O&G Industry No Heavyweight In R&D Spending
- Published: Monday, 03 November 2014
- Author: Maurice Smith
Canada’s leading firms raised their combined research spending to $12.5 billion in fiscal 2013, an increase of four per cent over the previous year, according to the annual Canada’s Top 100 Corporate R&D Spenders list released Monday by Research Infosource Inc., Canada’s Source of R&D Intelligence. Canada’s energy companies were a minor player on the list. Of the top 100, just eight represent the energy/oil and gas industry.
And the eight energy/oil and gas companies combined spend ($1.14 billion) did not even amount to that of second place Blackberry Limited ($1.32 billion, down 12 per cent from 2012). The top R&D investor was Bombardier Inc., at $2.19 billion, up 15.4 per cent.
Canada’s top energy/oil and gas was Canadian Natural Resources Limited, placing eighth at $390 million invested in R&D (up 44 per cent from previous year).
Research intensity (R&D as a per cent of revenue) is particularly low in the oil and gas sector. For example, while the top two R&D spenders invested 12 and 19 per cent of revenue (Bombardier and Blackberry respectively), research intensity in the energy sector ranged from 0.3 per cent to CNRL’s high of 2.4 per cent.
Rounding out the top five R&D spenders were Magna International Inc. ($576.75 million), BCE Inc. ($575.4 million) and Pratt & Whitney Canada Corp. ($544.78 million).
The other seven energy companies in the top 100 were: Cenovus Energy Inc. (13th, $213 million, down 19 per cent from the previous year); Imperial Oil Limited (15th, $199 million, down one per cent); Syncrude Canada Ltd. (17th, $185 million, up 18 per cent); Trican Well Services Ltd. (44th, $48.7 million, up 12 per cent); Encana Corporation (47th, $42.71 million, down 66 per cent); Total E&P Canada Ltd. (55th, $33 million, up three per cent); and TransCanada Corporation (64th, $23.91 million, up 204 per cent). (In the case of Total, a foreign subsidiary, revenue and R&D spending is for Canadian operations only.)
The information and communications technology (ICT) sector performed admirably well, according to Research Infosource Inc. Although the leading spending sector was aerospace with 23 per cent of the top 100 total, aggregating the R&D spending of various ICT-related sub-sectors put the ICT industry in the lead in research investment with 40.3 per cent of the top 100 total, it said in its news release.
Central Canada dominated R&D spend, with Ontario home to 44 per cent of all top 100 research spending, compared with 40 per cent in Quebec, 11 per cent on the Prairies, and five per cent in British Columbia, it reported.
“The fiscal 2013 result is respectable,” said Ron Freedman, chief executive officer of Research Infosource. “But, fiscal 2013 research spending growth lagged last year’s 12.6 per cent improvement even though corporate revenues were up by seven per cent.”
