Energy-related research and development expenditures by area of technology, 2017

Released: 2019-08-26

Canadian companies spent $1.5 billion on energy-related research and development (R&D) performed in-house in 2017, down 4.6% from 2016. This spending accounted for 8.3% of the total in-house R&D expenditure in Canada.

Energy-related areas of technology include fossil fuels, renewable energy sources, nuclear fission and fusion, electric power, hydrogen and fuel cells, energy efficiency, and other energy-related technologies.

Fossil fuel technologies continued their four-year trend as the main driver of energy-related in-house R&D spending in 2017, accounting for almost half of the money spent.

In-house R&D expenditures related to fossil fuel technologies are stable in 2017

For the first time since 2014, the total amount spent on in-house R&D related to fossil fuel technologies was relatively unchanged, declining 1.3% to $690 million in 2017. This followed fairly significant declines in 2015 (-29.2%) and 2016 (-26.3%) that coincided with a downturn in oil prices. Expenditures on R&D activities are generally considered an indicator of economic change, as they can be downsized or scaled up as economic downturns or expansions occur.

R&D spending on fossil fuel technologies has shifted toward outsourcing

Since 2015, firms conducting R&D activities related to fossil fuel technologies have been transitioning their R&D investments from in-house programs to the outsourcing of R&D activities. Expenditures on outsourced R&D activities related to fossil fuel technologies have more than doubled from their level in 2015, to $184 million in 2017.

Chart 1 
Energy-related research and development (R&D) expenditures on fossil fuel technologies

Oil sands technologies continue to be the focus of fossil fuel related R&D performed in-house

The majority of in-house R&D spending related to fossil fuels by businesses in Canada continued to be focused on oil sands technologies, accounting for more than 50% of in-house expenditures in this area in 2017. In-house R&D activities in the areas of crude oil and natural gas exploration technology, and of refining, processing and upgrading of fossil fuel technologies have almost doubled cumulatively in 2017 from their 2016 level.

Chart 2 
Composition of in-house research and development (R&D) expenditures on fossil fuel technologies

In-house R&D expenditures related to energy efficiency decline for the first time in three years

In 2017, companies decreased their in-house R&D spending related to energy efficiency for the first time since 2014, falling from a record high $290 million in 2016 to $211 million. These expenditures on R&D accounted for 13.6% of total in-house energy-related R&D spending, down from 17.9% in 2016.

The number of firms performing and funding in-house R&D activities related to energy efficiency technologies has been increasing over the four year period covered by this series, despite the recent decline observed in R&D expenditures on these technologies.

Foreign-controlled firms reduce in-house and outsourced energy-related R&D expenditures

In 2017, foreign-controlled firms reduced their funding of energy-related in-house R&D programs by 26.8% to $295 million. These companies also reduced their spending on outsourced energy-related R&D activities by 77.1%, to $35 million. These decreases mirror the exit of foreign investment in the Canadian fossil fuel industry observed for this time period.

Sustainable Development Goals

On January 1, 2016, the world officially began implementation of the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the next 15 years. The plan is based on 17 specific sustainable development goals.

Data on energy-related research and development expenditures by area of technology is an example of how Statistics Canada supports the reporting on the Global Goals for Sustainable Development. This release will be used in helping to measure the following goal:

Products

The new interactive dashboard, "Characteristics of research and development in Canadian industry" (Catalogue number71-607-X), is now available.

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