Health sector makes major gains as share of overall R&D expenditures approaches 25%

Nearly one in every four dollars spent on R&D in 2004 was made in the health field, up from less than 17% in 1999. Health R&D spending reached $5.75 billion or 23.5% of the 2004 total of $24.5 billion, up 8.8% from 2003, according to preliminary data from Statistics Canada. For the past 10 years, health R&D has averaged annual increases of 11%, far higher than the 6% annual growth experienced with overall gross expenditures on R&D (GERD). It now stands at $180 per capita, compared to just $46 in 1988.

It took 10 years for health R&D to double between 1988 and 1997, and just five years to double again by 2002. The dramatic acceleration coincided with the federal government’s decision to invest heavily in R&D, primarily in universities through the Canadian Institutes of Health Research and the Canada Foundation for Innovation. It was also a period in which Canada successfully attracted foreign investment in the pharmaceutical sector, through strengthened copyright legislation and improved infrastructure.

Business accounts for the single largest source of funding at 27%, followed by higher education (26%), the federal government (19%), foreign sources (14%), private, non-profit organizations (8%) and provincial government (6%). The higher education sector is by far the single largest performer, accounting for 60% of the 2004 total. It is followed by industry (35%), the federal government (93%), provincial governments (1%) and the private, non-profit sector (1%).

In the post-secondary sector, the largest amounts of funding come from the institutions themselves and the federal government, with the bulk of that funding directed to institutions in Ontario and Quebec.

In 2002, the institutions provided $891.3 million in funding to those two provinces, or 70.9% of the higher education total. Similarly, the federal government directed $536.1 million to institutions in Ontario and Quebec, or 71.3% of all federal support for health R&D.

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