all. It is not just a matter of recovering. This experience has also opened our eyes to many challenging and interesting new areas of inquiry. That is the beauty and the essence of research — as we discover more, we open the door to new concepts, new ways to serve humankind today and in the future. At the CFI, we understand that a research community that reects equity, diversity and inclusion brings us much closer to those goals.We look forward to the important ndings and inspiring possibilities that new research and knowledge will provide.ANNUAL REPORT 2019–205

Page 8

July 15A second Exceptional Opportunities Fund competition launches to invest $2million in research related to COVID-19 at colleges, polytechnics and Cégeps.June 8The CFI launches a competition to invest up to $25million from the Exceptional Opportunities Fund to support COVID-19-related research from all disciplines at Canadian universities andresearch hospitals.April 3 The CFI provides up to $5 million to optimize the research services oered by VIDO-InterVac to the national research community working against COVID-19.March 24The CFI’s Board of Directors meeting shifts from in-person to videoconference for the rst time ever.March 23Prime Minister Justin Trudeau announces more than $11 million from the Major Science Initiatives Fund to support the operation of VIDO–InterVac in their eort to nd a vaccine for the novel coronavirus.March 20The CFI makes provisions to allow salarysupport for research personnel who are temporarily redeployed from CFI-funded infrastructure to support COVID-19 research.March 16The CFI’s downtown Ottawa oce closes and CFI sta begin working remotely. Late FebruaryCFI’s programs sta begin to recongure 91 expert committee meetings involving 349 experts from 23 countries for the 2020 Innovation Fund competition, keeping the 400-million-dollar competition on track for November 2020 Board decisions, while maintaining the integrity of the review process.January 22 The University of Saskatchewan’s CFI-funded Vaccine and Infectious Disease Organization-International Vaccine Centre (VIDO-InterVac) receives approval from the Public Health Agency of Canada to work on COVID-19 allowing Canada to join the global research and development eorts coordinated by the World HealthOrganization.Responding to COVID-19As the COVID-19 pandemic took hold, the CFI took action to ensureCanadian research labs would remain at the forefront6CANADA FOUNDATION FOR INNOVATION

Page 9

Rening sparkling winesOntario winemakers are using innovations from Brock University to be more competitiveBrock University’s Cool Climate Oenology and Viticulture Institute conducts research to help winemakers in the Niagara peninsula overcome the challenges posed by the region’s geography and climate, including helping Fielding Estate Winery, where Heidi Fielding is Director of Sales and Marketing, grow its sparkling wine sales by30percent.ANNUAL REPORT 2019–207

Page 10

projects528million$97.9millionup to$400projects14 million$10.2InvestBringing the world’s best researchers to Canada, and keeping them hereJohn R. Evans Leaders FundThe John R. Evans Leaders Fund helps institutions attractand retain world-leading researchers with competitive research support packages that include key infrastructure and a portion of operating and maintenance costs. This year, we awarded more than $97.9 million to support 528projects. Supporting business innovationCollege-Industry Innovation FundThe College-Industry Innovation Fund (CIIF) helps colleges foster strategic partnerships with the private sector. Stream 1 of this fund supports infrastructure requests aimed at enhancing existing applied research and technology development capacity in colleges. Stream 2 supports research infrastructure associated with an application for a ve-year grant from the College and Community Innovation – Innovation Enhancements program, which is managed by the Natural Sciences and Engineering Research Council of Canada. This year, we awarded more than $10.2 million to support 14projects through both CIIF streams. Big ideas, big impactInnovation FundWe launched our latest Innovation Fund competition inApril 2019. For this competition, the CFI will invest up to $400million in capital funding and $120 million in associated operating costs through the Infrastructure Operating Fund. In January 2020, we received 307proposals requesting $1.1 billion for this competition. Bythe end of the scal year in March, we had to recongure our merit-review process to ensure we could maintain the integrity and high standard of excellence that form the foundation of this process while CFI sta and experts worked remotely because of the pandemic. 8CANADA FOUNDATION FOR INNOVATION

Page 11

million$32.4Keeping things runningInfrastructure Operating FundWe awarded over $32.4 million through the Infrastructure Operating Fund, which provides funding equivalent to 30 percent of CFI capital awards to assist institutions in the operation and maintenance of CFI-funded infrastructure. Supporting major research facilitiesMajor Science Initiatives FundThrough our Major Science Initiatives Fund, we help make sure that 17 national research facilities have the support they need to operate optimally. Whether physical spaces or virtual networks, these facilities serve a critical mass of researchers tackling important issues facing society, from climate change to cancer. They also act as hubs to bring together some of our country’s best researchers and to foster international scientic collaborations. As the challenges facing scientists become more complex, this major science infrastructure becomes critical for exploring the frontiers of research. This year, following a formal review, we extended funding for 15 of these facilities to March 31, 2023. The CFI will also fully support the operations of the Advanced Research Computing (ARC) platform, through Compute Canada, until the end of March 2022. ARC is one of the key elements of the Government of Canada’s Digital Research Infrastructure (DRI) strategy. Starting April 1, 2022, funding for the operations and maintenance of the ARC platform will transition to that strategy. The DRI strategy represents a signicant evolution in strengthening Canada’s capacity for advanced research computing and research data management. In addition to providing uninterrupted access to ARC’s computing resources for researchers and their students, the CFI funding until 2022 will also ensure that Compute Canada continues to participate in strategic planning during the transition period so the national DRI system is well-positioned to succeed.ANNUAL REPORT 2019–209

Page 12

Reinventing kiteboard equipmentA British Columbia kiteboard manufacturing company has set a newbar for kiteboard technology withan innovative product, nowlicensedinternationallyVictoria-based kiteboarding company Ocean Rodeo, where Richard Myerscough is CEO and Founder, increased its sales by working with experts at Camosun College to create strongerplastic control bars that could better withstand the force of wind andthe torque of performing tricks.10CANADA FOUNDATION FOR INNOVATION10

Page 13

Evaluate Analyzing corporate performanceWe are committed to remaining publicly accountable and one way we did that in 2019–20 was by reviewing and updating our 2015 Performance evaluation, risk and audit framework. We revised it to better align with our 2019 Contribution Agreement with the Government of Canada. It now includes new indicators of success, such as tracking the participation of underrepresented groups including women, indigenous people, visible minorities and people with disabilities inourfunding programs.Using this framework, we draft annual reports on the CFI’s performance, which are reviewed by CFI management and its Board of Directors. Early in 2019–20, Innovation, Science and Economic Development Canada (ISED) began an evaluation of the CFI to assess the eciency and eectiveness of our operations over the past ve years. This evaluation will draw on, among other things, data collected through the framework.Talking to our stakeholdersIn the spring of 2019, we surveyed a number of CFI stakeholders: administrators and researchers at institutions that are eligible for CFI funding, representatives from federal and provincial governments, and other funders and partners in the research community. This third biennial stakeholder survey included questions about the eectiveness and eciency of our activities and elicited views on the progress we have made in meeting our mandate. Among other things, we found that, in keeping with previous years:• 93 percent of respondents believe the CFI is valuable to science, technology and innovation • 87 percent of respondents are satised or very satised with how the CFI delivers its programsFocusing on resultsOver the past four years, we have been producing a series of reports to demonstrate how the CFI is meeting its objectives. Each “Focusing on results” report looks at one or more outcomes of CFI investments and relies on data from various sources, including the project progress reports we receive from the institutions we fund, interviews, focus groups, surveys and datafrom external sources, such as bibliometrics.In a study done this year, we examined how CFI investments have helped advance knowledge. We found that CFI-funded research infrastructure enables researchers to advance knowledge in all areas of research, and that studies acknowledging the CFI arecited more frequently than the global average.Developing a common classication system for Canadian researchThe Canadian Research and Development Classication provides Canadian researchers, research institutions and funding organizations a new way to categorize their work. The CFI has collaborated with the Canadian Institutes of Health Research (CIHR), the Natural Sciences and Engineering Research Council of Canada (NSERC), the Social Sciences and Humanities Research Council of Canada (SSHRC) and Statistics Canada on the initiative.It provides a common approach to classifying research across institutions and governments. Having one standard to classify research will make it easier to assess Canada’s overall contribution to any one eld or type of research, or to any particular socioeconomic challenge. The new classication system was completed at the end of scal year 2019–20. The CFI will be the rst to implement it in its awards management system in summer 2020.ANNUAL REPORT 2019–2011

Page 14

$0$100$200$300$400$500$600202020182016201420122010200820062004200220000.0%2.5%5.0%3.9%AVERAGE 3.3%Annual disbursements to institutions and operating expenses as a percentage ofdisbursementsManageFinancial highlights(For the year ending March 31, 2020)Since the CFI began:$8.8billionTotal amount committed in grants to the CFI by the Government of Canada, of which $6.1 billion has been received. The balance will be received infuture years, based on annual cash requirements. $8.3billionAwards approved $19.9billionInvestments of CFI contributions (typically 40percent of project cost) plus those from institutions and their partners (typically 60 percent)This scal year:$359.6millionTotal disbursements to eligible institutions $391.3millionAllocations received from the GovernmentofCanada$380millionAwards approved$13.9millionOperating expenses12CANADA FOUNDATION FOR INNOVATION

Page 15

49.1%CFI49.1%CFI12.4%Corporations/firms6.3%Federal government(departments or agencies)50.9%Partners0.2%Voluntary organizations6.1%Institutions, trust fundsor foundations6.4%Other0.7%Other governmental sources(municipal or foreign)18.8%Provincial governments(departments or agencies)41.7%CFI41.7%CFI12.1%Corporations/firms2.6%Federal government(departments or agencies)58.3%Partners0.3%Voluntary organizations11.2%Institutions, trust fundsor foundations4.3%Other0.2%Other governmental sources(municipal or foreign)27.6%Provincial governments(departments or agencies)CFI contribution and other funding sources since our inception: Total $19.9 billionCFI contribution and other funding sources for scal year 2019–20: Total $774.5 millionANNUAL REPORT 2019–2013

Page 16

Reviewing our investment strategy and policyOur Board of Directors’ Investment Committee, which oversees the management of the CFI’s investment portfolio, reviewed our investment strategy and policy in the fall of 2019. Our portfolio of investments is decreasing and will continue to do so in the coming months as funds transferred to the CFI from the Government of Canada in the early years are now almost entirely depleted. Since 2008, the CFI has been receiving funds from the federal government sucient to cover projected award disbursements to institutions in a given year. As a result, the CFI concentrates on more liquid investments and maintains an appropriate liquidity policy. Remaining accountableWe regularly visit recipient institutions to discuss their policies, practices, processes and controls for grant management over the lifecycle of CFI awards, and assess how well they are managing their CFI-funded projects. We use a risk-based approach to select institutions for these monitoring visits. This year, we conducted three visits and shared good practices institutions use for managing CFI funds. We also conduct contribution audits and other cost reviews of institutions to ensure they are using the funding they receive for a given project in accordance with the terms and conditions of the award agreement, and with applicable policies and guidelines. We performed contribution audits or other cost reviews on six projects in 2019–20. All projects with a CFI contribution exceeding $10million are automatically subject to an audit, and the risks associated to a project determine the scope, nature and extent of the audit activities. Institutions submit nancial reports for each of their CFI-funded projects at specic intervals, ranging from quarterly reporting to biennial reporting. We determine the frequency by the complexity and risk of each project. This year we received more than 950nancial reports from recipient institutions. These reports provide information on individual project costs, funding and timelines for the acquisition of the infrastructure. We reviewed each of these nancial reports to identify and address any issues.Ranges of remunerationCFI management (officers)Roseann O’Reilly Runte President and CEO $221,400 to $310,100Isabelle Henrie Vice-President, Finance and Corporate Services $146,800 to $203,100Pierre Normand Vice-President, External Relations andCommunications $146,800 to $203,100Claire Samson (eective March 2020) Vice-President, Programs and Planning $146,800 to $203,100EmployeesDirector, Programs $121,600 to $162,200Director, Communications Director, Corporate Services Director, Finance Director, Performance, Analytics andEvaluation$105,900 to $141,300Manager, Information Management/ Information TechnologyManager, John R. Evans Leaders FundSenior Advisor, Policy and PlanningSenior Programs OcersSenior Project Manager$96,300 to $128,100Manager, AdministrationManager, Creative ServicesManager, Human ResourcesSenior Financial Monitoring Ocer$86,500 to $115,000Analyst, FinanceFinancial Reporting AnalystSenior Business Intelligence DeveloperSenior Evaluation Analysts, Performance, Analytics and Evaluation$76,700 to $102,30014CANADA FOUNDATION FOR INNOVATION

Page 17

GovernanceBoard of DirectorsThe CFI Board of Directors is composed of a maximumof 13 individuals from a variety of backgrounds, each Director oering a unique perspective and understanding of the research community and bringing expertise from one or more of the private, institutional, academic and research sectors. The Government of Canada appoints six Directors (known as Governor-in-Council appointments), including the Chair, while CFI Members appoint the remaining Directors. Directors are nominated and appointed for three-year terms. Ingrid Pickering*, Chair Audit and Finance Committee, Governance and Nominating Committee, Investment Committee Margaret Bloodworth, Vice-Chair Chair, Governance and Nominating CommitteeCatherine Boivie*, Audit and Finance Committee, Investment CommitteeMicheline Bouchard, Chair, Investment Committee, Audit and Finance CommitteeLynda Brown-Ganzert* Governance and Nominating CommitteeJohn Kelly* Audit and Finance Committee, InvestmentCommitteeRonald Layden* Governance and Nominating CommitteeLeslie MacLaren Audit and Finance Committee, Investment CommitteeCecilia Moloney Governance and Nominating Committee Christopher Mushquash (appointed July 2019)Marc Ouellette Governance and Nominating CommitteeIan Seymour Chair, Audit and Finance Committee, Investment Committee Mamdouh Shoukri* Governance and Nominating Committee* Governor-in-Council appointmentANNUAL REPORT 2019–2015

Page 18

MembersThe Board of Directors reports to a higher governing body made up of our Members, who represent the Canadian public. Members nominate and appoint their fellow Members for ve-year terms. They meet in June each year and are responsible for appointing seven of the Board Directors, appointing external auditors, reviewing audited nancial statements and approving the annual report. Louise Proulx Co-Chair Emőke Szathmáry Co-Chair Lorne BabiukHarold Cook Members Governance and Nominating Committee Elizabeth DouvilleJoanne GassmanJack Gauldie Chair, Members Governance and Nominating CommitteeLinda Humphreys Marilyn Luscombe Members Governance and Nominating CommitteeRonald MorrisonPierre Richard Vianne Timmons Members Governance and Nominating Committee Luc VinetRemunerationDirectors opting to receive remuneration from the CFI are entitled to an annual retainer of $5,000. Committee Chairs receive $7,500, and the Board Chair receives $10,000. Directors are also entitled toreceive a per diem fee of $750 for attending Board or committee meetings and a $500 fee for attending acommittee meeting associated with a Board meeting. Members are not entitled to any remuneration. Members and Directors may, however, be reimbursed for any reasonable out-of-pocket expenses incurred while performing their duties or attending CFI meetings. In 2019–20, the remuneration of Board Directors ranged from $0 to $17,500.16CANADA FOUNDATION FOR INNOVATION

Page 19

Repairing the roadsThere’s booming demand for a Manitoba company’s product that transforms unpaved roads into smooth, durable surfacesWinnipeg’s Cypher Environmental , where Teaghan Wellman is Vice President of Research and Development, has a global market for itscatalyst that, when mixed with clay, creates a road surface that is resistant to ruts and potholes. To sell the product in Canada, the company partnered with Brandon University to prove it can withstand Manitoba winters.ANNUAL REPORT 2019–2017

Page 20

Repurposing the MRIA New Brunswick company is making its mark around the world by commercializing a new technology that uses Magnetic Resonance Imaging (MRI), typically a healthcare technology, to extract oil and gas more ecientlyGreen Imaging Technologies Inc. in Fredericton, which was co-founded by Jill Green, uses MRI software to analyse the behaviour of oil and gas inside rocks. The technique, developed in partnership with the University of New Brunswick and sold around the world, makes it possible to retrieve more oil and gas from every well, an eciency that translates to as much as$100,000 per day for one well for decades.18CANADA FOUNDATION FOR INNOVATION18

Page 21

Funding announcementsOnFebruary10,2020, at the Cégep de Trois-Rivières, the Government ofCanada announced $7 million for seven projects at six colleges through the College-Industry Innovation Fund. Jean-Philippe Jacques (with back to photo), director of the Cégep’s Innobre, Centre d’innovation des produits cellulosiques, displays samples of products made out of recycled pulp and paper. Looking on are (from left to right) Parliamentary Secretary to Minister of Innovation, Science and Industry (Science), William Amos; Pierre Normand, Vice-President, External Relations and Communications at the CFI; and Louis Gendron (face hidden), President ofCégep de Trois-Rivières. Other funding announcements held this year:• $2 million through the John R. Evans Leaders Fund to support three Canada Excellence Research Chairs, announced April 17• $160 million for the Major Science Initiatives Fund, including $40 million for seven nationally signicant facilities, held April 29 at the University of Saskatchewan’s Canadian Light Source • $12 million awarded to 17 research projects at colleges and polytechnics through the College-Industry Innovation Fund, held June13 at Georgian College in Barrie, Ont.• More than $4 million through the JohnR. Evans Leaders Fund to support 30Canada Research Chairs, announced June 14 at the University of Victoria• $61 million to support 261 projects at 40 universities through the John R. Evans Leaders Fund, held August 12, at the University of Alberta* Projects announced this scal year may have been approved in a previous scal year so amounts may not match those listed elsewhere in this report. New year, new blogIn January, our President and CEO, Roseann O’Reilly Runte launched a new blog, “innovision: Reections on research,” where she provides thoughtful comments on research, innovation and research policy and funding in Canada. Early posts touched on developing regional strengths through research, unconventional careers in science and working during a pandemic.Research is mybusiness partnerAt the beginning of 2020, we launched a promotional campaign — Research is my business partner — to highlight how small- and medium-size companies across Canada benet from partnerships in CFI-funded research labs. You can nd these stories throughout this report. We promoted these proles of successful collaborations between the private sector and publicly funded research online, in select publications and around Ottawa (above).CommunicateANNUAL REPORT 2019–2019

Page 22

Canada booth at the annual meeting of the American Association for the Advancement of ScienceIn February, we participated in the Canada booth at the annual meeting of the American Association for the Advancement of Science (AAAS) in Seattle, Washington. Led by the Oce of the Chief Science Advisor, MonaNemer (centre, in green), and supported by a number of organizations, the Canadian presence at this international conference aimed to highlight the benets of studying and conducting research in Canada for prospective students andresearchers from abroad. Photo: Cara MarshallAnnual public meetingRoseann O’Reilly Runte, CFI President and CEO(far left) moderates a discussion between EdMcCauley, President and Vice-Chancellor at the University of Calgary, and Marie-Josée Hébert, Vice-Rector of Research, Discovery, Creation and Innovation at the Université de Montréal, about the innovative ways their respective institutions are working to embrace collaboration across disciplines and engaging with the community. The keynote panel capped o our annual public meeting on December 3.Science MachinesScience Machines is a CFI-led outreach program that aims to provide young women opportunities to see rst hand the amazing tools scientists use every day. Tasheena (holding clipboard), Elan, Alexis and Aurora, members of the University of Regina’s Educating Youth in Engineering and Science (EYES) All Girls After School Club, and Chris Somers, biology professor at the University of Regina, look on as undergraduate researcher Linnea McClellan asks a suckersh to smile for the camera. At this Science Machines event on March 7 the girls used sh-tracking equipment to catch and tag sh through the ice of Saskatchewan’s Bualo Pound Lake. Photo: Natalie Selinger20CANADA FOUNDATION FOR INNOVATION

Page 23

Navigator highlights this year695 facilities across Canada 105 institutions 28 sectors of application 1,980 average monthly webvisitsMaking connections that matterThis year, the Research Facilities Navigator — theCFI’s online directory of leading-edge, publicly funded research facilities — helped create over 239connections between labs and potential partners from industry, academia andgovernment. Navigator facilities supporting Canada’s contribution to COVID-19 included: • VIDO–InterVac (research team above) is one of the largest and most advanced research facilities in the world working on animal and human infectious diseases. It is also part of the worldwide research eort to create a vaccine for COVID-19. • The Walker Advanced Manufacturing Innovation Centre produced 2,000 face shields using laser-cutting technology and computer design tools in their lab at Niagara College.• Researchers at SNOLAB in Sudbury, Ont., used their expertise in managing gas ow and gas handling to build a ventilator prototype.Photo: VIDO-InterVac, University of Saskatchewan#IAmInnovation Twitter contestTo highlight the work of a new generation of researchers, we launched our third #IAmInnovation Twitter contest in December and announced the winners in February. We asked contestants to submit videos or photos that demonstrate their work in CFI-funded labs andfacilities. The three winnerswere:• PhD candidate Nicole Lerminiaux of the Department of Biology at the University of Regina, who is discovering how our natural environment inuences antibiotic resistance in bacteria.• PhD student Alex Szojka of the Department of Surgery at the University of Alberta in Edmonton, who is developing lab-grown knee meniscus replacements for people with non-healing injuries to prevent development of osteoarthritis.• PhD student Anna Cooper Reed of the Institute of Health Policy, Management and Evaluation at the University of Toronto, who is exploring healthcare services for Canada’s aging population.ANNUAL REPORT 2019–2021

Page 24

Revolutionizing constructionA Quebec company has created a construction product that lets builders reachnew heights and gives the forestry industry a new way to make money and increase employmentTwo-hundred and fty of Chantiers Chibougamau’s employees — a quarter of its workforce — have jobs directly linked to a new line of engineered wood products for construction which are now sold internationally. The forestry company, where Frédéric Verreault is Executive Director, Corporate Development, partnered with FPInnovations to develop the products, which also opened up new building design and construction possibilities.22CANADA FOUNDATION FOR INNOVATION22

Page 25

Looking toward the futureWhat we are working on for 2020–21:• Making funding decisions for the 2020 Innovation Fund competition, with a budget of $400 million and an additional $120 million in support from the Infrastructure Operating Fund• Finalizing the consultation and launching the new Northern Research Infrastructure Fund, which will support research projects conducted by Northern institutions on issues relevant to Northerners• Using the lessons learned during the COVID-19 pandemic to explore an online review process for future competitions• Building on our commitment to support equity, diversity and inclusion in Canada’s research community with deliberate and meaningful actions• Evaluating how the College-Industry Innovation Fund meets the needs of colleges and their partners and identifying possible renements to the design or delivery of the fund• Planning the International Conference on Research Infrastructures, which the CFI will host in Ottawa in June 2021, to bring together stakeholders including policy experts, facility managers and leading researchers to discuss challenges and emerging trends for research infrastructures around the world • Continuing to work with the Fonds de recherche du Québec and the Ministère de l’Économie et de l’Innovation to understand the social, cultural and economic impact of research and research infrastructure funding on regions in Quebec• Growing the number of users of the Navigator and promoting it as a key resource in driving Canadian research partnerships and innovation• Continuing to show the return on CFI investments by sharing compelling stories— from increasing the capacity for bright minds to conduct research to providing spaces where the next generation of researchers can grow their careersRevolutionizing constructionA Quebec company has created a construction product that lets builders reachnew heights and gives the forestry industry a new way to make money and increase employmentTwo-hundred and fty of Chantiers Chibougamau’s employees — a quarter of its workforce — have jobs directly linked to a new line of engineered wood products for construction which are now sold internationally. The forestry company, where Frédéric Verreault is Executive Director, Corporate Development, partnered with FPInnovations to develop the products, which also opened up new building design and construction possibilities.ANNUAL REPORT 2019–2023

Page 26

Financial statementsIndependent auditor’s reportTo the Members of the Canada Foundation for InnovationOpinionWe have audited the nancial statements of the Canada Foundation for Innovation [the “Foundation”], which comprise the statement of nancial position as at March 31, 2020, and the statement of operations and statement of cash ows for the year then ended, and notes to the nancial statements, including a summary of signicant accounting policies.In our opinion, the accompanying nancial statements present fairly, in all material respects, the nancial position of the Foundation as at March 31, 2020 and its results of operations and its cash ows for the year then ended in accordance with Canadian public sector accounting standards for government not-for-prot organizations.Basis for opinionWe conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the nancial statements section of our report. We are independent of the Foundation in accordance with the ethical requirements that are relevant to our audit of the nancial statements in Canada, and we have fullled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.Responsibilities of management and those charged with governance for the nancial statementsManagement is responsible for the preparation and fair presentation of the nancial statements in accordance with Canadian public sector accounting standards for government not-for-prot organizations, and for such internal control as management determines is necessary to enable the preparation of nancial statements that are free from material misstatement, whether due to fraud or error. In preparing the nancial statements, management is responsible for assessing the Foundation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Foundation or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Foundation’s nancial reporting process.Auditor’s responsibilities for the audit of the nancial statementsOur objectives are to obtain reasonable assurance about whether the nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally 24CANADA FOUNDATION FOR INNOVATION

Page 27

accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inuence the economic decisions of users taken on the basis of these nancial statements.As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sucient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eectiveness of the Foundation’s internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signicant doubt on the Foundation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Foundation to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the nancial statements, including the disclosures, and whether the nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signicant audit ndings, including any signicant deciencies in internal control that we identify during our audit.Ottawa, Canada Chartered Professional Accountants June 23, 2020 Licensed Public AccountantANNUAL REPORT 2019–2025

Page 28

Statement of nancial positionAs at March 312020 2019$ $ASSETSCash 48,523,090 41,330,110 Interest and other receivables 1,546,530 1,364,230 Investments (note 4) 202,018,544 183,330,635 Prepaid expenses 368,664 188,040 Capital assets, net (note 5) 3,068,020 3,996,368 255,524,848 230,209,383 LIABILITIES AND NET ASSETSLiabilitiesAccounts payable and accrued liabilities 1,028,393 505,569 Deferred lease inducement (note 6) 625,781 695,962 International Conference on Research Infrastructures project deposits553,279 94,826 2,207,453 1,296,357 Deferred contributions (note 7) Expenses of future years 250,249,375 224,916,658 Capital assets 3,068,020 3,996,368 Total liabilities 255,524,848 230,209,383 Commitments (note 8) Net assets (note 9) — — 255,524,848 230,209,383 See accompanying notes ON BEHALF OF THE BOARDIngrid Pickering Ian Seymour Director Director 26CANADA FOUNDATION FOR INNOVATION

Page 29

Statement of operations Year ended March 312020 2019$ $REVENUE (note 7)Recognition of deferred contributions related toamounts granted to eligible recipients 359,593,581 386,098,462 Recognition of deferred contributions related tocurrent-year operations 12,842,624 13,191,013 Amortization of deferred contributions related tocapital assets 1,078,201 1,245,665 373,514,406 400,535,140 EXPENSES (note 12)Grants to eligible recipients 359,593,581 386,098,462 General and administration 12,842,624 13,191,013 Amortization of capital assets 1,078,201 1,245,665 373,514,406 400,535,140 Excess of revenue over expenses for the year — —See accompanying notes ANNUAL REPORT 2019–2027

Page 30

Statement of cash ows Year ended March 312020 2019$ $OPERATING ACTIVITIESExcess of revenue over expenses for the year — — Items not involving cashAmortization of capital assets 1,078,201 1,245,665 Amortization of deferred contributions relatedtocapital assets (1,078,201) (1,245,665)Loss on equipment disposals and write-os — 6,244Decrease of deferred contributions related toequipment disposal — (6,244)Net decrease in amortization of discount/premium on investments (251,429) (5,283,882)Net decrease in deferred contributions related to expenses of future years (365,967,283) (396,260,456) (366,218,712) (401,544,338)Net change in non-cash working capital balances related to operations (note 11) 548,172 1,221,912Cash used in operating activities (365,670,540) (400,322,426)CapitalPurchase of capital assets (149,853) (3,050,525)Increase in deferred contributions related tocapital assets 149,853 3,050,525 Cash used in capital activities — —Cash used in operating and capital activities (365,670,540) (400,322,426)INVESTING ACTIVITIESPurchase of investments (782,633,485) (452,104,887)Proceeds from disposal of investments 764,197,005 543,209,490 Cash provided by investing activities (18,436,480) 91,104,603 FINANCING ACTIVITIESGrants received (note 7) 391,300,000 330,700,000 Cash provided by nancing activities 391,300,000 330,700,000 Net increase in cash during the year 7,192,980 21,482,177 Cash, beginning of year 41,330,110 19,847,933 Cash, end of year 48,523,090 41,330,110 See accompanying notes28CANADA FOUNDATION FOR INNOVATION

Page 31

Notes to nancial statements 1. Description of businessThe Canada Foundation for Innovation [the “CFI”] was incorporated on April 25, 1997, under Part I of the Budget Implementation Act, 1997 [the “Act”] for the purpose of making research infrastructure grants to Canadian universities, colleges, hospitals and non-prot research institutions to increase the capability for conducting high-quality research. Grants received from the Government of Canada and related investment income are administered and invested in accordance with the requirements of the Act and the terms and conditions of the Funding and the Contribution Agreements between the CFI and the Government of Canada.The CFI is a non-taxable entity under paragraph 149(1) I) of the Income Tax Act(Canada).2. Summary of signicant accounting policiesThe nancial statements have been prepared by management in accordance with Canadian public sector accounting standards for government not-for-prot organizations and include the following signicant accounting policies:REVENUE RECOGNITIONThe CFI follows the deferral method of accounting for contributions that include grants from the Government of Canada and potential donations from other sources.Externally restricted contributions and related investment income are deferred and recognized as revenue in the year in which the underlying expenditures are incurred. A receivable is recognized if the amount to be received can be reasonably estimated and collection is reasonably assured. Externally restricted contributions applied toward the purchase of capital assets are deferred and amortized to revenue on a straight-line basis, at a rate corresponding with the amortization rate for the related capital assets.GRANTS TO ELIGIBLE RECIPIENTSGrants to eligible recipients are recognized as expenses as the disbursements of funds are authorized by management and all eligibility criteria are met.FINANCIAL INSTRUMENTSThe CFI records interest and other receivables, investments and accounts payable and accrued liabilities at amortized cost using the eective interest method of amortization. Cash is measured at fair value.Purchases of investments are recorded on the settlement date.Financial instruments recorded at fair value are grouped into Levels 1 to 3 based on the degree to which fair value is observable:• Level 1—fair value measurements are those derived from quoted prices [unadjusted] in active markets for identical assets or liabilities;• Level 2—fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly [i.e., as prices] or indirectly [i.e., derived from prices]; and• Level 3—fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data [unobservable inputs].The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A nancial instrument is classied to the lowest level of hierarchy for which a signicant input has been considered in measuring fair value.The nancial instrument recorded on the statement of nancial position at fair value is composed of cash and is listed as Level 1. ANNUAL REPORT 2019–2029

Page 32

CAPITAL ASSETSPurchased capital assets are recorded at cost while contributed capital assets, if any, are recorded at fair value at the date of contribution. Repairs and maintenance costs are charged to expenses. When a capital asset no longer contributes to the CFI’s ability to provide services, its carrying amount is written down to its residual value.Capital assets are amortized on a straight-line basis using the following annual rates andterms:Leasehold improvements Term of the leaseFurniture and other equipment 5 yearsComputer and software 3-5 yearsAwards management system Remaining months to March 2021Development costs for the CFI awards management system are capitalized and amortized when the new functionalities become operational. Development costs are composed mainly of professional services.USE OF ESTIMATESThe preparation of these nancial statements requires the CFI’s management to make estimates and assumptions that aect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the nancial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could dier from these estimates. These estimates are reviewed periodically and, as adjustments become necessary, they are reported in the periods in which they become known. The most signicant estimates used in preparing these nancial statements include assumptions used in determining the collectability of accounts receivable, the estimated useful lives of capital assets and the amount of accrued liabilities.3. Capital managementIn managing capital, the CFI focuses on liquid resources available for operations and to be disbursed to eligible recipients. The CFI’s objective is to have sucient liquid resources to continue operating in accordance with the Funding and the Contribution Agreements between the CFI and the Government of Canada, despite adverse events with nancial consequences, and to provide it with the exibility to take advantage of opportunities that will advance its purposes. The need for sucient liquid resources is considered in the preparation of an annual corporate plan, including long-term cash ow projections and budget. Disbursements to eligible recipients and actual operating results are monitored and compared to the cash ow projections to ensure availability of sucient liquid resources. As at March 31, 2020, the CFI has met its objective of having sucient liquid resources to meet its current obligations.30CANADA FOUNDATION FOR INNOVATION

Page 33

4. InvestmentsInvestments comprise the following nancial instruments:2020 2019Fair value $Carrying value $Fair value $Carrying value $Money market funds 52,352,006 52,334,165 — —Bonds — — 33,606,490 33,612,331High-interest savings accounts 149,684,379 149,684,379 149,718,304 149,718,304202,036,385 202,018,544 183,324,794 183,330,635MARKET RISKInterest rate riskInterest rate risk arises when the value of an investment uctuates due to changes in market interest rates.The CFI invests in money market funds and high-interest savings accounts and, as such, the interest rate does not present a signicant nancial risk for the CFI.Price riskPrice risk is the risk that the fair value of a nancial instrument will uctuate because of changes in market prices [other than those arising from interest rate risk], whether those changes are caused by factors specic to an individual nancial instrument or its issuer, or factors aecting all similar securities traded in the market.As at March 31, 2020, a 1% increase in market price would result in an increase of the fair value for investments of approximately $2.0 million [2019 – $1.8 million].The CFI’s grant commitments do not exceed the total of its investments, related investment income and grants committed from the government that will be received in future years. The timing of investment maturities is matched to projected cash outows. The degree of volatility is mitigated by the CFI’s policy that it will not invest in shares, warrants or other equities, convertible debt securities, derivatives, swaps, options or futures. As such, management believes that interest rate and price risks are appropriately managed.The high-interest savings accounts are tiered-rate interest accounts that combine high interest, liquidity and security of a simple deposit account, established for the purpose ofinvestment. The interest rates for these accounts range from 1.45% to 2.35% [2019 – 1.82% to 2.51%].Currency riskCurrency risk is the risk that the fair value of a nancial instrument will uctuate because of changes in foreign exchange rates. The CFI is not exposed to currency uctuations.LIQUIDITY RISKLiquidity risk is the risk of not being able to meet cash requirements in a timely and cost-eective manner.The CFI matches the timing of investment maturities to projected cash outows. Furthermore, the entire portfolio is made up of cash and money market instruments. As such, liquidity does not present a signicant nancial risk to the CFI.The maturities of money market funds range between April 2020 and May 2020.ANNUAL REPORT 2019–2031

Page 34

CREDIT RISKCredit risk arises from the potential that the issuer of an investment will fail to perform its obligations. Concentrations of credit risk exist when a signicant proportion of investments are invested in securities with similar characteristics or subject to similar economic, political or other conditions.It is the CFI’s policy to invest only in securities with at least AA investment ratings or the equivalent. In addition, the CFI’s investment policy restricts the single largest issuer, in the case of all but AAA Government, to a maximum of 1% to 20% [2019 – 1% to 20%] of the total investment portfolio depending on the investment category. As such, management believes that credit risk is appropriately managed.5. Capital assetsCapital assets consist of the following:2020 2019Cost $Accumulated amortization $Net book value $Net book value $Leasehold improvements 2,306,907 363,625 1,943,282 2,161,22Furniture and other equipment 804,768 390,591 414,177 532,931Computers and software 1,281,010 1,066,029 214,981 166,646Awards management system 6,629,688 6,134,108 495,580 1,135,57111,022,373 7,954,353 3,068,020 3,996,368Total cost and accumulated amortization related to capital assets held as at March 31, 2019, were $10,872,520 and $6,876,152, respectively.6. Deferred lease inducementIn August 2017, the CFI signed a lease ending February 28, 2029, for new premises and received an inducement. The lease provides for eleven months of free basic rent totalling $455,590 and seven months of free additional rent totalling $287,159. The total amount of $742,749 has been recognized as an inducement. The amortization of the inducement is over 127 months commencing August 1, 2018. As at March 31, 2020, the unamortized balance is $625,781.7. Deferred contributionsThe CFI operates under two active Funding Agreements and three Contribution Agreements with the Government of Canada. As at March 31, 2020, the Government of Canada had committed $8.79 billion in grants to the CFI under these agreements, of which $6.12 billion had been received. The terms and conditions of these agreements call for remaining grants to be paid to the CFI annually, subject to sucient appropriation by Parliament, based on the estimated cash requirements for the year. During the scal year, the CFI received $391.3million [2019 – $330.7 million] related to these agreements.32CANADA FOUNDATION FOR INNOVATION

Page 35

EXPENSES OF FUTURE YEARSDeferred contributions related to expenses of future years represent unspent externally restricted grants received to date, together with investment revenue earned, for the purpose of providing grants to eligible recipients and paying for operating and capital expenditures in future years.2020 2019$ $BALANCE, BEGINNING OF YEAR 224,916,658 290,477,114Add grants received 391,300,000 330,700,000Add restricted investment revenue earned 6,618,775 6,073,300Less amount recognized as revenue (372,436,205) (399,289,475)Less amount applied toward capital assets acquired(149,853) (3,050,525)Loss on equipment disposals — 6,244BALANCE, END OF YEAR 250,249,375 224,916,658CAPITAL ASSETSDeferred contributions related to capital assets represent the unamortized amount of restricted grants received and applied toward the purchase of capital assets. The amortization of capital contributions is recorded as revenue in the statement of operations on the same basis as the amortization of the related capital assets.2020 2019$ $BALANCE, BEGINNING OF YEAR 3,996,368 2,197,752Restricted grants applied towards the purchaseof capital assets149,853 3,050,525Loss on equipment and write-os — (6,244)Less amount amortized to revenue (1,078,201) (1,245,665)BALANCE, END OF YEAR 3,068,020 3,996,3688. CommitmentsDuring the year, the CFI approved grants for a maximum amount of $380.0 million [2019 – $135.3 million]. Total disbursements to eligible recipients during the scal year were $359.6 million [2019 – $386.1 million]. As at March 31, 2020, the CFI has approved grants for a maximum amount of $8,300.6 million, of which $7,322.3 million had been disbursed. To date, the CFI has award agreements in place related to these approved grants in the amount of $8,018.6 million and, therefore, has outstanding contractual obligations of $696.3 million as at March 31, 2020.ANNUAL REPORT 2019–2033

Page 36

The CFI estimates these obligations to be disbursed as follows:in millions of$2021 250.72022 160.12023 132.32024 62.72025 onwards 90.5TOTAL ESTIMATED DISBURSEMENTS 696.3In August 2017, the CFI signed a lease for premises at 55 Metcalfe Street, Ottawa, Ontario fora period ending February 28, 2029. The minimum annual lease payment related to the new premises is approximately $1.0 million.9. Restricted contributions and net assetsThe requirements of the Act, which governs the CFI and the terms of its Funding and Contribution Agreements with the Government of Canada, externally impose restrictions on all of the CFI’s net assets. Investment revenue to be earned on the grants received from the Government of Canada is also restricted. Accordingly, the entire net assets of the CFI are deferred and taken into revenue as expenditures are made with no net asset balance outstanding at any time. A statement of changes in net assets has not been prepared since itwould not provide additional useful information.10. Pension planThe employees of the CFI may elect to become members of the Universities Canada Pension Plan [the ”Plan”], a dened contribution plan managed by Sun Life Financial Inc. The employer contributions made to the Plan during the year ended March 31, 2020, amounted to $766,907 [2019 – $770,598].11. Statement of cash ows2020 2019$ $Interest and other receivables (182,300) 678,364Prepaid expenses (180,624) 112,745Accounts payable and accrued liabilities 522,824 (359,985)Deferred lease inducement (70,181) 695,962International Conference on Research Infrastructures project deposits458,453 94,826548,172 1,221,91212. Global coronavirus pandemicThe global coronavirus pandemic has resulted in estimated losses of $125,295 relating to travel costs incurred for the 2020 Innovation Fund merit-review process. These have been reected in general and administration expenses. Further impacts are unknown at this time.34CANADA FOUNDATION FOR INNOVATION