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R&D getting a mere flick from corporate cash hoard

Canadian businesses plan to spend $15.5-billion on R&D this year, up 0.9 per cent from $15.4-billion in 2011, Statistics Canada said Thursday.

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Canadian companies may have plenty of cash, but they remain very cautious about investing it in research and development.

Canadian businesses plan to spend $15.5-billion on R&D this year, up 0.9 per cent from $15.4-billion in 2011, Statistics Canada reported Thursday.

But that's still nearly 7 per cent below the private sector's pre-recession peak, based on spending intentions.

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Experts have regularly expressed concern about lagging R&D spending in Canada, particularly by the private sector. Developing new products and methods helps boost productivity.

As well, the business sector's share of projected R&D spending is also falling compared to governments, universities and non-profit organizations. Spending this year by businesses is expected to make up 52 per cent of all R&D spending, down from 58 per cent a decade ago.

Overall R&D spending is expected to reach $30-billion this year, up just 0.3 per cent from 2011.

Behind businesses, the second largest R&D spenders are universities and other post-secondary institutions. They plan to increase spending by 1 per cent to $11.5-billion.

The federal government plans to spend 7.3 per cent less this year, or $2.5-billion – a decrease that Statscan attributes to end of stimulus spending during the recession.

The country's overall spending on R&D as a percentage of gross domestic product was 1.74 per cent in 2011 – well below many other leading developed countries. In 2010, Canada ranked fifth among the Group of Eight countries with a ratio of 1.85 per cent.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

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