No, they have said that Canonical/Ubuntu doesn't participate in upstream development. This says nothing about the number of bugs they send upstream, or how much development they do for themselves. I've heard that they do quite a bit of work on their packages and never bother pushing it even to debian -- but that is a side argument.
Personally I wouldn't care much if they did 10x the development they pushed upstream, locally, and 100x the bugs than they did fixes ... as long as they did their "fair share" of the upstream work, and generally stopped taking credit for the work Red Hat, IBM and Novell are doing for them.
This is mainly an economics argument, in that if they keep getting all the credit/mindshare and thus. a sizable number of the users ... development will freezeup as Red Hat/Novell will not be able to afford to spend money they aren't making back.