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Canada: Country and Foreign Investment

Investment Incentives

Canada offers an investment tax credit (ITC), which allows a sole trader or a partner to subtract, from taxes owed, part of the cost of some types of property acquired or expenditures incurred. Unused ITCs can be carried forward.

The Apprenticeship Job Creation Tax Credit (AJCTC) is a non-refundable investment tax credit equal to 10% of the salaries and wages payable to certain apprentices. In order to qualify for this tax credit, the apprentice must be working in a prescribed trade in the first two years of his or her apprenticeship contract, and the contract must be registered under a federal or provincial/territorial apprenticeship programme. Employers can claim a maximum of C$2,000 per year for each eligible apprentice. AJCTC can be added to the ITC in order to reduce federal taxes payable for the tax year. Unused credits can be carried back over three years or carried forward over 20 years.

Lastly, the Canadian Film or Video Production Tax Credit programme offers a refundable tax credit of 25% of labour expenses incurred by a qualifying corporation, whether or not tax resident in Canada, for the production of a Canadian film or video. Such labour expenses cannot exceed 60% of production costs, net of any assistance. The maximum credit available is therefore limited to 15% of production cost net of assistance.

 

 

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