R&D Spending in Higher Education

Date: February 11, 2022

Higher education settings are hotbeds for innovation. Richard Hoy, President of Catax Canada, looks at the latest official data and what it means for universities and colleges.

Higher education is always a focus for R&D and the latest government data shows that this area of the country’s economy continues to be on a winning streak.

The CRA published statistics this month that underline the sector’s importance to the country. It has just posted its tenth consecutive year of growth in R&D spending, rising 4.6% — a phenomenal run that has launched the value of annual R&D expenditure to close to $16billion.

Canada had the highest education R&D intensity among the G7 countries in 2019 (with nominal GDP factored in) but R&D expenditure still varies greatly from province to province. The highest proportion of R&D spending in higher education in 2019/2020 came from Ontario, followed by Quebec, British Columbia and Alberta.

The latest data shows that British Columbia saw the greatest increase with expenditures up 7.1% to $1.9billion, with particular emphasis in the social sciences (+9.6%). The largest decrease in R&D expenditures occurred in New Brunswick, as a result of a 5% fall in expenditures in the natural sciences.

In general, spending on R&D within higher education is classified into two scientific fields — natural sciences (engineering) and social sciences (arts). As the higher education sector benefits so many organisations in Canada, there are a variety of funding sources, other than the federal government, that institutions turn to including business enterprises, private non-profit organizations, provincial governments, the foreign sector and internal funding from the institutions directly.

However, despite the overall rise in spending, there’s no room for complacency. The pace of growth in R&D expenditure has slowed, driven by smaller increases in funding from the federal government and higher education itself. Together they represent the two biggest sources of R&D funding.

So investment in R&D still needs to be encouraged and it remains to be seen whether pandemic disruption has exacerbated this slowdown, evidence of which could emerge next year.

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