60% of Canadian business energy research and development spent on fossil fuels

natural gasIn-house R&D spending on to non-emitting and renewable energy declined from $644 million in 2014 to $492 million in 2015

Research and development spending on fossil fuels accounts for more than half of energy research and development by businesses, according to the latest data released by Statistics Canada.

In 2015, $1.6 billion of in-house research and development (R&D) expenditures in Canada were directed to energy-related technologies, and 59.6% ($948 million) of that energy-related spending was linked to fossil fuels, including the production and transportation of coal, oil and natural gas.

Chart 1: Energy-related in-house research and development expenditures by area of technology in Canada, 2014-2015
Energy-related in-house research and development expenditures by area of technology in Canada, 2014-2015

In 2015, in-house energy-related R&D expenditures declined for the first time since 2009. In-house energy-related R&D spending on fossil fuels fell 29.2 per cent, from $1.3 billion in 2014 to $948 million in 2015, in tandem with lower crude oil prices.

In-house R&D expenditures related to non-emitting and renewable energy declined from $644 million in 2014 to $492 million in 2015.

These expenditures comprised R&D spending on energy efficiency-related technology ($151 million), nuclear-related technology ($148 million), renewable energy resources ($122 million) and hydrogen and fuel cells ($71 million).

Manufacturers spent $303 million on in-house energy-related R&D in 2015, compared with $189 million the previous year.

Spending on in-house energy-related R&D by services-producing industries declined from $444 million in 2014 to $335 million in 2015.

Within the services sector, spending by professional services companies declined from $240 million in 2014 to $214 million in 2015.

Foreign-controlled firms perform over 1/5 of in-house energy R&D

Spending by foreign-controlled firms on in-house energy-related R&D declined from $432 million in 2014 to $324 million in 2015.

These firms continued to represent over one-fifth of all energy-related in-house R&D expenditures, with over half of this segment dedicated to fossil-fuel technologies.

In 2014, foreign-controlled firms dedicated three-quarters of their energy-related R&D spending to fossil-fuel technologies.