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Flaherty urges more private innovation spending

09/16/2011 01:28 EDT | Updated 11/16/2011 05:12 EST

Finance Minister Jim Flaherty is calling on Canada's private sector to pump more money into research and development.

"Quite frankly, we have unacceptably low levels of support for R&D and innovation in many parts of the Canadian private sector," Flaherty said in his prepared remarks of a Friday speech at the Perimeter Institute in Waterloo, Ont.

"Every person in this room —and most outside of it in today’s Canada — knows that the global economy we now compete in is increasingly driven by new ideas and knowledge-based industries," he said.

"Despite this global reality, Canada still lags other nations in overall business expenditures on R&D. At the same time, R&D spending by business in Canada has actually been decreasing in real terms since 2006."

He said that between 2006 and 2009, R&D spending increased from government, academic and private non-profit groups, but was down for Canadian businesses when adjusted for inflation.

Failure to invest in innovation will leave the country a laggard in the digital economy, he said.

"At great expense, both economically and socially, we will be reactive rather than proactive. And our businesses will continue to lag in productivity compared to their competitors in other countries."

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