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.
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.