Across Canada and in Ontario, business and provincial government investment in research is falling, and universities are picking up the slack.
The latest data on research and development (R&D) from Statistics Canada indicate that aggregate research expenditures in Canada will fall this year. Once forecast GDP inflation (1.3 per cent) is taken into account, the decline is expected to be over $600 million, or two per cent.
It is the decline in business expenditures that contributes the most to the drop. In percentage terms, provincial government expenditures represented the second largest decline. Expenditures by higher education institutions and the federal government essentially held steady. Taking a longer view, however, only the higher education sector has kept up its level of activity in real terms. Since 2007, the steepest fall in R&D spending has been in provincial bodies, followed by business (16 per cent) and the federal government (12 per cent).
In Ontario the peak for total research and development expenditure was 2005. Between then and 2011 (the last year of reported data), Ontario business expenditures in constant dollars are down by 18 per cent. Federal government expenditures within the province rose, but only if expenditure in the National Capital Region is included. In contrast, R&D performed by Ontario higher education institutions rose by nine per cent.
Sources:
Statistics Canada, Gross Domestic Expenditures on Research and Development in Canada (GERD), and the Provinces; Spending on research and development, 2013 (intentions)