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Tax Advantage

Incentives for Industry

The World Trade Magazine has ranked Canada in the Top 3 for Investment and Trade Opportunities, and with good reason.

Canada offers businesses low tax rates. Today, Canada has the lowest payroll taxes among the G7 countries and by 2012 Canada's corporate income tax rate will fall from 18 percent in 2010 to 15 percent in 2012 - less than half of the U.S. rate.

Canada's combined federal and provincial-territorial statutory coporate tax rate decline from 31.3% in 2009 to 30.8% in 2010. It is on track to drop to 27.2% by 2012 at which point Canada will have the lowest statutory corporate tax rate in the G7 by 2012 (Table 1).

By 2012, Canada will also have a statutory corporate tax rate advantage over the United States of almost 12 percentage points.

TABLE 1
STATUTORY GENERAL CORPORATE INCOME
TAX RATES IN G7 COUNTRIES
 

Percent (%)
2009

Percent (%)
2012
Japan
39.5
39.5
United States
39.1
39.1
France
34.4
34.4
Italy
37.3
31.4
Germany
30.2
30.2
United Kingdom
28.0
28.0
Canada
31.3
27.2


National Incentives

Canada’s proactive federal government wants your business and it pulls out all the stops to make it worth your while. To truly welcome foreign investment, it offers numerous incentives to ensure new businesses will be successful.

Export Development Canada (EDC): Financing Support for Inbound Foreign Direct Investment
New! In response to the Government of Canada’s efforts to encourage foreign companies to invest in Canada, EDC now offers financing support for inbound foreign investment.

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.

BDC Financing
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 Industry Services
The Canada Revenue Agency administers two film tax credit programs to help the film industry in Canada.

To be eligible for most incentives, you must have a company established in Canada.