Top 10 tech R&D spenders in Canada 2017

Canada's top RD spend

Canada’s corporations increased research and development spending modestly in 2017, according to Re$earch Infosource Inc. It reached $12.83 billion overall, reflecting a rise of 1.3 per cent. With Bombardier Inc. still the leading R&D spender despite being down more than 14 per cent, the aerospace industry represented the most spending. But software and computer services firms were a close second with almost $2 billion in combined spending. Here, we’re looking at the top 10 tech firms spending on R&D in Canada (also including the communications equipment category). See the full top 100 list at Research Infosource Inc.

#1 IBM Canada Ltd. (8th overall)

FY 2016 spend: $478 million 2015: $477 million
Revenue: Not disclosed Research Intensity (% of revenue): N/A

We covered some of IBM’s R&D activities out of its York Region-based offices earlier this year. It just opened a new IBM Innovation Space in May to invite startups to work alongside IBM researchers in developing their own IP. The IBM Cognos team out of Ottawa focuses on developing deep analytics capabilities that are used in the Watson AI product. Out west, IBM worked with the University of Alberta to publish new data in the journal Schizophrenia demonstrating AI and machine learning helped predict instances of schizophrenia with 74 per cent accuracy.

#2 Constellation Software Inc. (9th overall)

FY 2016 spend: $415 million 2015: $349 million
Revenue: $2.8 billion Research Intensity: 14.8%

Constellation Software Toronto HQ

Constellation ranks third among “Tier 1” companies in terms of R&D spending as a percentage of its revenue, according to Research Infosource. Focused on acquiring vertical market software firms, Constellation has been on a healthcare-focused acquisition streak this year, with 14 completed before Sept. 30, totaling more than $64 million. Constellation does not centralize its R&D activities but keeps them distributed among its acquired business units.

#3 BlackBerry Ltd. (10th overall)

FY 2016 spend: $405 million 2015: $600 million
Revenue: $1.7 billion Research Intensity: 23.4%

BlackBerry Waterloo HQ

BlackBerry is ranked first among other “Tier 1” companies in terms of R&D spending as a percentage of its revenue, according to Research Infosorce. BlackBerry’s investment is focused on cyber security, embedded systems, and autonomous driving. It signed a deal with Delphi Automotive PLC to provide its QNX operating system to Delphi’s automated driving solution. In past years, BlackBerry was Canada’s #1 R&D spender. The dip in spending reflects the company’s new strategy to focus on higher margin devices that don’t require as much R&D spending as smartphones.

#4 Ericsson Canada Inc. (11th overall)

FY 2016 spend: $315 million 2015: $316 million
Revenue: Not disclosed Research Intensity: N/A

At the end of 2016, Ericsson opened up a 20,000 square meter research facility in Vaudreuil-Dorion, Que. It’s the firm’s third Global ICT Center (after two built in Sweden in September 2014 and 2016) and dedicated to emulating operators’ mobile networks to test new solutions as if they were running on a live network. Ericsson hold more than 39,000 patents. It has operated in Canada since 1953 and employs more than 3,500 across the country.

#5 CGI Group Inc. (13th overall)

FY 2016 spend: $267 million 2015: $257 million
Revenue: $10.7 billion Research Intensity: 2.5%

CGI Montreal HQ

Founded in 1976, CGI is one of the largest independent IT and business process services companies in the world, with 70,000 professionals on staff. In 2017, it increased R&D spending in every jurisdiction that it operates in. It’s been awarded at the federal level, and at the provincial level in Quebec, CGI has been noted for its virtual desktop infrastructure in the past, particularly for a 2014 project with the Laurentian Bank of Canada.

#6 OpenText Corp. (15th overall)

FY 2016 spend: $257 million 2015: $251 million
Revenue: $2.4 billion Research Intensity: 10.6%

opentext office

OpenText CEO Tom Jenkins literally wrote the book on Canadian innovation this year (Ingenious: How Canadian Innovators Made the World Smarter, Smaller, Kinder, Safer, Healthier, Wealthier, Happier) alongside retired Governor General David Johnston. The enterprise information management software firm also has been investing in artificial intelligence capabilities. It launched its new AI-driven Magellan platform in July. Its capabilities include data analysis to help businesses find insights more quickly and customization by data scientists to tune algorithms for users.

#7 AMD Canada (16th overall)

FY 2016 spend: $219 million 2015: $185 million
Revenue: Not disclosed Research Intensity: N/A

AMD Canada in Markham

Much of this microprocessor manufacturer’s Canadian base came from acquiring Markham, Ont.-based ATI Technologies Inc. in 2006. Today the majority of the workers based in that same office are dedicated to R&D and technical functions. AMD Canada has contributed technology that has surfaced in Microsoft’s Xbox, Nintendo Wii, and Sony PlayStation. The office is a hub for advanced graphics and multimedia software, as well as semi-conductor chip design.

#8 Cisco Canada (22nd overall)

FY 2016 spend: $133 million 2015: $115 million
Revenue: Not disclosed Research Intensity: N/A

One major source of investment for this networking and telecommunications technology firm is a $4 billion investment to create a new R&D centre in Ottawa. Cisco has been committed to growing its presence in Ontario into a global R&D hub since 1997 when it acquired Skystone Systems. Work out of the Ottawa-based office includes routing technology that is core to Cisco’s Next Generation Networks line of products. More recent investments include its new Toronto-headquarters and a $100 million Internet of Everything lab where it is developing machine-to-machine solutions.

#9 Mitel Networks Corp. (24th overall)

FY 2016 spend: $128 million 2015: $168 million
Revenue: $1.3 billion Research Intensity: 9.8%

Mitel is a telecommunications equipment and software firm that has about 3,600 employees total, with about 1,400 of those just outside of Ottawa, where it conducts most of its R&D activities. Mitel exited the mobile business at the end of last year, selling that division to Xura Inc. But earlier this year it acquired rival ShoreTel. It plans to consolidate R&D activities with ShoreTel’s. Mitel’s business used to be all about selling small PBX boxes, but now it is shifting to cloud-based services.

#10 Huawei Canada (25th overall)

FY 2016 spend: $127 million 2015: $94 million
Revenue: Not disclosed Research Intensity: N/A

Huawei Canada HQ

Huawei ranks second in terms of increase in spending growth among “Tier 1” R&D spenders, according to Research Infosource, increasing it by 35.8 per cent in 2017. It opened its first research lab in Ottawa in 2009 and has since expanded to include operations in Waterloo, Ont. and Markham, Ont. It employs 425 researchers and engineers and has filed more than 1,200 patents since 2011. Currently, 5G wireless is a major focus area for its research activities.


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Brian Jackson
Former editorial director of IT World Canada. Current research director at Info-Tech

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