Drop of industrial R&D in Ontario pulls down national total: Statistics Canada

Guest Contributor
September 19, 2008

Industrial R&D is expected to inch up just 1% in 2008, dampening expectations that last year's 2.7% gain was the beginning of a more substantial recovery and reflecting deepening weakness in Ontario's manufacturing and services sectors. The data are from Statistics Canada and based on its latest survey of industry's R&D expenditures and expectations, but information for an increasing number of sectors has been suppressed as the agency enforces strict confidentiality rules.

This year, StatsCan's science, innovation and electronic division has even gone one step further. For the first time it has left preliminary data for certain industry categories blank and replaced with an ‘F' indicating that the data are too unreliable to be published. Other sectors have an ‘E' attached to the preliminary data, indicating that caution should be used when analyzing the data. The cutoff for the latest survey has also been raised from $1 million to $1.5 million, with smaller players picked up from Canada Revenue Agency data on the scientific research and experimental development tax credit program.

Limitations aside, the report offers a sobering picture of private sector R&D. Industrial R&D has been the focus of much government rhetoric but few concrete measures in recent years. From a provincial perspective, eight provinces increased R&D spending with Quebec and Newfoundland registering the biggest increases. Newfoundland continued to benefit from increased oil R&D, jumping 15.1% to $99 million while Quebec enjoyed a healthy jump of 9.5% to $4.6 billion. That contrasts sharply with Ontario, which suffered a 2.6% decline from $8.25 billion to $8.03 billion as the province shed more manufacturing jobs. Manitoba's R&D outlays also headed south, tumbling 7.5% to $184 million.

Digging down at the provincial level to determine which sectors contributed to growth or decreases can be frustrating, especially for smaller provinces where data have been suppressed for sectors which are obviously of primary importance. For instance, data for Atlantic Canada, Manitoba and Saskatchewan are missing four of the six broad areas of industry R&D, severely circumscribing its usefulness.

The only province with complete sectoral data is Ontario, presumably because it has the greatest number of firms and therefore publishing the data does not endanger exposing the confidentiality of any companies. The precise reasons for the suppression of certain data are unclear as StatsCan's confidentiality rules are confidential.

The data also break down the various types of industrial R&D for 2006. New product development accounts for $6.2 billion of the $15.3-billion total, followed by existing product development ($3.1 billion), applied research ($1.9 billion), new process development ($1 billion), basic research ($727 million), new technical services improvement ($684 million) and existing technical services improvement ($230 million).

The number of professionals continues to rise, increasing 5.8% between 2005 and 2006 to 148,813. That includes 5,865 with a PhD, 14,867 with a Master's and 6,845 with a Bachelor's. Technical support staff number 61,236 and technicians account for 44,284.

R$

Total Intramural R&D Expenditures — By Industry

($ millions)   
2004   2005    2006   2007   2008   
Total all industries 15,299    15,791    16,137    16,159    16,316 E   
Total agriculture, forestry, fishing and hunting 102    109    115    114 E    102 E   
Agriculture 78    80    91    89 E    80 E   
Forestry and logging 19    19    20 E    F    F   
Fishing, hunting and trapping 5    10    4    F    F   
Total mining and oil and gas extraction 371    433    578    489    500   
Oil and gas extraction 314    386    515    x    x   
Mining 58    47    63    F    F   
Total utilities 243    271    318    x    x   
Electric power 230    258    301    299    310   
Other utilities 13    13    17    F    F   
Construction 56    69    69    F    F   
Total manufacturing 8,343    8,435    8,563    8,426    8,607   
Food 136    136    141    140 E    142 E   
Beverage and tobacco x    19    17    19    F   
Textile 57    55    x    48 E    49 E   
Wood products 80    100    122    105 E    91   
Paper 420    343    374    311    314 E   
Printing 35    39    x    F    F   
Petroleum and coal products 190    214    202    239    239   
Pharmaceutical and medicine 1,190    1,177    1,077    1,081    1,090   
Other chemicals 220    199    189    208 E    198 E   
Plastic products 124    129    135    F    F   
Rubber products 26    31    x    25    25   
Non-metallic mineral products 44    73    75    81 E    67 E   
Primary metal (ferrous) 47    x    x    x    x   
Primary metal (non-ferrous) 225    250    272    236    244   
Fabricated metal products 202    214    238    F    F   
Machinery 498    551    592    527 E    624 E   
Computer and peripheral equipment 165    156    141    139 E    116 E   
Communications equipment 1,510    1,410    1,506    1,556 E    1,631 E   
Semiconductor and other electronic components 811    840    826    893    905   
Navigational, measuring, medical &    
control instruments 370    473    441    410   428   
Other computer and electronic products 22    28    x    19 E    17 E   
Electrical equipment, appliance and components 148    142    160   160 E    158 E   
Motor vehicles and parts 657    638    608    568    590   
Aerospace products and parts x    857    x    x    928   
All other transportation equipment 45    x    63    x    x   
Furniture and related products 31    31    x    x    x   
Other manufacturing industries 182    x    216    227 E    215 E   
Total services 6,183    6,473    6,494    6,743    6,720   
Wholesale trade 794    828    814    859    823 E   
Retail trade 31    40    x    F    F   
Transportation and warehousing 52    57    x    64    61   
Information and cultural industries 1,390    1,585    1,669    1,800 E    1,744 E   
Finance, insurance and real estate 331    412    428    377    F   
Architectural, engineering and related services 515    445    418    419    441   
Computer system design and related services 1,168    1,137    1,179    1,197 E    1,127 E   
Management, scientific and technical consulting 69    71   56    F    F   
Scientific research and development services 1,225    1,215    1,152    1,218    1,350   
Health care and social assistance 364    400    378    421    421 E   
All other services 244    283    293    295 E    273 E   
Statistics Canada – Catalogue no. 88-001-X 11



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