The purpose of the research was to establish the degree of spatial diversity existing across Canada on a number of demographic, social and economic indicators and to highlight the implications of the observed spatial variation for rural development policy. [...] This section gives a brief description of the statistical terms used in the report, explains the principles of factor analysis and discusses the data and the variable selection process. [...] These are also some of the characteristics of the present study, while other features of the approach taken in this analysis are further discussed in section 3. The review presented below starts with a brief summary of the different techniques that have been used in this area of research and then moves to applications in the Canadian context. [...] The proportion of the variance of a variable that is explained by the common factors is called the communality of the variable. [...] In the model used, we assume the factors are uncorrelated with each other and thus the total proportion of the variance explained by the model is just the sum of the variance proportions explained by each factor.