Incentives and Taxes

The World Trade Magazine has ranked Canada in the Top 3 for Investment and Trade Opportunities. Today, Canada can guarantee investors the overall lowest tax rate among developed countries and the most preferable R&D; tax credit program among G7 countries. To truly welcome foreign investment, Canada has introduced many incentives to ensure new businesses will be successful.

• Taxation
• National Incentives
• Provincial Incentives

To be eligible for most incentives, you must have a company established in Canada. Please contact your local Canadian Diplomatic Mission for more information.

Taxation
Canada offers businesses low tax rates. Today, Canada has the lowest payroll taxes among the G7 countries and by 2010 Canadian–based firms are expected to average a corporate tax advantage of more than 4.5 percentage points over U.S. based firms.

The following sources will provide you with more information:

• Department of Finance Learn more about the Canadian Tax Advantage
• Establish a Business in Canada Information for foreign businesses considering setting up an operation in Canada
• International and Non-Resident This section of Canada Customs and Revenue's web site is specifically designed for foreign investors.

National Incentives for Investment

• Summary of R&D; Tax Incentives in Canada: PDF
  The Advantages of Doing Research in Canada
• Scientific Research and Experimental Development Program
  Business involved in research and development can apply for tax credits on expenditures such as wages, materials and equipment. Administered by the Canada Revenue Agency (CRA).
• Industrial Research Assistance Program
  Small- and medium-sized foreign subsidiaries incorporated in Canada can apply for on-site aid from IRAP's Technology Advisors. Administered by the National Research Council of Canada.
• Technology Partnerships Canada
  TPC provides funding for high-risk R&D; investments that are innovative and have the potential to benefit Canadians. Administered by Industry Canada.
• BDC Venture Capital
  The Business Development Bank of Canada funds companies with a basis in technology and a sustainable, market-oriented business plan.
• Natural Sciences and Engineering Research Council of Canada
  NSERC works with companies that have been provincially or federally incorporated in Canada to encourage research and development in collaboration with universities and students.
• Precarn
  Precarn funds projects involving the participation of at least two companies and one university, and works with funding programs in other companies to support research and development in the field of intelligence systems.
• Film Tax Credit Programs
  The CRA administers two film tax credit programs to help the film industry in Canada.

Provincial Incentives for Investment

• Alberta :
  • Business Tax Rebates
• British Columbia :
  • Film and Television Tax Credit and Production Services Tax Credit
  • Scientific Research and Experimental Development Tax Credit
  • BC Mining and Exploration Tax Credit
  • Book Publishing Tax Credit
  • The International Financial Business (Tax Refund) Act was replaced by the International Financial Activity Act, effective September 1, 2004.Information on the new program can be found at International Financial Activity.
• Manitoba :
  • General information on Tax Incentives
• Newfoundland and Labrador:
  • Manufacturing and Processing Profits Tax Credit
  • Small Business Tax Credit
  • Economic Diversification and Growth Enterprise Program
  • Direct Equity Tax Credit
  • Small Business Corporate Income Tax Holiday
  • Film and Video Tax Credit
• New Brunswick
  • Incentives, Financial Assistance and Tax Credits
  • New Brunswick Film incentives
• Northwest Territories
  • Risk Capital Investment Tax Credit
• Nova Scotia
  • Tax Environment
  • Scientific Research & Experimental Development Tax Credits
  • Nova Scotia Business Inc. Payroll Rebate
  • Nova Scotia Business Inc. Financial Services
  • Film Industry Tax Credit
  • Equity Tax Credit
  • Other Programs
• Ontario
  • R&D; Challenge Fund
  • Ontario Innovation Tax Credit
  • Ontario Business-Research Institute Tax Credit
  • Ontario New Technology Tax Incentive
  • Ontario Graduate Transitions Tax Credit
• Prince Edward Island
  • Business Support Programs
  • Equity Investors Incentive Program
  • Rental Incentive Program
• Quebec
  • Tax Benefits
  • Taxation Measures to Promote R&D; Activities
• Saskatchewan
  • Cost of Doing Business

Related Link
2003 World Investment Report
Canada ranks as a front-runner location for foreign direct investment in the world.