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Gross domestic expenditure on research and development

The 2013 publication release of gross domestic expenditure on research and development (GERD) in Canada represents national actual expenditure for 2011; preliminary data for 2012, intentions data for 2013; and, historical data from 2003. This publication also shows research and development (R&D) expenditure by province from 2007 to 2011.

For 2013 Canada’s anticipated GERD is $30.4 billion, 0.9% less than in 2012. Out of all of the performing sectors, the federal government, higher education and private non-profit sectors are anticipating positive growth in GERD while the rest of the sectors expect negative growth.

In 2011 Canada’s GERD expenditure was $30.7 billion, a 1.6% increase from the 2010 expenditure of $30.2 billion. The growth rate for GERD between 2010 and 2011 was affected by increases in the business (3.2%) and higher education (3.4%) sectors. During the same period, federal government expenditure on R&D decreased 11.9%.

Canada and OECD countries

Internationally, a country’s gross domestic expenditure on research and development (GERD) as a percentage of its gross domestic product (GDP) is considered an indicator of the country’s degree of R&D intensity and is a commonly used summary statistic for international comparisons. This statistic is also compared with GERD and GDP per capita values as it is influenced by a nation’s economic and demographic structure, as well as its propensity to perform R&D in particular sectors.

  1. The Organisation for Economic Co-operation and Development (OECD) publishes international statistics on R&D in its Main Science and Technology Indicators. Their most recent online statistics contain comprehensive OECD countries’ data for 2011. 1  Combined OECD country estimates measured in current purchasing power parity (PPP) indicated an overall growth rate in GERD between 2010 and 2011 of 2.1%, with the business enterprise sector’s growth at 2.8% and 2.5% for the higher education sector, while government R&D growth declined -1.2%.
  2. In 2011, Israel remained the OECD country with the largest GERD as a percentage of GDP at 4.38, followed by Korea at 4.03 and Finland at 3.78. In comparison, Canada’s investments in R&D as a percentage of GDP in 2011 was 1.74 ranking lower than the United States’ reported 2.77 and the OECD average of 2.37. Among the G8 countries, Canada ranked sixth followed by Italy and the Russian Federation.
  3. At 1.74, Canada’s 2011 GERD as a percentage of GDP was at its lowest level of the past decade, in contrast with the high of 2.04 it attained in 2001. The lower value indicates that R&D investments in Canada diminished as a percentage of gross domestic product.
  4. Canada’s GERD per capita at current prices and PPP in 2011 was $704.4 US dollars and the OECD average was $833.5 US dollars. The 2011 indicator in Canada declined by 2.5% from $722.7 US dollars in 2010, while for all OECD countries it rose 3.4% from $806.3 US dollars. 2 

National estimates

GERD is often displayed as a matrix of performing and funding sectors. GERD is performance- based meaning it is constructed by adding together the intramural expenditure on research and development (R&D) as reported by the performing sectors. The funding sectors are derived based on the sources of funds reported by the performing sectors.

Performing sector data

In 2011, business enterprises spent almost $16 billion on R&D, up 3.2% from the previous year, and 6.8% below the pre-recession peak in 2007. This expenditure accounted for 52% of total spending on R&D in 2011. 2013 intentions data show business enterprise R&D expenditure decreasing by 2.8%, from $16.1 billion in 2012 to $15.6 billion in 2013.

  1. In 2011 the higher education sector’s R&D spending was $11.6 billion, maintaining its position as the second largest R&D performing sector. 2012 preliminary data report $11.8 billion in spending by this sector. For 2013, higher education institutions and affiliated research hospitals anticipate R&D spending to reach $11.9 billion.
  2. The third largest performing sector, the federal government, reported their R&D expenditure in 2011 at $2.6 billion, down 11.9% from 2010. Federal governments reported an 8.0% decrease in spending between 2011 and 2012. For 2013, federal R&D spending is anticipated to be $2.5 billion.
  3. In 2011, provincial governments and provincial research organizations recorded expenditures of $332 million, down 7.8% from 2010. Between 2011 and 2012 these combined sectors show a 3.3% increase in R&D spending. In 2013, provincial governments and provincial research organizations expenditures are expected to remain relatively unchanged with expected spending of $334 million in 2013.
  4. 2011 R&D spending of private non-profit organizations was $127 million, 5.9% less than in 2010. For 2013, this sector is expected to increase their total R&D performance to $144 million, up 15.2% from 2012.

Funding sector data

  1. As with R&D performing, the business enterprise sector continues to be the largest funding sector. In 2011 the business enterprise sector provided $14.7 billion, up 5.0% from the previous year. Business enterprise funding is expected to increase in 2012 to $14.9 billion, but decrease in 2013 to $14.4 billion.
  2. In 2011, federal government sector funding was $6.1 billion, a 5.3% decrease from 2010. In 2013, this sector’s funding expenditure is anticipated to decline to $6.0 billion.
  3. In 2011 the higher education recorded $5.2 billion in funding. For 2013 this sector is expected to increase funding to $5.3 billion.
  4. R&D funding data includes the foreign sector, as entities outside of Canada have been reported by R&D performers as sources of R&D funding. In 2011, the foreign sector provided $1.8 billion in funding, a 9.1% decrease from the previous year. For 2013 this sector does not anticipate significant changes in its provision of funding.

Field of science

  1. Canada’s GERD is separated into two fields of science: natural sciences and engineering, and social sciences and humanities. Over the last decade natural sciences and engineering has consistently accounted for over 90% of total national expenditure on R&D. It should be noted that all R&D expenditures for the business enterprise sector, the largest performing R&D sector, are undertaken in the natural sciences and engineering field. As a result, most R&D expenditures occur in natural sciences and engineering.
  2. In 2011, total R&D expenditure in natural sciences and engineering was $28.1 billion, up 1.8% from the previous year. For 2013, R&D expenditure in this field of science is expected to decline by 1.1% to $27.8 billion or 91% of total GERD compared to 2012.
  3. R&D spending in the social sciences and humanities was $2.6 billion in 2011, down 0.3% from 2010 expenditure. In 2013 R&D expenditure in the social sciences and humanities are expected to increase to $2.7 billion.
  4. In 2013, the share of GERD expenditure in the social sciences and humanities is expected to increase from 7.1% in 2003 to 8.7%. The majority of R&D expenditure in this field of science is performed in the higher education sector.

Data by Province and Territory

Provincial and territorial expenditures are assigned to the province or territory in which the performing organization is located. Provincial and territorial funding sector expenditure represent R&D funding distributed in a province or territory. The funds do not necessarily originate from within the province. Data on the provincial distribution of GERD spending are available to 2011.

  1. Historically Ontario has been the province with the largest expenditure on R&D. In 2011, just under (47.6%) of R&D activity amounting to $14.6 billion occurred in Ontario. This is followed by Quebec with $7.9 million, which accounted for 25.7% of the total share of 2011 GERD.

Performing sector data

  1. In 2011, business enterprises were the largest performing sector within Ontario, Quebec, Alberta, British Columbia and the territories. For all other provinces, the largest performing sector was higher education. (Table 2-2 and CANSIM table 358-0001).

Funding Sector data

  1. In 2011, the business enterprise sector was the largest funding sector in Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. In all other provinces the higher education sector was the largest funding sector. In the territories the federal government sector slightly edged out the business enterprises sector as the largest funding sector. (Table 2-2 and CANSIM table 358-0001).

Field of Science

  1. Since Ontario and Quebec are the provinces where the greatest proportion of R&D expenditure occurs, this is also the case for expenditure by science type. In 2011, almost three quarters of natural sciences and engineering activities took place in Ontario (47.8%) and Quebec (26.0%). In comparison for R&D activities in the social sciences and humanities field just over two-thirds were performed in these two provinces in 2011.
  2. On a provincial basis, most provinces in 2011 showed an increase in the share of social sciences and humanities activities to their respective provincial GERD total, with the exception of New Brunswick, Quebec, Ontario, Saskatchewan and Alberta.
Chart 1
Gross Domestic Expenditures on R&D as a percentage of GDP, 2011
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