R&D spending by private non-profit sector increases after years of declines

R&D spending by Canada’s private non-profit (PNP) sector registered its first increase after five consecutive years of declines with $68 million in expenditures in 2001. The total marks a 17.2% increase over the previous year but falls far short of the high-water mark achieved in 1995. The turnaround is captured in the latest bulletin from Statistics Canada.

Medical sciences continue to dominate the PNP sector, accounting for $55 million or 82% of the 2001 total. The next largest category for the past two years for which data are available is the natural sciences, overtaking social sciences and humanities which seem to be declining as a focus of research. The amounts for both categories are small, however, and expenditures tend to fluctuate widely from year to year depending on which research projects are underway.

The majority of the decline in recent years is due to a reclassification of data dating back to 1992. “When taking into account the close relationship between the Private Non-Profit sector, Hospitals and the Higher Education Sector, several Research Institutes have been identified as belonging to the Higher Education Sector,” the report notes.

As the chart below shows, the PNP organizations themselves — once the single largest source of funding — have declined substantially in recent years. At the same time, however, public funding has increased and reached its highest total in 10 years in 2001.

About 60% of R&D outlays continue to be financed by the private sector, including reporting organizations, business enterprises and other Canadian sources — primarily other PNP organizations. The PNP sector is comprised of private philanthropic foundations, voluntary health organizations, research institutes and associations and societies.

Research institutes conduct the largest amount of PNP R&D ($42.4 million), followed by voluntary health organizations ($25.3 million). A negligible amount is conducted by Associations and Societies ($500,000) while private philanthropic foundations conduct nothing at all. Instead they allocate their funds to projects carried out by universities or other non-profit organizations.

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