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Canada: Country and Foreign Investment

Executive Summary

This page was last updated on 5 June 2019.

Canada is the world’s second largest country, with an area of 9,984,670 sq. km, of which 891,163 sq. km is inland water. Canada shares unfortified borders with the contiguous United States to the south and US state of Alaska to the north-west.

In June 2019, the population of Canada is estimated to be 37.4 million. English  and French are the official languages, though English predominates.

The head of state is the British monarch, Queen Elizabeth II, who is represented by the governor general. The country’s parliament consists of the Senate (with members appointed by the governor general under the advice of the serving prime minister) and the House of Commons, members of which are elected by popular vote to serve a maximum of five years. The leader of the majority party in the House of Commons is automatically designated as the country’s prime minister. The current Prime Minister is Stephen Harper.

Canada’s economic and technological development has been spurred by its close trade ties with the USA, which purchases around 80% of Canada’s exports. In 2011, services accounted for 70% of the economy, with industry accounting for 28.5%, and agriculture just under 2% of gross domestic product (GDP). The currency is the Canadian dollar (C$).

Telecommunications services are excellent and modern. There are 26 major airports, and the country has one of the world’s largest rail networks. Ports and terminals operating in Canada include Fraser River Port, Halifax, Hamilton, Montreal, Port-Cartier, Quebec City, St John (New Brunswick), Sept-Isles and Vancouver.

Corporation tax rates vary depending on the territories and provinces in which the business operates. The effective federal rate is 28%. Income tax rates range from 15% to 33%, depending on the various tax rate thresholds; there are also provincial/territorial personal income taxes. Capital gains are generally subject to income tax on 50% of the gain.

Tax privileged business sectors include, at provincial/territorial level, farming, mining, forestry, oil and gas exploration, and venture capital funds. At the federal level, tax credits are available for film and video production, and for research and development carried out in Canada. Some provinces/territories have enterprise zones that offer incentives to certain businesses, mainly in the form of property tax abatement.



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