The Canadian Medical Devices Manufacturing Sector, 2023
Release date: December 22, 2025
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Background
Medtech Canada, the national
association that represents medical technology manufacturers, commissioned this
study to assess the economic impact of the Canadian medical devices
manufacturing sector on the national economy for 2023.Note
The study uses a comprehensive set
of indicators that include concepts such as direct, indirect and induced value
added, research and development, job creation, and trade performance.
The results indicate that the
sector contributed a total gross value added of $13.7 billion in 2023,
comprising $7.3 billion from direct impacts, 53.4% of the sector’s total value
added, $3.0 billion (22.2%) from indirect impacts, and $3.3 billion (24.4%)
from induced impacts. Canada-wide employment totaled 88,394 full-time
equivalent (FTE) positions and research and development expenditures were
estimated between $404 million and $445 million, with 84.9% allocated to
experimental development. International trade activity was also significant,
with the United States identified as the leading trading partner for exports.
The content of this study, which
includes the selection of units and variables, definition of the study
population, and contextual analysis of the results, was conducted independently
by Statistics Canada.
Acknowledgments
The authors would like to acknowledge the
valuable feedback and contributions of Thomas Wood, Charlene Lonmo, and Susan
Demedash.
Introduction
This study examines the Canadian medical
devices manufacturing sector’s contribution to the national economy in 2023. It
draws on Statistics Canada’s business data to generate a broad set of economic
indicators, including direct, indirect, and induced impacts, as well as research
and development, employment, and trade performance. Additional financial
indicators, such as operating revenue and expenses, and assets and liabilities,
are added to show the sector’s financial position.
The Canadian medical devices
manufacturing sector encompasses diverse businesses which contribute to the
development of diagnostic technologies and surgical instruments. The
sector’s impact is amplified by its strong linkages to other industries. It
draws on inputs such as specialized materials, advanced manufacturing
techniques, and digital technologies, while its outputs extend into areas
including product distribution, integration into clinical settings, and ongoing
service and support. This interconnectedness also enables collaboration with
research institutions and healthcare providers.
Complementing these relationships, businesses in the sector actively invest in in-house research and development (R&D), which leads to the advancement of medical technologies, cultivates a skilled workforce and stimulates regional economic growth.
1. Study population
The term “Canadian medical
devices manufacturing sector” is a generic designation developed for the
purposes of this study. The name was
chosen to reflect the core operations of most businesses in the study
population, which correspond to NAICSNote code 33911.
This classification predominantly encompasses manufacturers of medical
equipment and supplies.
Statistics Canada expanded the
study population to include organizations with core operations under various
NAICS codes that also conduct activities connected to medical device
manufacturing. These included firms engaged
in research and development within the physical, engineering, and life sciences
(NAICS 541710), merchant wholesalers who focus on professional machinery,
equipment, and supplies (NAICS 417930), and businesses that produce measuring,
medical, and controlling devices (NAICS 334512).
A two-step process was used to
identify businesses within the additional NAICS. First, the Medical Devices Establishment License Listing (MDEL) and Medical Devices Active Licence Listing (MDALL)
databases from Health Canada were used to cross-reference with businesses
classified under the additional NAICS codes for the purpose of identifying
sector participation. MDEL lists
establishments authorized to manufacture Class I devices or import/distribute
any class of device in Canada, while MDALL provides information on licensed
Class II-IV medical devices.Note Next, businesses were matched with Statistics Canada’s Business
Register to determine their structure, applicable NAICS codes, and taxation
data.Note For those identified, Statistics
Canada determined what percentage of their activities pertained to medical
device manufacturing.
In total, the study population
consisted of 3,361 enterprises.
2. Economic footprint
2.1 Value added and output
A sector’s significance in the
economy can be evaluated by analyzing its gross value added (GVA) and output.
Value added represents the net contribution
of a sector to Gross Domestic Product (GDP) by capturing the ‘new’ value
created through production, after accounting for the cost of intermediate goods
and services. As the core component of GDP, GVA is a direct and reliable
indicator of economic impact.
By contrast, output reflects the total value
of goods and services produced by the sector. While it includes intermediate
consumption, it offers important insight into the scale and complexity of
economic activity, helping contextualize the sector’s footprint within supply
chains and markets.
Together, these measures serve as tools to
evaluate both the depth (value added) and breadth (output) of a sector on the
economy.
2.1.1 Value added
In 2023, the Canadian medical
devices manufacturing sector contributed $13.7 billion in gross value added
(GVA). This contribution includes direct impacts from production and
employment, indirect impacts from spending on intermediate goods and services,
and induced impacts from labour income circulating through the broader economy.
A breakdown of the impacts shows
that direct impacts were $7.3 billion, making up 53.4% of GVA. Indirect impacts
came to $3.0 billion, representing 22.2%, and induced impacts were $3.3 billion
at 24.4%.
Figure 1 start
Data table for Figure 1
| 2023 | Gross Value Added (GVA) |
|---|---|
| millions of dollars | |
| Note: The Canadian medical devices manufacturing sector’s total GVA was $13,693 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Direct Impact | 7,314 |
| Indirect Impact | 3,043 |
| Induced Impact | 3,336 |
Figure 1 end
Value added spread across
the country
Value added within the sector was
generated in all provinces and territories across Canada. Ontario contributed
nearly two thirds (61.1%) of the total value added, amounting to $8.4 billion.
Quebec ranked second with 19.3% at $2.6 billion, followed by British Columbia
and the Territories combined, which accounted for 8.9% at $1.2 billion.
2.1.2 Output
The Canadian medical devices
manufacturing industry’s output totaled $24.4 billion in 2023. Direct impacts accounted
for 52.4% of total output ($12.8 billion), while indirect and induced impacts
contributed 23.8% ($5.8 billion) and 23.9% ($5.8 billion), respectively.
Figure 2 start
Data table for Figure 2
| 2023 | Total Output |
|---|---|
| millions of dollars | |
| Note: The Canadian medical devices manufacturing sector’s total output was $24,394 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Direct Impact | 12,780 |
| Indirect Impact | 5,794 |
| Induced Impact | 5,820 |
Figure 2 end
Output reflected nationwide
On a provincial basis, Ontario
was the largest contributor at 58.8% ($14.3 billion), followed by Quebec with
22.2% ($5.4 billion), and British Columbia together with the Territories at 8.6%
($2.1 billion).
2.2 Employment and labour income
In 2023, the sector employed 88,394
full-time equivalent positions (FTEs), which includes full-time, part-time, and
seasonal workers. Direct economic impacts comprised 55.2% (48,777 FTEs) of the
total, while indirect impacts represented 22.6% (19,964 FTEs) and induced
impacts accounted for 22.2% (19,653 FTEs).
Across Canada, Ontario had the
highest FTE employment at 50,910 (57.6%), followed by Quebec with 19,429
(22.0%), and British Columbia together with the Territories at 9,116 (10.3%).
Figure 3 start
Data table for Figure 3
| 2023 | Employment | Labour Income |
|---|---|---|
| FTEs | millions of dollars | |
| Note: The Canadian medical devices manufacturing sector’s total jobs were 88,394 FTEs, and total labour income was $8,655 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
||
| Direct Impact | 48,777 | 5,274 |
| Indirect Impact | 19,964 | 1,845 |
| Induced Impact | 19,653 | 1,536 |
Figure 3 end
Total labour income for the
sector in 2023 was $8.7 billion. This figure comprises wages, salaries,
employers’ social contributions for employees, and income accrued by
self-employed individuals. Most of the labour income arose from direct impacts
(60.9%) at $5.3 billion, followed by indirect impacts (21.3%) at $1.8 billion,
and induced impacts (17.7%) at $1.5 billion.
Consistent with employment
distribution patterns, Ontario accounted for 61.5% ($5.3 billion), Quebec represented
20.4% ($1.8 billion), and British Columbia and the territories comprised 9.1%
($789 million).
2.3 Trade
The Canadian medical devices
manufacturing sector is well integrated into global trade, engaging in both
export and import activities to meet domestic healthcare and industrial needs.
In 2023, the sector exported to 141 countries and imported from 169 countries.
Notably, about half (46.9%) of exporting firms operated across multiple
international markets.
Exports totalled $2.7 billion in
2023, with the Unites States being the largest export market
($2.0 billion) for the sector’s goods.
Figure 4 start
Data table for Figure 4
| 2023 | Millions of dollars |
|---|---|
| Note: The Canadian medical devices manufacturing sector’s total goods exports was $2,733 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Region | |
| Africa | 4 |
| Americas (Excluding USA) | 78 |
| Asia and Oceania | 259 |
| Europe | 386 |
| United States | 2,006 |
Figure 4 end
Imports totalled $10.7 billion in
2023, with the US again being the primary market ($4.8 billion).
Figure 5 start
Data table for Figure 5
| 2023 | Millions of dollars |
|---|---|
| Note: The Canadian medical devices manufacturing sector’s total goods imports was $10,689 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Region | |
| Africa | 3 |
| Americas (Excluding USA) | 1,123 |
| Asia and Oceania | 2,042 |
| Europe | 2,748 |
| United States | 4,774 |
Figure 5 end
According to the Harmonized
System (HS) used for classifying traded goods, more than half of the exports
and imports in the sector were categorized under Chapter 90, which encompasses
optical, photographic, and medical instruments. Specifically, HS 90 exports
constituted 56.0% ($1.5 billion) of total exports, while HS 90 imports
comprised 53.6% ($5.7 billion) of total imports.
Figure 6 start
Data table for Figure 6
| 2023 | ||
|---|---|---|
| Exports | Imports | |
| millions of dollars | ||
| Note: The Canadian medical devices manufacturing sector’s total exports were $2,733 million, while goods imports were $10,689 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
||
| Chapter 90 | 1,531 | 5,734 |
| Other Chapters | 1,202 | 4,956 |
Figure 6 end
3. Research and development
The Canadian medical devices
manufacturing sector engages in research and development (R&D) by incorporating
technologies such as microelectronics, advanced materials, biotechnology, and
artificial intelligence (AI) to create new or improved medical devices. The
sector’s R&D initiatives are driven by several key factors, such as
demographic shifts due to an aging population, an increasing rate of chronic
diseases, and the need for readiness for potential future pandemics.Note
3.1 Measuring research and development
Research and development
(R&D) expenditures for the Canadian medical devices manufacturing sector
were collected through Statistics Canada’s Annual Research and Development in
Canadian Industry (RDCI) survey. The RDCI is the primary source of information
on R&D activities among Canadian companies and industrial non-profit
organizations, as it provides detailed data on expenditures, personnel, and
funding sources across all industries. The measurement of R&D in the survey
is based on international standards set out in the Frascati Manual produced by
the Organisation for Economic Cooperation and Development (OECD).Note
R&D expenditures reported in
the RDCI survey are categorized as either in-house or outsourced activities.
In-house R&D refers to research performed by the organisation, encompassing
costs such as salaries, materials, and equipment, which reflect internal
innovation capabilities. Outsourced R&D refers to funding allocated to
external entities—such as universities and partner companies—to conduct research
on behalf of the organization. Together, these strategies enable businesses in
Canada to leverage both internal expertise and external partnerships to drive
innovation.
3.2 Sector research and development expenditures
To avoid double counting due to
domestic outsourcing, Statistics Canada reports total R&D expenditures as a
range, providing both lower and upper bounds. This approach accounts for cases
where one company funds R&D and another performs it, potentially leading
both to report the same activity.
To address this reporting issue,
the lower bound encompasses both internal R&D activities as well as
outsourcing to international partners, whereas the upper bound incorporates all
outsourced expenditures, including those incurred domestically and internationally.
Overall, the
total R&D expenditures by the sector were estimated to range between
$404 million to $445 million.
In-house research and development
expenditures
In 2023, the sector spent $370 million on
in-house R&D.
In-house expenditures can be
further categorized into current and capital expenditures. Current expenditures
totaled $361 million, making up 97.6% of overall in-house costs.
Figure 7 start
Data table for Figure 7
| 2023 | Millions of dollars |
|---|---|
| Note: The Canadian medical devices manufacturing sector’s total in-house R&D expenditure was $370 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Total in-house R&D | 370 |
| Current in-house R&D | 361 |
| Capital in-house R&D | 9 |
Figure 7 end
Wages and salaries represented the
largest share of current in-house expenses, totalling $226 million in 2023.
This expense supported a workforce of 2,513 FTEs, comprised of researchers and
research managers (1,652 FTEs), technical,
administrative and support staff (746 FTEs), and on-site consultants and
contractors (115 FTEs). The majority of personnel were scientists, social scientists, engineers and researchers (1,407
FTEs).
Figure 8 start
Data table for Figure 8
| 2023 | FTEs |
|---|---|
| Note: The Canadian medical devices manufacturing sector’s total R&D personnel were 2,513 FTEs in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Researchers and research managers | |
| Scientists, social scientists, engineers and researchers | 1,407 |
| Senior research managers | 245 |
| Technical, administrative and support staff | |
| Technicians, technologists and research assistants | 611 |
| Other technical, administrative and support staff | 135 |
| On-site consultants and contractors | |
| On-site consultants and contractors | 115 |
Figure 8 end
Additional current expenditures,
which included R&D support services, materials, and other related costs,
amounted to $134 million.
Capital expenditures, which refer
to investments in fixed assets utilized in the organisation’s operations or
leased to third parties, comprised the remaining 2.4% ($9 million) of overall in-house
expenditures.
3.3 Regional distribution of in-house R&D
expenditures and personnel
Ontario accounted for 44.1% ($163
million) of in-house R&D expenditures, Quebec for 24.3% ($90 million) and the
rest of Canada for 31.6% ($117 million).Note A similar ranking was observed in
full-time equivalent (FTE) R&D personnel: Ontario employed 37.9% (952
FTEs), Quebec comprised 26.4% (664 FTEs), and the rest of Canada represented 35.7%
(898 FTEs).
Figure 9 start
Data table for Figure 9
| 2023 | ||
|---|---|---|
| In-house R&D Expenditures | R&D personnel | |
| percentage of the total | ||
| Note: The R&D medical devices manufacturing sector’s total in-house R&D expenditure was $370 million and total R&D personnel were 2,513 FTEs in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
||
| Quebec | 24.3 | 26.4 |
| Ontario | 44.1 | 37.9 |
| Rest of Canada | 31.6 | 35.7 |
Figure 9 end
3.4 Fields of research
R&D spending is classified
into six main fields in accordance with the guidelines established by the Frascati
Manual: Natural Sciences, Engineering and Technology, Medical and Health
Sciences, Agricultural and Veterinary Sciences, Social Sciences, and
Humanities. Each of these fields comprise various subcategories.
In-house R&D expenditures by the Canadian
medical devices manufacturing sector spanned most of the core fields. However,
spending was primarily allocated to engineering and technology ($159 million),
with an emphasis on medical and mechanical engineering; and medical and health
sciences ($146 million), with a focus on medical biotechnology and clinical
medicine.
Figure 10 start
Data table for Figure 10
| 2023 | Millions of dollars |
|---|---|
| Note: The R&D medical devices manufacturing sector’s total in-house R&D expenditure was $370 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Engineering and technology | |
| Medical engineering | 68 |
| Mechanical engineering | 56 |
| Other engineering and technologies | 34 |
| Medical and health sciences | |
| Medical biotechnology | 79 |
| Clinical medicine | 46 |
| Health sciences | 11 |
| Other medical sciences | 10 |
| Basic medicine | 1 |
| All other fields of research | |
| All other fields of research | 64 |
Figure 10 end
3.5 The nature of R&D work
The type or nature of research work for
businesses is a key factor in how research activities are leveraged and
applied. The nature of research is structured according to 3 approaches – basic
research, applied research and experimental development. Basic research
involves gaining new knowledge without a specific practical application in
mind. Applied research aims to solve a specific, practical problem using
existing knowledge. Finally, experimental development aims to create or improve
products, processes, or technologies.
Almost eighty-five percent of the
sector’s in-house R&D expenditures in 2023 were allocated to experimental
development, totaling $314 million. Applied research represented $46 million of
spending and basic research accounted for $9 million.
Figure 11 start
Data table for Figure 11
| 2023 | Millions of dollars |
|---|---|
| Note: The R&D medical devices manufacturing sector’s total in-house R&D expenditure was $370 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Experimental development | 314 |
| Applied research | 46 |
| Basic research | 9 |
Figure 11 end
3.6 Source of funds for R&D expenditures
The source of R&D funding is also an
important factor that reveals the extent to which innovation is supported by
domestic versus foreign stakeholders. This distinction helps inform policy
and investment decisions by highlighting national capacity and international
engagement in research efforts.
Total funds from domestic sources
amounted to $293 million in 2023, which comprised 79.2% of overall in-house
expenditures in the sector. Most of this expenditure was self-funded by the businesses
($229 million).
International sources contributed
the remaining 20.8% of in-house expenditures, totalling $77 million.
Figure 12 start
Data table for Figure 12
| 2023 | Millions of dollars |
|---|---|
| Note: The R&D medical devices manufacturing sector’s total in-house R&D expenditure was $370 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Canadian sources | |
| Funds from business | 258 |
| All other Canadian sources | 35 |
| Foreign sources | |
| Foreign sources | 77 |
Figure 12 end
3.7 R&D country of control
Canadian-controlled enterprises within
the Canadian medical devices manufacturing sector accounted for 69.2% of
in-house R&D expenditures ($256 million) in 2023. The remaining 30.8% ($114 million) of expenditures were made by
foreign-controlled corporations, with 45.6% of this portion originating from
entities based in the United States.
Within the sector, Canadian-owned
businesses accounted for 72.3% of total FTEs (1,818), while the remaining 695
FTEs were employed by foreign-owned enterprises operating in Canada. Among
those working for foreign-controlled firms, approximately 45.3% were employed
by organizations headquartered in the United States.
Figure 13 start
Data table for Figure 13
| In-house R&D expenditures | Outsourced R&D expenditures | R&D personnel | |
|---|---|---|---|
| millions of dollars | FTEs | ||
| Note: The R&D medical devices manufacturing sector’s total in-house R&D expenditure was $370 million, total outsourced R&D expenditure was $75 million and total R&D personnel were 2,513 FTEs in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|||
| Canada | 256 | 33 | 1,818 |
| United States | 52 | 6 | 315 |
| Other | 62 | 36 | 380 |
Figure 13 end
3.8 Outsourced research and development expenditures
In 2023, the Canadian medical
devices manufacturing sector outsourced $75 million in research and development
activities to external organizations. Such expenditures occur when businesses
engage outside entities to conduct R&D on their behalf, often due to
specialized expertise available externally—either within Canada or
internationally—or for cost efficiency reasons. Of these external expenditures,
54.7% ($41 million) were directed to other entities within Canada, while the
remaining funds were allocated to organizations outside the country.
Figure 14 start
Data table for Figure 14
| Millions of dollars | |
|---|---|
| Note: The R&D medical devices manufacturing sector’s total outsourced R&D expenditure was $75 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Outsourced R&D | |
| Outsourced in Canada | 41 |
| Outsourced outside of Canada | 34 |
Figure 14 end
Of the $41 million in outsourced R&D
within Canada, $33 million was contracted out by Canadian-controlled businesses,
with the remainder spent by foreign-controlled firms.
3.9 Research and development expenditures for the
Scientific and Experimental Development Program
The Scientific Research and
Experimental Development (SR&ED) Program, overseen by the Canada Revenue
Agency, is a tax incentive initiative designed to encourage research and
development efforts across businesses of all sizes and industries. Eligible organizations can receive either a tax deduction or an
investment tax credit, with rates varying from 15.0% to 35.0% depending on
organizational size and classification. Certain expenses, such as capital
expenditures and research and development activities undertaken outside of
Canada, are excluded from program eligibility.
In 2023, businesses in the Canadian medical
devices manufacturing sector claimed a total of $208 million in allowable
expenditures, consisting of $168 million in in-house R&D and $40 million in
outsourced R&D within Canada.
Figure 15 start
Data table for Figure 15
| 2023 | Millions of dollars |
|---|---|
| Note: The R&D medical devices manufacturing sector’s total allowable SR&ED expenditure was $208 million in 2023. Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Total Allowable SR&ED Expenditures | |
| In-house SR&ED expenditures | 168 |
| Outsourced in Canada SR&ED expenditures | 40 |
| In-house Allowable SR&ED Expenditures | |
| Canada | 136 |
| Foreign | 31 |
| Outsourced in Canada Allowable SR&ED Expenditures | |
| Canada | 23 |
| Foreign | 17 |
Figure 15 end
Of the allowable in-house claims,
81.0% ($136 million) were attributed to Canadian-controlled businesses, with
the remainder to foreign-controlled firms. For domestic outsourced claims ($23
million), 57.5% went to Canadian-controlled businesses.
4. Financial indicators
Financial indicators provide an
additional means for analysing the sector, complementing data related to GDP,
employment, trade, and research and development. Although these indicators do not directly affect GDP, they
illustrate the sector’s financial condition by showing its size, investment,
and fiscal role.
In 2023, the Canadian medical
devices manufacturing sector reported operating revenue of $22.6 billion,
expenses of $21.8 billion, and an operating profit of $797 million. It held
assets totaling $29.6 billion, liabilities of $12.9 billion, and paid $460
million in taxes—split between $263 million at the federal level and $197
million provincially.
Figure 16 start
Data table for Figure 16
| 2023 | Millions of dollars |
|---|---|
| Note: Due to rounding, components may not add to the total.
Source: Statistics Canada, custom tabulation, reference year 2023. |
|
| Assets and Liabilities | |
| Total assets | 29,568 |
| Total Liabilities | 12,881 |
| Operating Revenue and Expenses | |
| Operating revenue | 22,633 |
| Operating expenses | 21,836 |
| Taxes | |
| Total federal taxes | 263 |
| Provincial income taxes | 197 |
Figure 16 end
5. Limitations
This
study evaluates the economic impact of Canada’s medical devices manufacturing
sector in 2023, though some limitations exist. First, the analysis
is based on a single year of data, which restricts the ability to identify
trends or assess changes over time. Second, the sector examined in this report
does not correspond to an official industry classification; rather, it is a
constructed grouping that combines businesses from several NAICS codes to
capture activities relevant to the study’s objectives. Lastly, the financial indicators
include a limited set of indicators and do not capture the full complexity of
the sector’s financial operations.
Conclusion
This study provides an economic
overview of the Canadian medical devices manufacturing sector and its
importance in the Canadian economy in 2023.
The results indicate that the
sector generates measurable direct, indirect, and induced impacts, engages in
research and development activities, supports employment, and contributes to
national output and value added.
A. Appendix
A.1 Glossary
The Annual Survey of
Research and Development in Canadian Industry (RDCI) is an annual survey
that collects R&D expenditures and personnel data used to monitor science
and technology related activities of business and industrial non-profit
organizations in Canada.
Applied research is original investigation undertaken to acquire new
knowledge. It is, however, directed primarily towards a specific, practical aim
or objective. See also basic research; experimental development.
Basic research is experimental or theoretical work undertaken
primarily to acquire new knowledge of the underlying foundations of phenomena
and observable facts, without any particular application or use in view. See
also applied research; experimental development.
Business Enterprise
Research and Development (BERD) is
all research and development performed in Canada by the business enterprise
sector, as measured by the Annual Survey of Research and Development in
Canadian Industry performed by Statistics Canada.
Capital R&D
expenditures are the annual gross
amount paid for the acquisition of fixed assets that are used repeatedly or
continuously in the performance of R&D for more than one year. They should
be reported in full for the period when they took place, whether acquired or developed
in-house, and should not be registered as an element of depreciation.
Country of control is the country of residence of the ultimate
controlling parent corporation, family, trust, estate, or related group. Each
subsidiary within the global enterprise is assigned the same country of control
as its parent. Country of control data are derived from ownership
questionnaires filed annually with Statistics Canada by corporations subject to
the Corporations Returns Act, and from information obtained from the
Canada Revenue Agency’s administrative records.
Current R&D
expenditures are composed of labour
costs and other current costs (including for external R&D personnel) used
in R&D. Services and items (including equipment) used and consumed within
one year are current expenditures. Annual fees or rents for the use of fixed
assets should be included in current expenditures, as should overhead costs
associated with R&D. See also other current costs.
Direct impacts are the effects directly attributed to an industry’s
production. See also indirect impact; induced impact.
An economic footprint
study aims to measure the total economic impact (direct, indirect, or
induced) of an organization, sector or industry on a specific country or region
during a given period. Economic impacts typically considered include gross
value added and employment data. See also direct impact; indirect impact;
induced impact.
Employees are all persons who work in or for the reporting
unit, who have a contract of employment with the unit and who receive
compensation in cash or in kind at regular intervals of time.
Experimental development is systematic work, drawing on
knowledge gained from research and practical experience and producing
additional knowledge, which is directed to producing new products or processes
or to improving existing products or processes. See also applied
research; basic research.
Exports are goods produced or manufactured in Canada that are
subtracted from the stock of material resources in Canada, as a result of their
movement out of the country.
A foreign-controlled company is any company whose country of control is not Canada. See country of control.
Full-time equivalent
(FTE) is the total hours worked
divided by average annual hours worked in full-time jobs.
Full-time equivalent
(FTE) R&D personnel is
defined as the ratio of working hours actually spent on R&D during a
specific reference period (usually a calendar year) divided by the total number
of hours conventionally worked in the same period by an individual or by a
group.
Gross Domestic Product
(GDP) is the total unduplicated value
of the goods and services produced in the economic territory of a country or
region during a given period.
Gross value added is a measure of the contribution that a producer,
industry or sector makes to GDP. It is defined as the value of output less the
value of intermediate consumption. See also gross domestic product (GDP) and
intermediate consumption.
Imports are goods that have entered the country by crossing
territorial (customs) boundaries, whether for immediate domestic consumption or
for storage in customs warehouses. Re-imports are included in Canadian trade
data. These are goods, materials or articles that are imported in either the
same condition in which they were exported or after undergoing repair or minor
alterations (e.g., blending, packaging, bottling, cleaning, or sorting) that
leave them essentially unchanged. Domestic re-imports are goods of Canadian
origin, whether grown, extracted, or manufactured in Canada that are exported
to another country and then returned to Canada in ‘the same state’ as they were
sent out. See also exports.
Indirect impacts are upstream economic activities associated with
supplying intermediate inputs (the current expenditures on goods and services
used up in the production process) to the directly impacted industries. See
also direct impact; induced impact.
Induced impacts are additional economic activities derived from the
labour income generated by both the direct and indirect effects when spent in
the marketplace. See also direct impact; indirect impact.
An industry is a
group of establishments engaged in the same, or similar, kinds of economic
activity. See also North American Industry Classification System (NAICS);
sector.
In-house R&D is expenditures within Canada for
R&D performed within this business by employees or self-employed
individuals or contractors who are working on site on a business’s R&D
projects.
Intermediate consumption is the products used by an industry to produce
outputs. These products may come from domestic production or from imports. See
gross value added.
Labour income consists of the sum of wages and salaries and
employer’s social contributions of employees and the labour income of the
self-employed.
North American Industry
Classification System (NAICS) is a
business-classification system developed through a partnership among the United
States, Mexico, and Canada. Companies are classified by their same or similar
production processes. NAICS Canada 2022 Version 1.0 divides the Canadian
economy into 20 sectors, 99 subsectors, 323 industry groups, 695 industries and
922 Canadian industries. See also sector; industry.
Other current costs are non-capital purchases of materials, supplies,
equipment, and services to support R&D performed by the reporting unit in
the reference year. Examples are water and fuel (including gas and
electricity); books, journals, reference materials, subscriptions to libraries,
scientific societies, etc.; imputed or actual costs of small prototypes or
models made outside the reporting unit; and materials for laboratories (e.g.,
chemicals, animals, etc.). Other current costs include royalties or licences
for the use of patents and other intellectual property rights, the lease of
capital goods (machinery and equipment, etc.) and the rental of buildings to
support R&D performed by the reporting unit in the reference year. Overhead
costs associated with R&D are also included in other current costs. See
also current R&D expenditures.
Output consists primarily of the value of goods and services
produced by an industry. It should be noted that this value is not the same as
revenue generated from the sale of goods and services, as sales can be affected
by additional factors such as pricing strategies and marketing efforts.
Outsourced R&D are payments made within or outside Canada to other
businesses, organizations, or individuals to fund R&D performance through
grants, fellowships, or contracts.
R&D personnel are all persons engaged directly in R&D, whether
employed by the reporting unit or external contributors fully integrated into
the reporting unit’s on-site R&D activities, as well as those providing
direct services for the R&D activities (such as R&D managers,
administrators, technicians, and clerical staff).
The reporting unit is the unit from which data are reported. This corresponds to the unit
that would receive a questionnaire or interview. In the case of administrative
data, it would correspond to the unit that is represented by the individual
record. See also 5.2 Business structures.
Research and development
(R&D) is creative and systematic
work undertaken to increase the stock of knowledge – including knowledge of
humankind, culture, and society – and to devise new applications of available
knowledge. See also applied research; basic research; experimental
development.
Researchers are professionals engaged in the conception or
creation of new knowledge. They conduct research and improve or develop
concepts, theories, models, techniques and instrumentation, software, or
operational methods.
The Scientific Research
and Experimental Development (SR&ED) Tax Incentive Program is intended
to encourage Canadian businesses of all sizes and in all sectors to conduct
R&D in Canada. These tax incentives come in three forms: an income tax
deduction, an investment tax credit (ITC), and, in certain circumstances, a
refund. Corporations, individuals, trusts, and members of a partnership can use
these Government of Canada incentives.
A sector is a
high-level section of the economy encompassing economic activity in several
related industry groups. See also industry; North American Industry
Classification System (NAICS).
A.2 Business structures
For collection purposes, Statistics Canada
distinguishes between four different business levels, all of which are present
in all businesses in Canada. These levels, from highest to lowest,
are enterprise, company, establishment, and location. For
simple businesses, particularly those where all business activities are based
in one location, there are no practical differences between the four levels.
Statistics Canada recognizes that complex businesses, which may have a head
office and separate locations for regional offices, R&D,
manufacturing, sales, etc., produce and record different types of information
at different levels within the business. Therefore, different levels of
entities are surveyed depending on the nature of the data being sought.
This study used data from several different
Statistics Canada business surveys and programs, as well as Health Canada
licencing databases available through the Open Government Portal. Data for each
of the indicators was tied to the correct reporting unit within each of the
businesses.
Data on gross value added and employment, and
all associated impacts – direct, indirect and induced – were processed at the
establishment level, the lowest level at which accounting data required to
measure production is available.
Tax data are processed by the Canada Revenue
Agency at the business number level, which generally corresponds to the company
level. Since many companies that perform R&D report Scientific
Research and Experimental Development (SR&ED) tax credit
claims, R&D data are collected at the same level as tax data to
reduce response burden by enabling reporting units to use the same accounting
level for reporting R&D.
Trade and financial data are collected at the
enterprise level, the highest level within the business structure. This is the
level at which businesses keep these types of records.
A.3 Methods
The authors undertook a thorough data review
to ensure the accuracy of all data used in this study, including information
obtained from Health Canada databases. For estimation purposes, most units
classified under NAICS 33911 were assigned a weight of 1, as this was their
sole activity. For units engaged in activities beyond NAICS 33911—including
those in other NAICS categories—revenue-based ratio analysis was applied to
isolate the portion attributable to medical device activities.
The R&D data were comprised
primarily of actual respondent data. For more information on data sources,
accuracy, and methodology of the RDCI survey please refer to
the Integrated Metadatabase, the metadata repository for Statistics Canada
products.Note
A.3.1 Economic impacts
The direct economic impacts of the Canadian Medical
Devices Manufacturing sector were measured on the basis of the sector’s outputs
and gross value added. Outputs include the measurement of goods and services
produced by an establishment. Gross value-added measures the value of output
less the value of intermediate consumption, which consists of all goods and
services used up in the course of production within an accounting period.
The calculation of the economic impacts was
derived using 2023 tax data associated with businesses in the overall sector.
This information was entered into the Statistics Canada Input-Output Model
Simulations (Statistics Canada service Input-Output Model Simulations (Interprovincial Model))
which provided estimates for the other direct impact metrics such as labour
income, jobs and FTEs, as well as the indirect and induced economic impact
for all variables.
The Statistics Canada Input-Output Model Simulations
is derived from the Supply and Use Tables (Supply and Use Tables) The model is
updated every year to coincide with the most recent version of the Supply and
Use Tables. The Input-Output model used in the economic impact study is based
on the 2022 version of the Supply and Use tables.
The impact estimates provided by the model
for output, gross value added and labour income are derived from information
included in the Supply and Use Tables. The impact estimates provided by the
model for jobs and FTEs are derived from the labour productivity and
related measures by business sector industry and by non-commercial activity
consistent with the industry accounts (Labour productivity and related measures by business sector industry and by non-commercial activity consistent with the industry accounts)
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