Statistics Canada reports that spending on research and development (R&D) in Canada is expected to be two per cent higher in 2011 than it was the previous year. After two years of cutting back, spending by business is expected to increase by five per cent.
However, if inflation rose and the economy grew as anticipated in the last months of 2011, the picture is not as positive. Business spending is expected to grow by two per cent after inflation. That will not be enough to reverse the decline in business R&D as a percentage of gross domestic product (GDP), which has fallen from 1.29 per cent in 2001 to 0.92 per cent in 2010.
Most of the decline in overall spending on R&D as a share of GDP in Canada between 2001 and 2009 can be attributed to business, but the federal government will be responsible for most of the decline in 2011. It is the third largest performer of R&D. Its spending fell 10 per cent in 2011. It is also the largest external funder for university research. Federal funding for university research dropped four per cent.
Recent cuts to the Ontario Research Fund will not help matters in Ontario, a province struggling to reinvent its economy after the decline of the manufacturing sector.
Source: Statistics Canada, Gross Domestic Expenditures on Research and Development in Canada (GERD), and the Provinces, National estimates 2001 to 2011 / Provincial estimates 2005 to 2009
This article originally appeared in the OCUFA Report. To receive stories like this every week in your inbox, please subscribe.