INVESTMENTS: BDC VIEWPOINTS STUDY SEPTEMBER Research and Market Intelligence at BDC

INVESTMENTS: BDC VIEWPOINTS STUDY SEPTEMBER 2014 Research and Market Intelligence at BDC

Executive summary > Results for 2014 tend to be more optimistic than those for 2013. Overall, over three-quarters of business leaders (78%) plan to invest in new projects within the next 12 months, up significantly from the figure last year (59%). Investment intentions are significantly higher among companies with 20 to 99 (85% for companies with 20 to 49, and 89% for those with 50 to 99 ). > The areas of investment most often selected are marketing (57%), technology (49%) and operations optimization (47%). > Regarding marketing projects, entrepreneurs plan to invest mostly in creating or re-designing a website (55%), developing new markets (50%), launching new products or services (49%), and advertising (48%). They are planning to invest a median amount of $20,000 (down from $30,000 in 2013) and will turn mainly to cash flow (53%), working capital (37%) or a line of credit (34%) to do so. > When it comes to technology, business leaders intend to invest in software (59%) and hardware (53%) for the most part. The median amount allocated to such an investment is $30,000 (up from $12,919 last year), which will be obtained mainly via cash flow (41%), a line of credit (28%) or working capital (27%). > In terms of operations optimization plans, improving operational efficiency clearly stands out as an area to invest in (86% of respondents mentioned it). The median amount of investment stands at $35,000 and that will be financed mainly by the company s cash flow (47%) or working capital (39%). > Regarding human resources, entrepreneurs are most likely to invest in hiring new skilled (79%) and training (55%). The median amount dedicated to such projects has risen significantly since last year and now stands at $40,000 (vs. $30,000 in 2013). HR projects will mostly be financed by cash flow (59%) or working capital (40%). > Last, when it comes to research and development, it appears that radical innovation projects are more popular than those related to incremental innovation. The two types of projects mentioned most often were developing (76%) or launching (56%) a new product or service. Entrepreneurs plan to dedicate more money to R&D projects than to any other type of investment, with a median amount of $70,000, mainly financed by the company s cash flow (46%), SR&ED credits (41%) and working capital (38%). 2 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Context, objectives and methodology CONTEXT AND OBJECTIVES > This is the third wave of research conducted to understand investment plans among businesses across Canada and in various industry sectors. The first wave was conducted in August 2012 and the second in September 2013. Whenever possible, results from the previous wave are presented in this report. > This year, the BDC Research and Market Intelligence team focused on quantifying the proportion of Canadian businesses that plan to pursue an investment plan in the coming year, the types of investment they intend to focus on and the amounts they have allocated. > This year s survey wave was part of a more extensive survey conducted for the Product Development team at BDC to test a conceptual loan product among panellists. Therefore, some of the questions on investments were either slightly modified or removed from the survey, to keep it to a reasonable length and in line with the product development topic. > We have presented only the results pertaining to SME investments in this document. METHODOLOGY > To achieve its research objectives, the team invited 4,076 entrepreneur and business leader members of its BDC ViewPoints panel to complete the study. The survey was available online between August 12 and 25, 2014. A total of 732 respondents completed the questionnaire. > Final results were weighted according each respondent s region and number of in order to be representative of the Canadian business landscape. Final results were analyzed and interpreted internally by the BDC Research and Market Intelligence team. > We have highlighted significant differences among sub-groups in this report. We have compared the survey s results by region, business size (number of ), sector of activity, revenue growth category and total revenue category. If no differences are highlighted in the text, it means no differences were observed among the different sub-categories. 3 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Detailed results 4 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in new projects: 2012 to 2014 Close to half of the respondents said their company definitely expects to invest in new projects within the next 12 months. > Although the question asked in 2014 slightly differs from that asked in 2013, it appears that the proportion of entrepreneurs with investment plans for the next year has increased significantly in the past 12 months. > Overall, 78% of respondents expect their company to invest in new projects within the next year (vs. 59% of companies planning to execute investment plans in 2013). More specifically, the proportion of those definitely expecting to invest during the next 12 months has increased significantly (48% vs. 31%). The proportion of those who will probably invest has remained stable (30% vs. 28%). > Differences between sub-groups: A greater percentage of high-growth companies (average annual growth in the past three years of 15% or more) said they will definitely invest in the coming year (67%+). Companies with negative growth or growth ranging between 0% and 4.9% are significantly less likely to say they will definitely invest within the next 12 months (35% and 32%, respectively). Overall, more than four out of five companies with average annual revenue growth of 5% or more over the last three years said they will definitely or probably invest. Does your company expect to invest in new projects within the next 12 months? yes : 78% yes : 59% yes : 55% 2014 (n=732) 2013 (n=735) 2012 (n=513) Yes, definitely Yes, probably No, probably not No, definitely not I don't know 48% 31% 28% 30% 28% 27% 15% 27% 29% 5% 10% 12% 2% 4% 3% Base: All respondents. s may not equal 100% due to rounding. Results presented in green and red indicate changes that are statistically significant when compared to the previous wave, conducted in 2013. Note that last year s question was slightly different: Does your company expect to execute an investment plan in the next 12 months? 5 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in new projects: Results by region and by business size (2014) Does your company expect to invest in new projects within the next 12 months? Yes, definitely Yes, probably Does your company expect to invest in new projects within the next 12 months? Yes, definitely Yes, probably Canada (n=732) 48% 30% 78% (n=732) 48% 30% 78% Atlantic (n=58) 34% 39% 73% Fewer than 5 (n=252) 47% 32% 78% Quebec (n=190) 40% 36% 76% 5 to 19 (n=277) 50% 26% 76% Ontario (n=248) 55% 26% 81% 20 to 49 (n=128) 47% 39% 85% Prairies (n=124) 48% 29% 77% 50 to 99 (n=39) 50% 40% 89% B.C. and Territories (n=112) 50% 29% 79% 100 or more (n=36) 64% 18% 82% Base: All respondents. s may not equal 100% due to rounding. 6 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

BDC Research and Market Intelligence Areas of investment: 2012 to 2014 The most frequently mentioned areas of investment among those presented were marketing, technology and operations optimization. > The question regarding areas of investment was modified in 2014; for this reason, the reader should interpret the comparisons with caution. > Three areas in which companies are planning to invest in the next year stand out: marketing (57%), technology (49%) and operations optimization (47%). > Compared to last year, it seems that intentions to invest in human resources (HR) have decreased significantly (31% vs. 61% in 2013). > The proportion of respondents who plan to invest in research and development (R&D) is similar to that for HR. > Fewer than one in 10 respondents (6%) plans to invest in other areas not presented in the list. Are you planning to invest in some of the following areas in the next year? 2014 (n=581) 2013 (n=454) 2012 (n=307) Marketing Technology Operations optimization Choice not offered in 2012 13 57% 56% 54% 49% 51% 46% 47% > Differences between sub-groups: A larger proportion of respondents in the Atlantic provinces and the Prairies plan to invest in technology (65% and 59%, respectively). Companies in Ontario are more likely than those in other regions to invest in marketing (68%). A greater percentage of firms with total revenues below $500,000 have a marketing investment plan (68%). Compared to companies with fewer than five (37%), those with five or more are statistically more likely to invest in operations optimization (5 19: 56%; 20 49: 58%); 50 99: 68%). The proportion of firms intending to invest in operations optimization is also greater among those with total revenues over $5 million (70%+). Human resources Research and development (R&D) None of the above 6% 31% 30% Choice not offered in 2012 13 Choice not offered in 2012 13 61% 56% Base: Respondents who expect to invest in new projects within the next year. Those who answered "I prefer not to answer" were excluded. Multiple answers were allowed. Results presented in green and red indicate changes that are statistically significant when compared to the previous wave, conducted in 2013. Note: The question was changed between 2013 and 2014 and different possible answers were presented; therefore, the comparison shows trends only. 7 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

BDC Research and Market Intelligence Investing in marketing: Types of projects Most companies plan to invest in marketing. Entrepreneurs feel several areas are important. However, the median investment stands at $20,000, quite a bit lower than the planned amount in 2013. In what type(s) of marketing project(s) do you intend to invest? (n=318) > In terms of the types of marketing projects in which entrepreneurs intend to invest in the next year, respondents mentioned four types more often: creating or re-designing a website (55%); developing new markets (50%); launching new products or services (49%); and advertising (48%). > However, entrepreneurs do not foresee important investments in marketing. The proportion of respondents who said they will invest $100,000 or more is low (12%) but similar to the amount last year (10%). Moreover, the proportion of those planning to invest between $50,001 and $100,000 has decreased significantly (13% vs. 27% last year), which lowers the median investment amount to $20,000 (vs. $30,000 in 2013). Creating or re-designing a website Developing new markets Launching new products or services 55% 50% 49% > The types of financing that companies will use to pursue marketing projects are similar to those mentioned last year. Many respondents are planning to use cash flow (53%), working capital (37%) or a line of credit (34%). Advertising 48% > Differences between sub-groups: Companies with 20 to 49 are more likely to invest in developing new markets (73%) than are companies of other sizes. Unsurprisingly, smaller companies are more likely to invest smaller amounts (45% of firms with fewer than five will invest $10,000 or less, as will 47% of companies with total revenues under $500,000). In most cases, the median amounts allocated to future marketing projects increase with revenue size. Special marketing campaign Tradeshow Other 8% 42% 37% Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Multiple answers were allowed. 8 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Amounts planned and kinds of financing What amount do you expect to allocate to your investment in marketing in the next year? 2014 (n=286) 2013 (n=199) 2012 (n=127) $10,000 or less $10,001 to $25,000 $25,001 to $50,000 $50,001 to $100,000 Over $100,000 12% 10% 12% 15% 16% 17% 17% 15% 13% 17% 24% 34% 30% 40% 27% Median: $20,000 Median: $30,000 Median: $20,000 Base: Respondents who plan to invest in marketing within the next year. Those who answered "I prefer not to answer" were excluded. For kind of financing, multiple answers were allowed. The question on amount changed slightly in 2014 but the meaning did not, therefore allowing for comparison. Results presented in green and red indicate changes that are statistically significant when compared to the previous wave, conducted in 2013. What kind of financing will you turn to? 2014 (n=317) 2013 (n=232) 2012 (n=153) Cash flow 53% 50% 50% Working capital 37% 31% 32% Line of credit 34% 34% 33% Angel investors 13% 10% 7% Term loan 13% 17% 15% Company credit card 11% 10% 10% Government program 10% 20% Choice not offered in 2012 Equity from an institution 10% 14% 12% SR&ED credits 7% 11% Choice not offered in 2012 Love money 6% 7% 1% Quasi-equity 5% 3% 1% Mortgage 3% 3% 2% Lease financing 1% 6% 5% 9 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

BDC Research and Market Intelligence Investing in technology: Types of projects Investing in technology seems to be important to entrepreneurs. Respondents mentioned investments in software and hardware most often, with a median investment of $30,000, which has increased since last year. > Among the types of technology projects in which respondents intend to invest in the next year, software (59%) and hardware (53%) stand out. > At 21%, the proportion of other types of technology projects the respondents intend to invest in is particularly high. > Regarding the amount planned, the proportion of respondents who said they will invest $100,000 or over increased significantly (23% vs. 13% last year), which brings the median amount to $30,000 (vs. $12,919 in 2013). > The types of financing they are planning to use to finance their investment are quite similar to those they mentioned last year. Many (41%) are planning to use cash flow, 28% will use a line of credit and 27% will use working capital. In what type(s) of technology project(s) do you intend to invest? (n=284) Software Hardware 53% 59% > Differences between sub-groups: We did not observe significant differences regarding the types of projects. Again, smaller companies are more likely to invest smaller amounts (39% of companies with fewer than five will invest $10,000 or less, as will 44% of those with revenues under $500,000). A significantly larger percentage of Quebec respondents plan to use a term loan to pay for technology projects (46%). A greater proportion of companies with fewer than five plan to use angel investors (26%) as a funding source. Consulting services Other 21% 38% Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Multiple answers were allowed. 10 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Amounts planned and kinds of financing What amount do you expect to allocate to your investment in technology in the next year? 2014 (n=260) 2013 (n=194) 2012 (n=133) $10,000 or less $10,001 to $25,000 $25,001 to $50,000 $50,001 to $100,000 Over $100,000 4% 18% 19% 13% 12% 11% 9% 12% 13% 23% 23% 28% 28% 44% 44% Median: $30,000 Median: $12,919 Median: $17,500 What kind of financing will you turn to? 2014 (n=285) 2013 (n=226) 2012 (n=144) Cash flow 41% 46% 51% Line of credit 28% 30% 27% Working capital 27% 32% 28% Term loan 25% 18% 16% Lease financing 17% 11% 10% Angel investors 17% 9% 3% SR&ED credits 17% 11% Choice not offered in 2012 Government program 16% 19% Choice not offered in 2012 Equity from an institution 11% 8% 5% Company credit card 11% 11% 14% Love money 9% 4% 3% Quasi-equity 4% 2% 1% Mortgage 2% 2% 3% Base: Respondents who plan to invest in technology within the next year. Those who answered "I prefer not to answer" were excluded. For kind of financing, multiple answers were allowed. The question on amount changed slightly in 2014 but the meaning did not, therefore allowing for comparison. Results presented in green and red indicate changes that are statistically significant when compared to the previous wave, conducted in 2013. 11 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

BDC Research and Market Intelligence Investing in operations optimization: Types of projects About half of the entrepreneurs who plan to invest will invest in operations optimization projects. Improving what they do is clearly the focus and they will invest a median amount of $35,000 to do so. In what type(s) of operations optimization project(s) do you intend to invest? (n=298) > When it comes to operations optimization, one type of project clearly stands out: close to nine in 10 respondents (86%) said they are planning to invest in operational efficiency improvements. > Fewer than one in five respondents mentioned the other types of projects. Improving operational efficiency 86% > Regarding the amounts planned for such projects, responses are quite evenly distributed. While almost one-third of the respondents (30%) said they will invest $10,000 or less, close to one-quarter (23%) said they will invest over $100,000 in such projects. The median amount stands at $35,000. > Two types of financing stand out when it comes to funding operations optimization projects: cash flow (47%) and working capital (39%). Obtaining a certification 18% > Differences between sub-groups: We did not observe significant differences regarding the types of projects. A larger proportion of respondents in B.C. and small companies (fewer than five and revenues below $500,000) plan to invest $10,000 or less in operations optimization (respectively, 51%, 46% and 43%). Nearly one-third of companies with 20 to 49 (32%) plan to invest between $100,000 and $250,000 in operations optimization. Compared to respondents from Quebec (15%), a significantly greater proportion of respondents in the Prairies, Ontario and B.C. plan to use the company s cash flow to finance such projects (respectively, 50%, 54% and 66%). A statistically greater percentage of businesses with 20 to 49 (39%) plan to use a term loan. Securing a new supply source Other 16% 13% Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. Multiple answers were allowed. 12 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Amounts planned and kinds of financing What amount do you expect to allocate to your investment in operations optimization in the next year? (n=268) What kind of financing will you turn to? (n=295) Cash flow 47% $10,000 or less 30% Working capital 39% Line of credit 28% $10,001 to $25,000 18% Term loan 23% Lease financing 11% Government program 10% $25,001 to $50,000 14% Company credit card 8% $50,001 to $100,000 15% Median: $35,000 Mortgage Equity from an institution 7% 6% Love money 5% Angel investors 4% Over $100,000 23% Quasi-equity 3% SR&ED credits 2% Base: Respondents who plan to invest in operations optimization within the next year. Those who answered "I prefer not to answer" were excluded. For kind of financing, multiple answers were allowed. The question on amount changed slightly in 2014 but the meaning did not, therefore allowing for comparison. 13 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

BDC Research and Market Intelligence Investing in human resources: Types of projects About one-third of respondents with investment intentions expect to invest in human resources (HR) in the next year, a proportion that has decreased significantly. That said, hiring new skilled is a priority and amounts planned have increased since 2013. > Among the respondents who indicated they intend to invest in HR within the next year, hiring new skilled was the most frequently planned type of investment (79%). > To a lesser extent, respondents also plan to invest in training (55%) and hiring sales personnel (37%). > Regarding the amounts planned, the median amount stands at $40,000, a number that has increased significantly since last year ($30,000). However, an important proportion of respondents (41%) plan to invest less than $25,000 in HR projects within the next year, which is similar to last year. > Again, three kinds of financing for HR projects stand out: cash flow (59%), working capital (40%) and line of credit (18%). Interestingly, the proportion of entrepreneurs who intend to use government program funds to finance HR projects has decreased significantly since 2013 (18% vs. 27%). > Differences between sub-groups: A statistically greater percentage of companies with 20 to 49 plan to invest in employee retention (63%). We did not observe significant differences regarding the amounts invested. A significantly larger proportion of respondents in the Prairies plan to use the company s cash flow to finance HR projects (78%). In what type(s) of HR project(s) do you intend to invest? (n=176) Hiring new skilled 79% Training 55% Hiring sales personnel 37% Retaining 28% Succession planning 15% Other 3% Base: Respondents who expect to invest in new HR projects within the next year. Those who answered "I prefer not to answer" were excluded. Multiple answers were allowed. 14 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Amounts planned and kinds of financing What amount do you expect to allocate to your investment in HR in the next year? 2014 (n=157) 2013 (n=230) 2012 (n=141) $10,000 or less $10,001 to $25,000 $25,001 to $50,000 $50,001 to $100,000 Over $100,000 12% 18% 14% 22% 17% 23% 19% 17% 15% 18% 21% 23% 29% 27% 25% Median: $40,000 Median: $30,000 Median: $40,138 What kind of financing will you turn to? 2014 (n=175) 2013 (n=268) 2012 (n=176) Cash flow 59% 55% 53% Working capital 40% 42% 37% Line of credit 18% 25% 21% Government program 18% 27% Choice not offered in 2012 Equity from an institution 10% 10% 7% Term loan 10% 8% 4% Angel investors 8% 8% 6% SR&ED credits 7% 11% Choice not offered in 2012 Quasi-equity 3% 3% 2% Lease financing 2% 1% 0% Company credit card 2% 6% 3% Mortgage 1% 1% 0% Love money 1% 5% 2% Base: Respondents who plan to invest in HR within the next year. Those who answered "I prefer not to answer" were excluded. For kind of financing, multiple answers were allowed. The question on amount changed slightly in 2014 but the meaning did not, therefore allowing for comparison. Results presented in green and red indicate changes that are statistically significant when compared to the previous wave, conducted in 2013. 15 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

BDC Research and Market Intelligence Investing in research and development: Types of projects Approximately one-third of SMEs intending to invest are planning to invest in research and development (R&D) projects, mainly to develop or launch a new product or service. Amounts involved are relatively high, with a median investment of $70,000. > Innovation seems to be important to entrepreneurs, with three-quarters of those who will invest in R&D indicating they will do so to develop a new product or service (76%), and over half to launch new ones (56%). > The amounts involved in R&D are higher than what we have observed in the other areas of investment so far. Over one-third of the respondents (36%) said they will invest over $100,000 in such projects, bringing the median investment amount to $70,000. More specifically, 17% are planning to invest between $100,001 and $250,000; 9% between $250,001 and $500,000; and 11% over $500,000. In what type(s) of R&D project(s) do you intend to invest? (n=186) Developing a new product or service Launching a new product or service Creating sample products and prototypes 44% 76% 56% > Mainly, they will use three kinds of financing: cash flow (46%), SR&ED credits (41%) and working capital (38%). Government program financing also scores relatively high, with 30% of respondents mentioning it. Developing a new market 42% > Differences between sub-groups: We did not observe significant differences regarding the types of investment. While 9% of all respondents plan to invest between $250,000 and $500,000 in R&D projects, the proportion of companies with 20 to 49 that plan to do so is significantly higher (18%). Licences, patents and trademarks 29% Other 4% Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Multiple answers were allowed. 16 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development: Amounts planned and kinds of financing What amount do you expect to allocate to your investment in R&D in the next year? (n=164) What kind of financing will you turn to? (n=183) Cash flow 46% $10,000 or less 15% SR&ED credits 41% Working capital 38% $10,001 to $25,000 14% Government program 30% Line of credit 25% Equity from an institution 17% $25,001 to $50,000 18% Angel investors 17% $50,001 to $100,000 18% Median: $70,000 Term loan Love money 12% 10% Company credit card 6% Quasi-equity 3% Over $100,000 36% Mortgage 1% Lease financing 1% Base: Respondents who plan to invest in R&D within the next year. Those who answered "I prefer not to answer" were excluded. For kind of financing, multiple answers were allowed. The question on amount changed slightly in 2014 but the meaning did not, therefore allowing for comparison. 17 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Respondent profile 18 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Professional, scientific and technical services Manufacturing Retail fewer than 20 Other services (except public administration) Construction Wholesale trade Arts, entertainment and recreation Finance and insurance Management of companies and enterprises Real estate and rental and leasing Information and cultural industries Transportation and warehousing Retail 20 or more Accommodation and food services Health care and social assistance Agriculture, forestry, fishing and hunting Educational services Other (unspecified) BDC Research and Market Intelligence Respondent profile n=732 55% 32% 16% 21% 35% 21% 7% 8% 3% 2% Fewer than 5 5 to 19 20 to 49 50 to 99 100 or more Region Number of 21% 16% Please note that results were not weighted by sector of activity. This is why some sectors may be over- or under-represented, compared with Canadian SMEs overall. 12% 9% 6% 5% 5% 3% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2% Sector of activity Base: All respondents. Please note that results were weighted by region and company size. Sub-groups of 1% or less are not presented. 19 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Respondent profile (cont d) n=732 20% or more 17% $20 million or more 2% 15% to 19.9% 9% $10 million to $19,999,999 2% 10% to 14.9% 11% $5 million to $9,999,999 7% 5% to 9.9% 19% $2 million to $4,999,999 14% 0% to 4.9% 24% $500,000 to $1,999,999 28% Negative 11% Less than $500,000 40% I prefer not to answer 8% I prefer not to answer 7% Average annual growth (last three years) Revenue for last financial year Base: All respondents. Please note that results were weighted by region and company size. 20 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Appendix 21 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in new projects Does your company expect to invest in new projects within the next 12 months? (n=732) Atlantic Canada (n=58) Quebec (n=190) Ontario (n=248) Prairies (n=124) BC and Territories (n=112) YES 78% 73% 76% 81% 77% 79% Yes, definitely 48% 34% 40% 55% 48% 50% Yes, probably 30% 39% 36% 26% 29% 29% NO 19% 27% 22% 16% 19% 20% No, probably not 15% 22% 16% 11% 17% 14% No, definitely not 5% 5% 6% 5% 2% 6% I don t know 2% 0% 2% 3% 4% 1% (n=732) Fewer than 5 (n=252) 5 to 19 (n=277) 20 to 49 (n=128) 50 to 99 (n=39) 100 or more (n=36) YES 78% 78% 76% 85% 89% 82% Yes, definitely 48% 47% 50% 47% 50% 64% Yes, probably 30% 32% 26% 39% 40% 18% NO 19% 19% 22% 13% 11% 15% No, probably not 15% 14% 18% 10% 11% 9% No, definitely not 5% 5% 5% 3% 0% 6% I don t know 2% 3% 2% 2% 0% 3% Base: All respondents. may not equal 100% due to rounding. Numbers in red and green highlight statistically significant differences between sub-groups. 22 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in new projects (cont d) Does your company expect to invest in new projects within the next 12 months? (n=732) Less than $500K (n=206) $500K - <$2M (n=205) $2M - <$5M (n=136) $5M - <$10M (n=77) $10M - <$20M (n=32) $20M + (n=35) Prefer not to answer (n=41) YES 78% 74% 77% 78% 89% 81% 88% 94% Yes, definitely 48% 47% 50% 46% 54% 51% 69% 43% Yes, probably 30% 28% 27% 32% 35% 31% 19% 51% NO 19% 23% 22% 17% 11% 16% 12% 6% No, probably not 15% 17% 17% 15% 10% 16% 8% 0% No, definitely not 5% 6% 5% 3% 1% 0% 5% 6% I don t know 2% 3% 2% 5% 0% 3% 0% 0% Base: All respondents. may not equal 100% due to rounding. Numbers in red and green highlight statistically significant differences between sub-groups. 23 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Areas of investment Are you planning to invest in some of the following areas in the next year? (n=581) Atlantic Canada (n=44) Quebec (n=151) Ontario (n=203) Prairies (n=95) BC and Territories (n=88) Marketing 57% 60% 46% 68% 54% 50% Technology 49% 65% 37% 50% 59% 42% Operations optimization 47% 36% 45% 47% 47% 53% Human resources 31% 24% 24% 32% 43% 23% Research and Development (R&D) 30% 23% 35% 28% 23% 37% I don t know 0% 0% 0% 0% 0% 0% None of the above 6% 4% 10% 2% 7% 10% (n=581) Fewer than 5 (n=196) 5 to 19 (n=211) 20 to 49 (n=109) 50 to 99 (n=35) 100 or more (n=30) Marketing 57% 62% 53% 51% 55% 39% Technology 49% 44% 59% 44% 46% 53% Operations optimization 47% 37% 56% 58% 68% 78% Human resources 31% 29% 34% 33% 25% 28% Research and Development (R&D) 30% 26% 33% 33% 32% 56% I don t know 0% 0% 1% 0% 0% 0% None of the above 6% 8% 3% 5% 4% 3% Base: Respondents who expect to invest in new projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 24 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Areas of investment (cont d) Are you planning to invest in some of the following areas in the next year? (n=581) Less than $500K (n=153) $500K - <$2M (n=155) $2M - <$5M (n=108) $5M - <$10M (n=70) $10M - <$20M (n=26*) $20M + (n=30) Prefer not to answer (n=39) Marketing 57% 68% 59% 41% 59% 41% 39% 38% Technology 49% 43% 54% 49% 36% 54% 50% 65% Operations optimization 47% 35% 53% 53% 70% 70% 72% 35% Human resources 31% 29% 31% 32% 29% 34% 29% 34% Research and Development (R&D) 30% 29% 32% 30% 26% 35% 33% 28% I don t know 0% 0% 0% 0% 0% 0% 0% 0% None of the above 6% 6% 3% 11% 4% 0% 7% 9% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 25 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

amount planned for marketing, technology, HR, operations optimization and R&D projects What amount do you expect to allocate to your investment in the next year? BASE: ALL RESPONDENTS WHO ARE PLANNING TO INVEST WITHIN THE NEXT YEAR (n=502) Atlantic Canada (n=37) Quebec (n=127) Ontario (n=186) Prairies (n=80) BC and Territories (n=72) $25K or less 23% 28% 20% 23% 24% 27% $25,001 to $50K 15% 9% 13% 13% 18% 20% $50,001 to $100K 19% 13% 22% 19% 15% 24% $100,001 to $250K 21% 36% 20% 21% 20% 16% $250,001 to $500K 8% 7% 10% 7% 10% 7% Over $500K 13% 6% 15% 17% 13% 6% Median $82,000 $75,000 $90,000 $85,000 $90,000 $55,000 BASE: ALL RESPONDENTS WHO ARE PLANNING TO INVEST WITHIN THE NEXT YEAR (n=502) Fewer than 5 (n=158) 5 to 19 (n=189) 20 to 49 (n=96) 50 to 99 (n=33) 100 or more (n=26*) $25K or less 23% 34% 16% 3% 6% 4% $25,001 to $50K 15% 17% 15% 9% 13% 0% $50,001 to $100K 19% 21% 18% 17% 18% 4% $100,001 to $250K 21% 18% 27% 24% 11% 5% $250,001 to $500K 8% 4% 10% 23% 16% 19% Over $500K 13% 7% 14% 24% 36% 69% Median $82,000 $50,000 $102,000 $190,000 $300,000 $1,300,000 Base: Respondents who expect to invest in at least one project within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 26 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

amount planned for marketing, technology, HR, operations optimization and R&D projects (cont d) What amount do you expect to allocate to your investment in the next year? BASE: ALL RESPONDENTS WHO ARE PLANNING TO INVEST WITHIN THE NEXT YEAR (n=502) Less than $500K (n=124) $500K - <$2M (n=142) $2M - <$5M (n=96) $5M - <$10M (n=62) $10M - <$20M (n=24*) $20M + (n=28*) Prefer not to answer (n=26*) $25K or less 23% 36% 19% 8% 8% 4% 6% 41% $25,001 to $50K 15% 16% 17% 17% 8% 9% 0% 10% $50,001 to $100K 19% 16% 24% 21% 17% 12% 3% 20% $100,001 to $250K 21% 18% 21% 31% 24% 10% 10% 19% $250,001 to $500K 8% 4% 9% 12% 15% 31% 24% 0% Over $500K 13% 10% 9% 12% 29% 34% 57% 10% Median $82,000 $45,000 $80,000 $120,000 $165,000 $325,000 $900,000 $50,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in at least one project within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 27 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Types of project In what type(s) of marketing project(s) do you intend to invest? Multiple answers allowed. (n=318) Atlantic Canada (n=26*) Quebec (n=66) Ontario (n=135) Prairies (n=49) BC and Territories (n=42) Creating or re-designing a website 55% 30% 56% 58% 51% 64% Developing new markets 50% 43% 52% 49% 52% 53% Launching new products or services 49% 52% 49% 49% 46% 53% Advertising 48% 58% 30% 48% 55% 54% Special marketing campaign 42% 43% 41% 47% 35% 35% Tradeshow 37% 37% 22% 44% 36% 35% Other 8% 5% 1% 9% 10% 16% I don t know 0% 2% 1% 0% 0% 0% Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 28 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Types of project (cont d) In what type(s) of marketing project(s) do you intend to invest? Multiple answers allowed. (n=318) Fewer than 5 (n=121) 5 to 19 (n=111) 20 to 49 (n=55) 50 to 99 (n=19*) 100 or more (n=12*) Creating or re-designing a website 55% 53% 60% 55% 51% 57% Developing new markets 50% 45% 54% 73% 46% 59% Launching new products or services 49% 50% 48% 37% 64% 52% Advertising 48% 45% 52% 52% 58% 43% Special marketing campaign 42% 44% 37% 40% 41% 59% Tradeshow 37% 35% 36% 48% 41% 60% Other 8% 9% 8% 9% 5% 8% I don t know 0% 0% 0% 3% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 29 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Types of project (cont d) In what type(s) of marketing project(s) do you intend to invest? Multiple answers allowed. (n=318) Less than $500K (n=102) $500K - <$2M (n=91) $2M - <$5M (n=48) $5M - <$10M (n=42) $10M - <$20M (n=11*) $20M + (n=11*) Prefer not to answer (n=13*) Creating or re-designing a website 55% 54% 55% 62% 55% 52% 27% 65% Developing new markets 50% 45% 55% 58% 51% 50% 53% 49% Launching new products or services 49% 55% 46% 48% 46% 39% 53% 22% Advertising 48% 49% 44% 60% 53% 41% 28% 35% Special marketing campaign 42% 46% 33% 41% 34% 30% 69% 60% Tradeshow 37% 36% 36% 40% 40% 48% 34% 36% Other 8% 8% 12% 5% 14% 0% 6% 0% I don t know 0% 0% 1% 0% 0% 0% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 30 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Amounts planned What amount do you expect to allocate to your investment in marketing in the next year? (n=286) Atlantic Canada (n=24*) Quebec (n=62) Ontario (n=120) Prairies (n=44) BC and Territories (n=36) $10K or less 34% 48% 34% 30% 40% 31% $10,001 to $25K 24% 26% 22% 24% 15% 39% $25,001 to $50K 17% 12% 12% 19% 23% 14% $50,001 to $100K 13% 6% 20% 12% 13% 8% Over $100K 12% 8% 12% 14% 8% 8% Median $20,000 $10,000 $20,000 $20,000 $15,000 $20,000 (n=286) Fewer than 5 (n=102) 5 to 19 (n=106) 20 to 49 (n=50) 50 to 99 (n=18*) 100 or more (n=10*) $10K or less 34% 45% 25% 10% 11% 9% $10,001 to $25K 24% 26% 24% 18% 17% 0% $25,001 to $50K 17% 11% 26% 24% 21% 20% $50,001 to $100K 13% 9% 15% 27% 22% 22% Over $100K 12% 10% 10% 22% 29% 49% Median $20,000 $15,000 $25,000 $50,000 $50,000 $100,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 31 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Amounts planned (cont d) What amount do you expect to allocate to your investment in marketing in the next year? (n=286) Less than $500K (n=88) $500K - <$2M (n=85) $2M - <$5M (n=46) $5M - <$10M (n=39) $10M - <$20M (n=9*) $20M + (n=11*) Prefer not to answer (n=8*) $10K or less 34% 47% 29% 20% 11% 37% 0% 30% $10,001 to $25K 24% 26% 29% 13% 26% 10% 0% 13% $25,001 to $50K 17% 8% 21% 41% 18% 10% 14% 30% $50,001 to $100K 13% 6% 17% 14% 29% 0% 33% 14% Over $100K 12% 13% 4% 12% 17% 43% 53% 13% Median $20,000 $12,000 $24,000 $45,000 $50,000 $25,000 $100,000 $20,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 32 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Kinds of financing What kind of financing will you turn to? Multiple answers allowed. (n=317) Atlantic Canada (n=26*) Quebec (n=65) Ontario (n=135) Prairies (n=49) BC and Territories (n=42) Cash flow 53% 58% 44% 49% 62% 63% Working capital 37% 32% 51% 38% 35% 24% Line of credit 34% 42% 30% 35% 26% 38% Angel investors 13% 0% 13% 14% 13% 17% Term loan 13% 22% 20% 10% 7% 15% Company credit card 11% 13% 4% 16% 6% 10% Government program 10% 5% 12% 9% 16% 6% Equity from an institution (e.g. a venture capital company) Scientific Research and Experimental Development (SR&ED) credits 10% 6% 4% 13% 5% 14% 7% 0% 6% 6% 15% 7% Money from friends and family (love money) 6% 4% 2% 8% 8% 2% Quasi-equity (e.g. debentures) 5% 0% 7% 7% 3% 3% Mortgage 3% 4% 3% 3% 1% 7% Lease financing 1% 0% 2% 2% 2% 0% Other 3% 0% 3% 5% 0% 4% I don t know 5% 0% 7% 6% 3% 3% Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 33 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=317) Fewer than 5 (n=120) 5 to 19 (n=111) 20 to 49 (n=55) 50 to 99 (n=19*) 100 or more (n=12*) Cash flow 53% 48% 63% 54% 69% 27% Working capital 37% 36% 38% 45% 38% 59% Line of credit 34% 35% 32% 30% 30% 41% Angel investors 13% 18% 8% 0% 0% 0% Term loan 13% 10% 16% 18% 10% 32% Company credit card 11% 14% 10% 2% 0% 0% Government program 10% 9% 14% 12% 0% 8% Equity from an institution (e.g. a venture capital company) Scientific Research and Experimental Development (SR&ED) credits 10% 12% 8% 5% 0% 0% 7% 8% 10% 0% 0% 0% Money from friends and family (love money) 6% 8% 4% 0% 0% 0% Quasi-equity (e.g. debentures) 5% 8% 2% 4% 0% 0% Mortgage 3% 4% 3% 2% 0% 0% Lease financing 1% 1% 3% 0% 0% 0% Other 3% 2% 6% 2% 0% 8% I don t know 5% 6% 5% 2% 0% 0% Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 34 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in marketing: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=317) Less than $500K (n=102) $500K - <$2M (n=90) $2M - <$5M (n=48) $5M - <$10M (n=42) $10M - <$20M (n=11*) $20M + (n=11*) Prefer not to answer (n=13*) Cash flow 53% 50% 60% 61% 63% 76% 16% 20% Working capital 37% 36% 43% 42% 32% 22% 45% 20% Line of credit 34% 36% 36% 33% 23% 33% 25% 19% Angel investors 13% 22% 4% 0% 0% 0% 0% 36% Term loan 13% 12% 14% 15% 9% 7% 12% 15% Company credit card 11% 18% 7% 6% 0% 0% 0% 9% Government program 10% 12% 10% 12% 4% 0% 6% 11% Equity from an institution (e.g. a venture capital company) 10% 12% 5% 1% 4% 0% 0% 36% SR&ED credits 7% 11% 6% 5% 0% 0% 0% 8% Money from friends and family (love money) 6% 10% 1% 0% 0% 0% 0% 19% Quasi-equity (e.g. debentures) 5% 8% 1% 0% 4% 0% 28% 11% Mortgage 3% 3% 4% 7% 0% 0% 0% 0% Lease financing 1% 2% 2% 0% 0% 0% 0% 0% Other 3% 3% 3% 5% 2% 0% 6% 0% I don t know 5% 4% 6% 3% 2% 0% 0% 17% Base: Respondents who expect to invest in new marketing projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 35 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Types of project In what type(s) of technology project(s) do you intend to invest? Multiple answers allowed. (n=284) Atlantic Canada (n=28*) Quebec (n=63) Ontario (n=102) Prairies (n=54) BC and Territories (n=37) Software 59% 57% 49% 55% 71% 59% Hardware 53% 43% 56% 51% 55% 56% Consulting services 38% 31% 29% 32% 55% 35% Other 21% 22% 25% 24% 17% 14% I don t know 2% 3% 3% 2% 0% 4% (n=284) Fewer than 5 (n=83) 5 to 19 (n=122) 20 to 49 (n=47) 50 to 99 (n=16*) 100 or more (n=16*) Software 59% 58% 61% 51% 45% 77% Hardware 53% 47% 59% 52% 57% 61% Consulting services 38% 41% 33% 38% 45% 23% Other 21% 19% 20% 29% 30% 17% I don t know 2% 2% 2% 2% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 36 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Types of project (cont d) In what type(s) of technology project(s) do you intend to invest? Multiple answers allowed. (n=284) Less than $500K (n=63) $500K - <$2M (n=86) $2M - <$5M (n=55) $5M - <$10M (n=25*) $10M - <$20M (n=15*) $20M + (n=14*) Prefer not to answer (n=26*) Software 59% 60% 59% 61% 63% 39% 61% 55% Hardware 53% 59% 47% 43% 73% 63% 63% 47% Consulting services 38% 44% 36% 41% 22% 30% 31% 30% Other 21% 15% 20% 28% 20% 32% 15% 26% I don t know 2% 0% 3% 0% 3% 0% 0% 10% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 37 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Amounts planned What amount do you expect to allocate to your investment in technology in the next year? (n=260) Atlantic Canada (n=25*) Quebec (n=57) Ontario (n=97) Prairies (n=48) BC and Territories (n=33) $10K or less 28% 17% 11% 29% 37% 37% $10,001 to $25K 18% 24% 18% 19% 15% 17% $25,001 to $50K 23% 23% 25% 21% 20% 30% $50,001 to $100K 9% 7% 18% 9% 4% 9% Over $100K 23% 29% 29% 23% 25% 8% Median $30,000 $35,000 $50,000 $30,000 $25,000 $20,000 (n=260) Fewer than 5 (n=74) 5 to 19 (n=112) 20 to 49 (n=46) 50 to 99 (n=15*) 100 or more (n=13*) $10K or less 28% 39% 21% 8% 13% 0% $10,001 to $25K 18% 14% 22% 25% 8% 7% $25,001 to $50K 23% 26% 21% 18% 14% 17% $50,001 to $100K 9% 6% 12% 9% 12% 10% Over $100K 23% 14% 25% 40% 52% 67% Median $30,000 $20,000 $40,000 $50,000 $100,000 $400,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 38 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Amounts planned (cont d) What amount do you expect to allocate to your investment in technology in the next year? (n=260) Less than $500K (n=59) $500K - <$2M (n=80) $2M - <$5M (n=53) $5M - <$10M (n=23*) $10M - <$20M (n=13*) $20M + (n=15*) Prefer not to answer (n=17*) $10K or less 28% 44% 27% 10% 7% 8% 13% 26% $10,001 to $25K 18% 13% 18% 31% 25% 10% 5% 13% $25,001 to $50K 23% 17% 31% 19% 18% 22% 6% 26% $50,001 to $100K 9% 5% 12% 15% 3% 15% 6% 7% Over $100K 23% 21% 12% 26% 47% 46% 70% 27% Median $30,000 $15,000 $30,000 $40,000 $50,000 $75,000 $400,000 $30,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 39 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Kinds of financing What kind of financing will you turn to? Multiple answers allowed. (n=285) Atlantic Canada (n=28*) Quebec (n=63) Ontario (n=103) Prairies (n=55) BC and Territories (n=36) Cash flow 41% 36% 29% 42% 45% 52% Line of credit 28% 26% 26% 31% 27% 23% Working capital 27% 30% 22% 26% 31% 26% Term loan 25% 44% 46% 16% 15% 33% Lease financing 17% 29% 14% 19% 14% 13% Angel investors 17% 15% 15% 19% 14% 18% Scientific Research and Experimental Development (SR&ED) credits 17% 10% 26% 15% 14% 19% Government program 16% 26% 14% 15% 13% 23% Equity from an institution (e.g. a venture capital company) 11% 3% 16% 14% 4% 16% Company credit card 11% 8% 2% 14% 6% 22% Money from friends and family (love money) 9% 3% 3% 10% 9% 13% Quasi-equity (e.g. debentures) 4% 3% 3% 8% 2% 0% Mortgage 2% 3% 3% 3% 1% 2% Other 2% 6% 2% 2% 2% 0% I don t know 5% 5% 3% 6% 6% 3% Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 40 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=285) Fewer than 5 (n=84) 5 to 19 (n=122) 20 to 49 (n=47) 50 to 99 (n=16*) 100 or more (n=16*) Cash flow 41% 45% 37% 43% 37% 43% Line of credit 28% 31% 22% 37% 27% 32% Working capital 27% 23% 27% 37% 33% 76% Term loan 25% 18% 32% 32% 30% 41% Lease financing 17% 12% 22% 22% 29% 18% Angel investors 17% 26% 8% 7% 6% 0% Scientific Research and Experimental Development (SR&ED) credits 17% 14% 18% 19% 18% 35% Government program 16% 20% 13% 13% 6% 23% Equity from an institution (e.g. a venture capital company) 11% 12% 10% 13% 6% 6% Company credit card 11% 14% 8% 7% 8% 0% Money from friends and family (love money) 9% 14% 4% 2% 0% 0% Quasi-equity (e.g. debentures) 4% 6% 3% 5% 0% 12% Mortgage 2% 1% 3% 2% 8% 6% Other 2% 0% 5% 4% 0% 0% I don t know 5% 4% 7% 6% 6% 0% Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 41 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in technology: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=285) Less than $500K (n=65) $500K - <$2M (n=86) $2M - <$5M (n=55) $5M - <$10M (n=25*) $10M - <$20M (n=15*) $20M + (n=14*) Prefer not to answer (n=25*) Cash flow 41% 43% 41% 49% 50% 30% 34% 26% Line of credit 28% 32% 28% 31% 13% 27% 31% 16% Working capital 27% 20% 25% 44% 33% 23% 59% 25% Term loan 25% 15% 32% 34% 30% 48% 25% 17% Lease financing 17% 15% 16% 26% 31% 24% 10% 8% Angel investors 17% 26% 7% 5% 0% 0% 24% 39% SR&ED credits 17% 21% 11% 21% 9% 12% 20% 15% Government program 16% 19% 7% 17% 3% 12% 34% 36% Equity from an institution (e.g. a venture capital company) 11% 12% 5% 8% 3% 6% 29% 33% Company credit card 11% 22% 7% 5% 0% 0% 0% 5% Money from friends and family (love money) 9% 14% 2% 1% 0% 0% 0% 27% Quasi-equity (e.g. debentures) 4% 8% 1% 6% 3% 0% 10% 0% Mortgage 2% 2% 3% 2% 3% 0% 14% 0% Other 2% 1% 2% 5% 3% 0% 0% 5% I don t know 5% 5% 5% 7% 0% 7% 0% 5% Base: Respondents who expect to invest in new technology projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 42 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Types of project In what type(s) of operations optimization project(s) do you intend to invest? Multiple answers allowed. (n=298) Atlantic Canada (n=20*) Quebec (n=75) Ontario (n=101) Prairies (n=54) BC and Territories (n=48) Improving operational efficiency 86% 72% 91% 90% 82% 82% Obtaining a certification 18% 18% 10% 19% 23% 18% Securing a new supply source 16% 6% 17% 20% 12% 15% Other 13% 22% 8% 10% 14% 19% (n=298) Fewer than 5 (n=72) 5 to 19 (n=118) 20 to 49 (n=62) 50 to 99 (n=24*) 100 or more (n=22*) Improving operational efficiency 86% 83% 88% 85% 92% 100% Obtaining a certification 18% 21% 16% 12% 9% 26% Securing a new supply source 16% 22% 11% 10% 13% 27% Other 13% 11% 14% 17% 8% 12% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 43 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Types of project (cont d) In what type(s) of operations optimization project(s) do you intend to invest? Multiple answers allowed. (n=298) Less than $500K (n=56) $500K - <$2M (n=81) $2M - <$5M (n=58) $5M - <$10M (n=49) $10M - <$20M (n=17*) $20M + (n=22*) Prefer not to answer (n=15*) Improving operational efficiency 86% 81% 90% 97% 78% 78% 100% 75% Obtaining a certification 18% 22% 15% 22% 9% 7% 22% 21% Securing a new supply source 16% 20% 12% 15% 11% 7% 26% 32% Other 13% 16% 7% 9% 19% 22% 10% 19% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 44 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Amounts planned What amount do you expect to allocate to your investment in operations optimization in the next year? (n=268) Atlantic Canada (n=19*) Quebec (n=65) Ontario (n=97) Prairies (n=48) BC and Territories (n=39) $10K or less 30% 18% 18% 27% 33% 51% $10,001 to $25K 18% 22% 12% 23% 14% 15% $25,001 to $50K 14% 28% 15% 17% 9% 9% $50,001 to $100K 15% 6% 21% 13% 19% 13% Over $100K 23% 26% 35% 20% 24% 12% Median $35,000 $25,000 $75,000 $25,000 $30,000 $10,000 (n=268) Fewer than 5 (n=64) 5 to 19 (n=105) 20 to 49 (n=56) 50 to 99 (n=21*) 100 or more (n=22*) $10K or less 30% 46% 25% 5% 4% 0% $10,001 to $25K 18% 16% 22% 12% 22% 0% $25,001 to $50K 14% 8% 20% 26% 9% 4% $50,001 to $100K 15% 14% 18% 9% 25% 10% Over $100K 23% 16% 15% 48% 39% 86% Median $35,000 $13,000 $35,000 $100,000 $85,000 $400,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 45 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Amounts planned (cont d) What amount do you expect to allocate to your investment in operations optimization in the next year? (n=268) Less than $500K (n=49) $500K - <$2M (n=72) $2M - <$5M (n=55) $5M - <$10M (n=45) $10M - <$20M (n=15*) $20M + (n=22*) Prefer not to answer (n=10*) $10K or less 30% 43% 34% 17% 6% 10% 0% 61% $10,001 to $25K 18% 24% 15% 28% 13% 0% 0% 7% $25,001 to $50K 14% 8% 16% 22% 20% 13% 0% 13% $50,001 to $100K 15% 13% 21% 10% 18% 0% 17% 13% Over $100K 23% 11% 14% 24% 43% 77% 83% 7% Median $35,000 $13,000 $30,000 $45,000 $60,000 $200,000 $400,000 $10,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 46 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Kinds of financing What kind of financing will you turn to? Multiple answers allowed. (n=295) Atlantic Canada (n=20*) Quebec (n=75) Ontario (n=102) Prairies (n=53) BC and Territories (n=45) Cash flow 47% 50% 15% 54% 50% 66% Working capital 39% 30% 39% 37% 41% 44% Line of credit 28% 18% 27% 29% 29% 30% Term loan 23% 15% 40% 22% 15% 16% Lease financing 11% 3% 16% 9% 12% 12% Government program 10% 15% 21% 7% 6% 8% Company credit card 8% 9% 9% 11% 5% 5% Mortgage 7% 17% 6% 6% 7% 7% Equity from an institution (e.g. a venture capital company) 6% 0% 16% 5% 0% 7% Money from friends and family (love money) 5% 0% 2% 7% 2% 10% Angel investors 4% 0% 7% 3% 4% 4% Quasi-equity (e.g. debentures) 3% 6% 6% 4% 0% 0% Scientific Research and Experimental Development (SR&ED) credits 2% 0% 2% 2% 1% 2% Other 1% 0% 0% 0% 2% 3% I don t know 4% 9% 2% 4% 7% 1% Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 47 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=295) Fewer than 5 (n=70) 5 to 19 (n=117) 20 to 49 (n=62) 50 to 99 (n=24*) 100 or more (n=22*) Cash flow 47% 46% 51% 45% 42% 31% Working capital 39% 40% 34% 50% 29% 51% Line of credit 28% 33% 24% 24% 21% 42% Term loan 23% 17% 25% 39% 20% 32% Lease financing 11% 7% 14% 15% 12% 17% Government program 10% 11% 8% 18% 0% 12% Company credit card 8% 11% 7% 4% 0% 6% Mortgage 7% 7% 7% 9% 9% 6% Equity from an institution (e.g. a venture capital company) 6% 10% 5% 3% 0% 0% Money from friends and family (love money) 5% 8% 3% 3% 0% 0% Angel investors 4% 7% 2% 0% 0% 0% Quasi-equity (e.g. debentures) 3% 4% 2% 5% 0% 0% Scientific Research and Experimental Development (SR&ED) credits 2% 1% 2% 2% 0% 4% Other 1% 0% 2% 0% 0% 4% I don t know 4% 3% 6% 3% 4% 0% Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 48 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in operations optimization: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=295) Less than $500K (n=56) $500K - <$2M (n=81) $2M - <$5M (n=58) $5M - <$10M (n=49) $10M - <$20M (n=17*) $20M + (n=22*) Prefer not to answer (n=12*) Cash flow 47% 44% 49% 60% 44% 37% 45% 23% Working capital 39% 43% 33% 42% 39% 10% 59% 47% Line of credit 28% 38% 26% 30% 17% 7% 55% 0% Term loan 23% 16% 24% 30% 28% 32% 16% 14% Lease financing 11% 12% 6% 19% 10% 29% 7% 7% Government program 10% 14% 7% 10% 5% 5% 10% 26% Company credit card 8% 15% 5% 5% 0% 0% 5% 26% Mortgage 7% 8% 6% 6% 12% 7% 11% 0% Equity from an institution (e.g. a venture capital company) Money from friends and family (love money) 6% 13% 5% 1% 0% 0% 0% 20% 5% 7% 2% 2% 0% 0% 0% 39% Angel investors 4% 13% 0% 0% 0% 0% 0% 0% Quasi-equity (e.g. debentures) 3% 5% 2% 4% 2% 0% 0% 0% SR&ED credits 2% 4% 0% 1% 0% 0% 3% 0% Other 1% 1% 0% 0% 0% 12% 4% 0% I don t know 4% 5% 5% 4% 2% 5% 0% 0% Base: Respondents who expect to invest in new operations optimization projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 49 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Types of project In what type(s) of human resources project(s) do you intend to invest? Multiple answers allowed. (n=176) Atlantic Canada (n=10*) Quebec (n=37) Ontario (n=67) Prairies (n=39) BC and Territories (n=23*) Hiring new skilled 79% 71% 84% 77% 78% 89% Training 55% 76% 47% 52% 66% 36% Hiring sales personnel 37% 49% 41% 43% 34% 15% Retaining 28% 43% 25% 29% 27% 22% Succession planning 15% 13% 17% 10% 22% 14% Other 3% 0% 3% 5% 4% 0% (n=176) Fewer than 5 (n=53) 5 to 19 (n=71) 20 to 49 (n=35) 50 to 99 (n=9*) 100 or more (n=8*) Hiring new skilled 79% 79% 82% 75% 75% 77% Training 55% 50% 56% 73% 46% 89% Hiring sales personnel 37% 33% 40% 53% 22% 22% Retaining 28% 15% 36% 63% 24% 51% Succession planning 15% 12% 16% 28% 14% 40% Other 3% 6% 1% 0% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 50 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Types of project (cont d) In what type(s) of human resources project(s) do you intend to invest? Multiple answers allowed. (n=176) Less than $500K (n=44) $500K - <$2M (n=49) $2M - <$5M (n=36) $5M - <$10M (n=20*) $10M - <$20M (n=8*) $20M + (n=7*) Prefer not to answer (n=12*) Hiring new skilled 79% 87% 68% 82% 77% 89% 92% 76% Training 55% 50% 58% 47% 62% 54% 89% 63% Hiring sales personnel 37% 31% 44% 45% 52% 32% 11% 21% Retaining 28% 19% 21% 44% 48% 32% 70% 26% Succession planning 15% 9% 19% 21% 23% 11% 32% 10% Other 3% 3% 7% 3% 0% 0% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 51 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Amounts planned What amount do you expect to allocate to your investment in human resources in the next year? (n=157) Atlantic Canada (n=9*) Quebec (n=32) Ontario (n=61) Prairies (n=33) BC and Territories (n=22*) $10K or less 29% 49% 26% 16% 51% 15% $10,001 to $25K 12% 9% 15% 11% 9% 19% $25,001 to $50K 22% 23% 20% 17% 23% 37% $50,001 to $100K 19% 19% 16% 31% 13% 0% Over $100K 18% 0% 23% 25% 4% 29% Median $40,000 $10,000 $35,000 $60,000 $10,000 $40,000 (n=157) Fewer than 5 (n=45) 5 to 19 (n=64) 20 to 49 (n=32) 50 to 99 (n=9*) 100 or more (n=7*) $10K or less 29% 37% 26% 12% 0% 0% $10,001 to $25K 12% 13% 10% 15% 22% 0% $25,001 to $50K 22% 27% 16% 27% 11% 0% $50,001 to $100K 19% 10% 29% 22% 25% 33% Over $100K 18% 13% 19% 25% 43% 67% Median $40,000 $25,000 $50,000 $50,000 $100,000 $140,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 52 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Amounts planned (cont d) What amount do you expect to allocate to your investment in human resources in the next year? (n=157) Less than $500K (n=38) $500K - <$2M (n=42) $2M - <$5M (n=33) $5M - <$10M (n=19*) $10M - <$20M (n=8*) $20M + (n=7*) Prefer not to answer (n=10*) $10K or less 29% 33% 26% 26% 4% 0% 0% 71% $10,001 to $25K 12% 10% 17% 10% 12% 46% 0% 0% $25,001 to $50K 22% 30% 20% 28% 11% 11% 0% 7% $50,001 to $100K 19% 10% 21% 24% 38% 35% 32% 12% Over $100K 18% 17% 16% 13% 35% 8% 68% 10% Median $40,000 $30,000 $40,000 $40,000 $80,000 $20,000 $140,000 $5,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 53 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Kinds of financing What kind of financing will you turn to? Multiple answers allowed. (n=175) Atlantic Canada (n=10*) Quebec (n=37) Ontario (n=67) Prairies (n=38) BC and Territories (n=23*) Cash flow 59% 38% 31% 61% 78% 57% Working capital 40% 25% 44% 46% 30% 43% Line of credit 18% 25% 19% 21% 16% 7% Government program 18% 25% 21% 17% 18% 9% Equity from an institution (e.g. a venture capital company) 10% 9% 12% 19% 0% 7% Term loan 10% 16% 12% 14% 5% 0% Angel investors 8% 9% 6% 13% 3% 0% Scientific Research and Experimental Development (SR&ED) credits 7% 9% 10% 7% 2% 9% Quasi-equity (e.g. debentures) 3% 0% 3% 6% 0% 0% Lease financing 2% 0% 2% 3% 2% 0% Company credit card 2% 0% 0% 3% 2% 0% Mortgage 1% 0% 0% 2% 1% 0% Money from friends and family (love money) 1% 0% 0% 1% 0% 0% Other 1% 0% 3% 0% 0% 8% I don t know 7% 5% 19% 6% 4% 0% Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 54 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=175) Fewer than 5 (n=52) 5 to 19 (n=71) 20 to 49 (n=35) 50 to 99 (n=9*) 100 or more (n=8*) Cash flow 59% 54% 63% 70% 47% 78% Working capital 40% 47% 26% 51% 32% 40% Line of credit 18% 13% 18% 33% 22% 55% Government program 18% 18% 18% 22% 0% 0% Equity from an institution (e.g. a venture capital company) 10% 13% 9% 3% 22% 0% Term loan 10% 13% 7% 9% 0% 0% Angel investors 8% 7% 10% 4% 0% 0% Scientific Research and Experimental Development (SR&ED) credits 7% 4% 12% 3% 0% 0% Quasi-equity (e.g. debentures) 3% 4% 3% 0% 0% 0% Lease financing 2% 0% 5% 0% 10% 0% Company credit card 2% 0% 5% 0% 0% 0% Mortgage 1% 2% 0% 4% 0% 0% Money from friends and family (love money) 1% 0% 1% 0% 0% 0% Other 1% 2% 1% 0% 0% 0% I don t know 7% 5% 11% 3% 0% 0% Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 55 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in human resources: Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=175) Less than $500K (n=44) $500K - <$2M (n=49) $2M - <$5M (n=36) $5M - <$10M (n=20*) $10M - <$20M (n=8*) $20M + (n=7*) Prefer not to answer (n=11*) Cash flow 59% 51% 61% 76% 89% 54% 32% 40% Working capital 40% 39% 37% 35% 51% 32% 43% 51% Line of credit 18% 12% 24% 25% 8% 25% 41% 10% Government program 18% 21% 12% 15% 16% 0% 38% 24% Equity from an institution (e.g. a venture capital company) 10% 16% 6% 0% 0% 0% 38% 28% Term loan 10% 11% 12% 5% 17% 14% 0% 0% Angel investors 8% 8% 7% 2% 0% 0% 38% 18% SR&ED credits 7% 8% 8% 4% 4% 0% 0% 6% Quasi-equity (e.g. debentures) 3% 6% 2% 0% 0% 0% 0% 0% Lease financing 2% 0% 4% 3% 4% 0% 0% 0% Company credit card 2% 0% 4% 3% 0% 0% 0% 0% Mortgage 1% 3% 0% 2% 0% 0% 0% 0% Money from friends and family (love money) 1% 0% 0% 3% 0% 0% 0% 0% Other 1% 3% 0% 3% 0% 0% 0% 0% I don t know 7% 7% 9% 5% 0% 0% 0% 12% Base: Respondents who expect to invest in new human resources projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 56 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Types of project In what type(s) of R&D project(s) do you intend to invest? Multiple answers allowed. (n=186) Atlantic Canada (n=11*) Quebec (n=57) Ontario (n=60) Prairies (n=25*) BC and Territories (n=33) Developing a new product or service 76% 86% 68% 77% 84% 75% Launching a new product or service 56% 40% 50% 55% 68% 61% Creating sample products and prototypes 44% 49% 43% 43% 58% 33% Developing a new market 42% 69% 40% 43% 41% 34% Licences, patents and trademarks 29% 26% 23% 29% 23% 41% Other 4% 9% 3% 7% 4% 0% (n=186) Fewer than 5 (n=52) 5 to 19 (n=70) 20 to 49 (n=36) 50 to 99 (n=12*) 100 or more (n=16*) Developing a new product or service 76% 70% 81% 80% 75% 88% Launching a new product or service 56% 60% 54% 36% 58% 83% Creating sample products and prototypes 44% 41% 43% 44% 59% 76% Developing a new market 42% 34% 46% 57% 33% 67% Licences, patents and trademarks 29% 33% 28% 17% 25% 25% Other 4% 4% 6% 3% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 57 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Types of project (cont d) In what type(s) of R&D project(s) do you intend to invest? Multiple answers allowed. (n=186) Less than $500K (n=45) $500K - <$2M (n=52) $2M - <$5M (n=34) $5M - <$10M (n=20*) $10M - <$20M (n=10*) $20M + (n=12*) Prefer not to answer (n=13*) Developing a new product or service 76% 75% 74% 78% 56% 80% 100% 89% Launching a new product or service 56% 77% 46% 37% 42% 28% 85% 46% Creating sample products and prototypes 44% 50% 46% 28% 44% 50% 85% 20% Developing a new market 42% 42% 35% 41% 34% 60% 64% 56% Licences, patents and trademarks 29% 27% 35% 18% 35% 10% 25% 38% Other 4% 6% 3% 6% 0% 0% 0% 0% *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 58 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Amounts planned What amount do you expect to allocate to your investment in R&D in the next year? (n=164) Atlantic Canada (n=9*) Quebec (n=55) Ontario (n=52) Prairies (n=22*) BC and Territories (n=26*) $10K or less 15% 12% 24% 9% 5% 22% $10,001 to $25K 14% 0% 10% 19% 7% 17% $25,001 to $50K 18% 40% 26% 10% 9% 21% $50,001 to $100K 18% 18% 14% 15% 38% 13% Over $100K 36% 30% 25% 48% 42% 28% Median $70,000 $50,000 $40,000 $100,000 $100,000 $50,000 (n=164) Fewer than 5 (n=43) 5 to 19 (n=63) 20 to 49 (n=34) 50 to 99 (n=11*) 100 or more (n=13*) $10K or less 15% 20% 14% 3% 0% 0% $10,001 to $25K 14% 16% 14% 7% 0% 7% $25,001 to $50K 18% 18% 20% 11% 18% 0% $50,001 to $100K 18% 20% 16% 18% 27% 0% Over $100K 36% 25% 36% 62% 55% 93% Median $70,000 $50,000 $65,000 $130,000 $150,000 $700,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 59 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Amounts planned (cont d) What amount do you expect to allocate to your investment in R&D in the next year? (n=164) Less than $500K (n=41) $500K - <$2M (n=49) $2M - <$5M (n=31) $5M - <$10M (n=17*) $10M - <$20M (n=9*) $20M + (n=11*) Prefer not to answer (n=6*) $10K or less 15% 20% 22% 2% 0% 0% 0% 0% $10,001 to $25K 14% 17% 8% 17% 4% 0% 0% 40% $25,001 to $50K 18% 12% 21% 25% 10% 11% 0% 40% $50,001 to $100K 18% 15% 22% 15% 33% 36% 0% 0% Over $100K 36% 36% 26% 42% 54% 54% 100% 21% Median $70,000 $50,000 $50,000 $80,000 $125,000 $100,000 $700,000 $25,000 *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. 60 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Kinds of financing What kind of financing will you turn to? Multiple answers allowed. (n=183) Atlantic Canada (n=11*) Quebec (n=57) Ontario (n=59) Prairies (n=29*) BC and Territories (n=31) Cash flow 46% 49% 29% 46% 58% 57% Scientific Research and Experimental Development (SR&ED) credits 41% 26% 40% 40% 53% 36% Working capital 38% 26% 36% 32% 48% 44% Government program 30% 53% 30% 27% 37% 24% Line of credit 25% 19% 22% 27% 34% 18% Equity from an institution (e.g. a venture capital company) 17% 25% 12% 22% 4% 24% Angel investors 17% 9% 16% 16% 11% 26% Term loan 12% 9% 19% 11% 10% 5% Money from friends and family (love money) 10% 9% 4% 13% 8% 15% Company credit card 6% 9% 2% 10% 4% 3% Quasi-equity (e.g. debentures) 3% 0% 4% 6% 0% 1% Mortgage 1% 9% 1% 2% 0% 0% Lease financing 1% 0% 1% 2% 0% 0% Other 4% 9% 1% 6% 0% 6% I don t know 3% 0% 4% 6% 0% 0% Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. Numbers in red and green highlight statistically significant differences between sub-groups. 61 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=183) Fewer than 5 (n=50) 5 to 19 (n=69) 20 to 49 (n=36) 50 to 99 (n=12*) 100 or more (n=16*) Cash flow 46% 40% 49% 51% 66% 59% Scientific Research and Experimental Development (SR&ED) credits 41% 33% 49% 44% 42% 39% Working capital 38% 25% 51% 41% 33% 68% Government program 30% 28% 39% 17% 26% 6% Line of credit 25% 21% 29% 25% 25% 26% Equity from an institution (e.g. a venture capital company) 17% 23% 11% 13% 9% 6% Angel investors 17% 28% 7% 8% 0% 0% Term loan 12% 10% 13% 17% 0% 18% Money from friends and family (love money) 10% 16% 6% 3% 0% 0% Company credit card 6% 4% 9% 3% 0% 6% Quasi-equity (e.g. debentures) 3% 4% 1% 5% 0% 6% Mortgage 1% 0% 3% 3% 0% 0% Lease financing 1% 0% 1% 0% 0% 6% Other 4% 2% 7% 3% 0% 6% I don t know 3% 6% 0% 0% 0% 0% Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 62 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

Investing in research and development (R&D): Kinds of financing (cont d) What kind of financing will you turn to? Multiple answers allowed. (n=183) Less than $500K (n=44) $500K - <$2M (n=52) $2M - <$5M (n=34) $5M - <$10M (n=20*) $10M - <$20M (n=10*) $20M + (n=12*) Prefer not to answer (n=11*) Cash flow 46% 32% 62% 53% 44% 60% 70% 21% SR&ED credits 41% 49% 35% 39% 35% 31% 35% 39% Working capital 38% 31% 38% 59% 27% 37% 74% 24% Government program 30% 43% 26% 25% 14% 18% 0% 25% Line of credit 25% 23% 29% 24% 23% 20% 34% 14% Equity from an institution (e.g. a venture capital company) 17% 28% 6% 2% 8% 0% 8% 62% Angel investors 17% 35% 3% 2% 4% 0% 0% 38% Term loan 12% 13% 9% 23% 12% 0% 8% 0% Money from friends and family (love money) 10% 13% 4% 2% 14% 0% 0% 41% Company credit card 6% 9% 3% 2% 0% 0% 8% 14% Quasi-equity (e.g. debentures) 3% 3% 5% 0% 8% 0% 8% 0% Mortgage 1% 0% 3% 0% 4% 0% 0% 0% Lease financing 1% 0% 0% 4% 3% 0% 0% 0% Other 4% 7% 3% 0% 4% 0% 8% 0% I don t know 3% 8% 0% 0% 0% 0% 0% 0% Base: Respondents who expect to invest in new R&D projects within the next year. Those who answered "I prefer not to answer" were excluded. Numbers in red and green highlight statistically significant differences between sub-groups. *Due to a small number of respondents (n<30), numbers in italics should be interpreted with caution. 63 BUSINESS INVESTMENT PLANNING SEPTEMBER 2014

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