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Research and development of Canadian private non-profit organizations, 2018

Released: 2020-06-11

Private non-profit in-house research and development

$142 million

2019

-12.9% decrease

(annual change)

Research and development activities in 2018 

Canadian private non-profit organizations spent $171 million performing research and development (R&D) activities in 2018, down $4 million from the previous year. The vast majority of these activities was tied to current in-house research and development, which decreased 3.5% to $165 million. Wages and salaries represented more than half of all costs (54.4%), despite declining 4.1% to $93 million.

As the data in this release were gathered well before the onset of COVID-19, they will serve as an important benchmark to measure the full effect of the pandemic on research and development activities in the Canadian economy.

Medical and health sciences account for one half of research and development expenditures

More than three-quarters of all R&D spending by Canadian non-profit organizations in 2018 was on the natural sciences and engineering. Expenditures rebounded from the previous year, reaching $139 million. Within this category, medical and health sciences accounted for 50.3% or $86 million of all expenditures, making it the largest field of R&D. Despite its size, expenditures in medical and health sciences have declined since 2014, when it accounted for $126 million or 82.4% of total expenditures.

Chart 1  Chart 1: In-house research and development (R&D) expenditures, by field of R&D
In-house research and development (R&D) expenditures, by field of R&D

R&D in the social sciences and humanities, which represents another major category of expenditures, fell 24.4% to $31 million, the second-highest outlay since 2014.

Research and development activities concentrated in Ontario

Ontario's R&D spending decreased slightly in 2018, marking the province's first decline in its share of R&D performance since 2014 when the survey started tracking the provincial distribution of R&D activities. Despite this decrease, the geographic distribution of R&D activities in Canada remained relatively stable: Ontario continued to account for almost three-quarters of all in-house R&D performed at $123 million, while British Columbia accounted for 7.6% ($13 million), followed by Quebec and New Brunswick, both at 6.4% ($11 million each).

Government is the largest source of funds for private non-profit organizations' in-house R&D

In keeping with previous years, private non-profit organizations funded their R&D activities primarily through government grants and contracts in 2018. Provincial grants were the largest single source of funds reported, with funds reaching $58 million, followed by federal government grants at $36 million and self-funding at $25 million.

Employment split between researchers and support

The number of full-time equivalent (FTE) personnel engaged in R&D activities in Canadian private non-profit organizations fell 5.4% to 1,244 FTEs in 2018. Most of these personnel were employees (92.6%), composed of researchers and research managers (572 FTEs); and research and development technical, administrative and support staff (580 FTEs). Since 2014, the number of researchers has remained mostly stable, while the number of technicians, technologists and support staff has been more volatile. On-site contractors accounted for the remaining R&D personnel.

Outsourcing of research and development increases again in 2018

In addition to performing R&D, private non-profit organizations also outsource R&D to other organizations either through contracting or granting out. In 2018, the amount of outsourced R&D reached $546 million, up 3.6% from 2017.

Most outsourced R&D funds were sent to other sectors in Canada, most notably the higher education sector and hospitals. Hospitals received $298 million and universities received $148 million, together accounting for over 80% of funds outsourced by the private non-profit sector.

Chart 2  Chart 2: Expenditures for outsourced research and development, by sector and location, 2018
Expenditures for outsourced research and development, by sector and location, 2018

Private non-profit organizations also sent $21 million outside of Canada to fund R&D activities, with $17 million being attributed directly to foreign universities.

Outcomes of research and development

Similar to previous years, almost three-quarters of private non-profit enterprises that performed R&D in 2018 reported that their investments resulted in improvement in the provision of services (67.1%) and improved provision of goods (34.1%).

Research and development spending intentions, 2019 and 2020

Private non-profit organizations indicated that they intend to spend $136 million on in-house research and development in 2020, down from revised intentions of $155 million in 2019. By contrast, outsourced research and development spending is expected to increase to $547 million in 2020 relative to 2018, but down from revised intentions of $582 million in 2019. These data may be subject to significant revision in the wake of the COVID-19 pandemic.

  Note to readers

Private non-profit organizations provide services to households either without charge or at prices that are not economically significant. For purposes of measuring research and development (R&D) performance, private non-profit organizations include voluntary health organizations, private philanthropic foundations and private research institutes.

The private non-profit sector is residual in nature. Private non-profit organizations that are controlled and financed by government (at least 50%) or affiliated with higher education institutions are excluded from the survey population. R&D expenditures for these excluded private non-profit organizations are included in the R&D expenditures for the government and higher education sectors. Control over private non-profit organizations may change over time, causing volatility within the sector's population.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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