Ottawa’s Mitel and Shopify among Canada’s top R&D spenders

Research Infosource released its annual report on the top 100 companies in R&D spending, and several companies with Ottawa presences were high on the list.

Ottawa-based Mitel (NASDAQ:MITL) spent $168 million on research and development in fiscal 2015 year, an increase of 28.6 per cent year-over-year and good enough to round out the top 20 spenders.

Local commerce tech firm Shopify (TSX:SHOP) (NYSE:SHOP) made the list as well, coming in just under the top 50 with $52.1 million spent this past fiscal year, an increase of 73.5 per cent from 2014 figures.

Those two companies were singled out by Navdeep Bains, Canada’s minister of innovation, science and economic development, during a May speech in Ottawa as examples of local companies that have become global communications and e-commerce powerhouses.

Overall, however, Mr. Bains decried a lack of R&D spending in Canada and described it as “persistent problem.”

Others, however, say it’s not simply a matter of dollars and cents.

Jeffrey Dale, the former president of the Ottawa Centre for Research and Innovation, noted in an OBJ column earlier this year that Nortel and BlackBerry - the latter of which is still among the top 100 R&D spenders - were once world leaders in innovation.

“However, they were slow to recognize changes in the marketplace, and when they did, their level of innovation was below what the market expected. Their first reactions were to deny the market had changed. When they finally did recognize that painful fact, they were years behind and struggling to catch up,” Mr. Dale wrote.

He argued that government research funds should be more closely aligned with national and provincial industrial strategies in addition to requiring academic institutions to develop closer linkages with corporate partners.

Mr. Dale also called for a major rethinking of the federal government’s flagship R&D incentive program, SR&ED tax credits.

Several other local firms appeared on the list including Ottawa-headquartered Halogen (TSX:HGN) and Kinaxis (TSX:KXS), following year-over-year growth of more than 20 per cent in their respective R&D spending, while DragonWave made the list despite a 7.7-per-cent decrease in spending over the same period a year ago.

Companies with Ottawa offices including BlackBerry, IBM, Ericsson, Open Text, Cisco and Huawei made the top 30 R&D companies.

In a bittersweet note, Smart Technologies (TSX:SMA), which closed its Ottawa operations two years ago, made the list as well at 46th overall.

Combined spending on R&D from the top 100 Canadian companies increased by 6.9 per cent in fiscal 2015, up to $12.84 billion from $12.02 billion a year previous.

Top-spender Bombardier (TSX:BBD.B) dwarfed spending by other companies in fiscal 2015, spending $2.29 billion compared to the next closest firm, Magna International (TSX:MA) (NYSE:MGA) with $639 million.