R&D advantage

Canada’s large cities are among the best places in the world for research and development (R&D)-driven businesses. Favourable R&D tax treatment is complemented by easy access to hundreds of research institutions, world-class universities and tens of thousands of scientists and engineers doing cutting-edge research across the country in sectors including:

• Advanced manufacturing (automotive, aerospace and defence)
• Machinery and equipment (metalworking, mining oil and gas, agricultural)
• Agri-food production and processing (grain and oilseed, meat, nutraceuticals)
• Chemicals and plastics (petrochemicals, synthetic resins, agricultural chemicals)
• Clean technologies (renewable energy, environmental)
• Information and Communications technology (digital media, software, wireless communications)
• Life sciences (biopharmaceuticals, medical devices)
• Oceans technology (climate change, biodiversity, renewable energy)
• Business services (engineering, IT outsourcing, banking and asset management)

Canada invests more in higher education R&D as a share of the economy than does any other G7 country, and offers one of the most favourable tax treatments for R&D in the industrialized world and among the G7, with combined federal and provincial credits that can save foreign investors, on average, up to 30 cents on the dollar invested in R&D in Canada. The Canadian system of tax credits and accelerated tax deductions covers eligible costs including salaries, overhead, capital equipment, and materials. These tax-based incentives permit companies to significantly reduce R&D costs through direct investment or subcontracting in Canada.