Technical notes

Statistics for even years
Terminology
Industrial classification

 

Statistics for even years

Data for the reference year 2005 are available for all tables with the exception of counts of companies. However, in the even years prior to 1982 and for 1992 and 1994, our estimation procedures did not permit the preparation of tables based on revenue size, employment size, sources of funds and country of control of companies.

Regional data on research and development (R&D) expenditures and personnel are only available for 1977, 1979 and 1981 to 2005.

Terminology

The following terminology is used within the publication:

Performing company: The organization which carried out the R&D and submitted the return. In the case of a consolidated return, performing company could include several companies. It also includes divisions of an enterprise which send separate returns or organizations such as industrial non-profit organizations.

Related companies: Includes parent, subsidiary and other affiliated companies. In the case where a consolidated return is submitted, “related companies” would exclude companies included in the consolidation.

R&D contracts for other companies: R&D contract work performed by the reporting company for other companies.

Federal grants: Federal R&D grants and the R&D portion of any other federal grants; it excludes funds or tax credits for R&D tax incentives.

Federal contracts: Federal R&D contracts and the R&D portion of any other federal contracts.

Provincial sources: Provincial R&D grants and contracts, and the R&D portion of any provincial grants and contracts; it excludes funds or tax credits for R&D tax incentives.

Other Canadian sources: Includes funds from universities and from levels of government other than federal and provincial.

Intramural expenditures: Expenditures for R&D work performed within the reporting company, including work financed by others.

Current intramural expenditures: Labour costs, fringe benefits and other current costs for R&D, including non-capital purchases of materials, supplies and equipment but excluding capital depreciation. Current intramural expenditures also include contracts for services required to carry out R&D (e.g. contracts awarded for drilling needed for heavy oil R&D).

Capital expenditures: Expenditures on fixed assets used in the R&D program, classified into land, buildings, and equipment.

Technological payments: Payments made for R&D and other technology.

Technological receipts: Payments received for R&D and other technology.

Other technology: Technology acquired through patents (sale/purchase, licensing), “know-how” (unpatented), inventions, trademarks (including franchising), patterns, design, and R&D technical assistance.

Revenues: Revenues resulting from the sale of products and services (after deducting sales and excise taxes), and other revenues such as those generated from investment and rentals.

Non-commercial firms: R&D performers without a directly affiliated Canadian commercial base. Includes industrial non-profit organizations and trade associations, R&D establishments set up by consortia, and R&D establishments set up by non-residents without associated commercial establishments and funded principally from abroad.

R&D personnel: Calculated in full-time equivalent (FTE). R&D may be carried out by persons who work solely on R&D projects or by persons who devote only part of their time to R&D, and the balance to other activities such as testing, quality control and production engineering. To arrive at the total effort devoted to R&D in terms of person-years, it is necessary to estimate the FTE of these persons working only part-time in R&D.

FTE = number of persons who work solely on R&D projects + estimate of time of persons working only part of their time on R&D.

Example calculation:

If out of five scientists engaged in R&D work, one works solely on R&D projects and the remaining four devote only one quarter of their working time to R&D, then:  FTE = 1 + 1/4 + 1/4 + 1/4 + 1/4 = 2 scientists.

Federal government funds for industrial R&D: Federal support consists of grants and contracts for R&D to be performed by business enterprises. Taxes foregone as a result of income tax incentives for R&D are not considered direct government support and are not attributed to the federal government.

Industrial classification

The natural classification to use within the business enterprise sector is the North American Industry Classification System (NAICS). There are, however, problems with its use. A major problem is caused by companies with establishments in more than one industry (e.g., companies which both refine petroleum and extract oil). Another is caused by the concentration of the R&D activity among a few companies. In order to prevent disclosure of individual respondents many industries must be grouped together to provide sufficient observations for publication.

A third problem is that the classification, chosen to represent general industrial activity, may not be entirely suitable for identifying companies chosen only for their involvement in R&D.

There are some restrictions on the application of the NAICS, for example, industrial non-profit organizations will be assigned to the industry they support.
The R&D activities of other sectors such as the federal government, provincial governments, higher education, and private non-profit organizations are covered in other reports.