Business

Companies cut R&D spending

Canada's 100 biggest corporate research and development spenders cut back R&D investment by almost two per cent in fiscal 2009 from the year earlier, according to data compiled by Research Infosource Inc.

Canadian research and development investment falls for 4th year in a row

Canada's 100 biggest corporate research and development spenders cut back R&D investment by almost two per cent in fiscal 2009 from the year earlier, according to data compiled by Research Infosource Inc.

The companies collectively cut spending by $180 million, or 1.8 per cent, to $10.22 billion, for the fourth decline in as many years.

Blackberry maker Research In Motion has filled the gap in R&D investment left by the collapse of Nortel Networks. ((Courtesy AT&T))

The report noted the effects of the recession on the country's top 100 R&D companies, which combined posted a drop in revenues of 16.4 per cent, the first decline in almost a decade.

Research Infosource is a unit of Toronto-based research consultants The Impact Group.

Because research spending is among the first items cut by businesses in a downturn, and one of the last to be increased after a recovery, the report predicted more cuts may still be ahead.

"As R&D spending is a lagging, and not a leading indicator (of economic growth), the full impact may still be in the future," it said in a release.

On the positive side, it said, Waterloo, Ont.-based BlackBerry maker Research In Motion moved to fill the gap left by the collapse of Nortel Networks to become the R&D leader, reporting $1.1 billion in investment in fiscal 2009.

"But overall trends are disappointing," it said in a release.

"This year's spending decline, matched with a substantial fall in revenues, should be a wake-up call for policymakers that change is needed in how we support research in Canada", said chief executive Ron Freedman.

Number of top spenders grows

The number of companies spending $100 million or more grew to 22 from 19 the previous year. Together, they spent $7.42 billion and accounted for 73 per cent of total spending.

The top six were Research In Motion, Nortel Networks, BCE, Telus, IBM Canada and Magna International, which all reported more than $500 million in spending.

New to the list were Suncor Energy, Biovail (now part of Valeant Pharmaceuticals International), Ontario Power Generation and Novartis Pharmaceuticals Canada.

British Columbia was the only province with spending growth, with combined spending for 11 top companies growing by 66.4 per cent

Spending by Alberta's 11 companies had a combined decrease of 9.2 per cent, Quebec's 29 companies' fell by 8.4 per cent and Ontario's 44 companies declined 4.4 per cent.

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