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Canadian Corporate R&D Spending Drops for 5th Straight Year

Blackberry Curve (Marvin Kuo/Flickr)Industry market research company Research Infosource in Toronto, Ontario says total corporate R&D spending in Canada dropped for the fifth year in a row in the 2010 fiscal year, despite an increase in revenues for these companies. The top R&D spenders among Canadian companies in 2010 were found in the information technology, engineering, and aerospace sectors.

Research Infosource says R&D investments among Canadian enterprises dropped to $9.4 billion in fiscal 2010 from $10.4 billion in 2009. This was the fifth consecutive year Canadian companies registered a decline in R&D spending. Company CEO Ron Freedman notes that the total spending level includes significant reductions by Nortel Networks (in restructuring) and TELUS Corporation. When excluding those two companies, total R&D spending increases by 3.5 percent for 2010.

The drop in R&D spending occurred in spite of increased overall corporate revenues of 4.7 percent for the year. The reduction in R&D funding while revenues increase has become a pattern among Canadian businesses, according to Research Infosource, which notes that R&D spending has declined while revenues increased in six of the last nine years.

The top 10 Canadian companies in R&D spending, and their industries, were:

  • Research In Motion Limited (Comm/Telecom Equipment)
  • BCE Inc. (Telecommunications Service)
  • IBM Canada (Software & Computer Services)
  • Atomic Energy of Canada Limited ( Engineering Service)
  • Magna International Inc. (Automotive)
  • Pratt & Whitney Canada Corp. (Aerospace)
  • Ericsson Canada Inc. (Comm/Telecom Equipment)
  • AMD Canada (Electronic Systems & Parts)
  • Alcatel-Lucent (Comm/Telecom Equipment)
  • Bombardier Inc. (Aerospace)

Four of these top 10 companies — IBM Canada, Magna International, Pratt & Whitney Canada, and AMD Canada — recorded decreases in R&D spending, and all are subsidiaries of U.S. enterprises.

Pharmaceutical and biotech companies Apotex, Sanofi, and Pfizer Canada ranked 11, 12, and 13. Of these three businesses, only Pfizer Canada increased its R&D spending in 2010.

Read more: Pharma, Technology Lead Worldwide Corporate R&D Rebound

Photo: Marvin Kuo/Flickr

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