McGuinty Government Helping Turn Ideas Into High-Tech Jobs
TORONTO, Sept. 23 /CNW/ -
Today, the government intends to introduce Ideas for the Future Act,
2008, that, if passed, would provide a 10-year corporate income tax exemption
for new companies that turn home-grown ideas into Ontario jobs and products.
The tax exemption - the first of its kind in Canada - would encourage
Ontario's entrepreneurs to commercialize public research in areas such as
bio-economy/clean technologies, advanced health technologies, and
telecommunications, computer and digital technologies.
Qualifying corporations that commercialize an idea would be eligible for
the tax exemption if developed at qualifying Canadian universities, colleges
or research institutes.
"This landmark corporate tax measure, the first of its kind in Canada,
provides a strong incentive for firms to take ideas and turn them into real,
commercial products," said Dwight Duncan, Minister of Finance
(http://www.fin.gov.on.ca/english/about/min.html). "In an increasingly global
market, we are helping to launch the next wave of Ontario's innovators by
reforming the tax system to promote leadership in investment and economic
growth in Ontario."
"Ontario's Innovation Agenda is a fundamental part of Ontario's
five-point economic plan for the economy, which will help us sustain the high
quality of life that we enjoy today - and create the high-value jobs of the
future. Today, we're taking the next step in sending a message to researchers
across Canada and companies around the world, that if you've got an innovative
project that will build on our research strengths and create jobs, Ontario is
the place to be," said Minister of Research and Innovation John Wilkinson
"Ontario is the fourth largest biomedical research centre in North
America, a global leader in digital media and information and communications
technologies and one of the top provinces in alternative energy and climate
change initiatives," said Dr. Paul C. Genest, President and CEO of the Council
of Ontario Universities (http://www.cou.on.ca/). "This enlightened new tax
measure will help to create a greener, healthier and economically stronger
province by tapping into our research excellence, strengthening the
partnerships between researchers and businesses and promoting commercial
"Ontario's colleges have a successful track record of working together
with business and industry and we support this measure to promote applied
research and innovation," said Linda Franklin, President and CEO, Colleges
Ontario (http://www.collegesontario.org/). "Half of the jobs in the next
15 years will require the ability to use technology that has not yet been
invented and Ontario must be ready to lead the way in technological
- If passed, Ideas for the Future Act, 2008, would support Ontario's
innovation agenda and the creation of jobs in the high-priority areas
of advanced health, bio-economy/clean technologies; and,
telecommunications, computer or digital technologies.
- When foreign venture capital invests in Canada, 59 per cent of that
capital comes to Ontario.
Read more about Ontario's comprehensive five-point economic plan
See the Ontario Tax Exemption for Commercialization Backgrounder.
Learn about the Ministry of Research and Innovation's Innovation Agenda
(http://www.mri.gov.on.ca/english/programs/oia/program.asp) and Ontario's
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ONTARIO SUPPORTS INNOVATIVE BUSINESSES IN
COMMERCIALIZING RESEARCH BY POST-SECONDARY SCHOOLS
AND RESEARCH INSTITUTESTo foster innovation in the Ontario economy, the provincial government
intends to introduce legislation today, the first of its kind in Canada, to
enact a 2008 Budget
(http://www.fin.gov.on.ca/english/budget/ontariobudgets/2008/) proposal that
would support business start-ups that commercialize new technology by public
research institutions. If approved, new businesses in Ontario that
commercialize eligible intellectual property developed by qualifying Canadian
universities, colleges or research institutes would be eligible to claim a
10-year corporate income tax refund.
The Ideas for the Future Act, 2008, would allow a qualifying new
corporation to receive a refund from the Minister of Revenue equal to the
amount of Ontario Corporate Income Tax and Corporate Minimum Tax paid in the
taxation year, for up to the corporation's first 10 taxation years.
To qualify for the proposed incentive, a new corporation must be
incorporated in Canada after March 24, 2008 and before March 25, 2012 and
derive all, or substantially all, of its revenue from an eligible
commercialization business.An eligible commercialization business would:
- commercialize intellectual property in one or more of the following
priority areas for economic growth: advanced health, bioeconomy
(which includes clean energy technologies), telecommunications,
computer or digital media technologies and other new technologies
that may be prescribed; and
- sell a product where the key component is based on eligible
intellectual property or license a computer program based on eligible
intellectual property.Eligible intellectual property would include patented property and
copyrighted computer programs that constitute a technological advancement.
Eligible intellectual property must be developed by an employee or a student
of a qualifying Canadian research institution.
The Minister of Research and Innovation
(http://www.mri.gov.on.ca/english/about/MinisterBio.asp) would be responsible
for certifying an eligible commercialization business and would issue a
Certificate of Eligibility to the qualifying corporation for the purpose of
applying to the Minister of Revenue for a refund.
The 2008 Ontario Budget promotes a culture of innovation and builds on
the government's innovation agenda through nearly $300 million in new
investments and proposed tax initiatives that support the start-up and growth
of innovative firms.Programs and tax incentives designed to encourage innovation in Ontario
Ontario Innovation Tax Credit (OITC)
- Small and medium-sized Ontario corporations are able to claim a
10 per cent refundable tax credit on qualifying research and
development (R&D) expenditures in Ontario.
Ontario Research and Development Tax Credit
- For taxation years ending after 2008, Ontario corporations are able
to claim a 4.5 per cent non-refundable tax credit on qualifying R&D
expenditures in Ontario.
Ontario Business-Research Institute (OBRI) Tax Credit
- Ontario corporations are able to claim a 20 per cent refundable tax
credit for qualifying R&D expenditures incurred in Ontario as part of
an eligible research contract with an eligible Ontario research
institute. Ontario corporations are able to claim the OITC in
addition the OBRI Tax Credit for potential combined Ontario tax
credits of 30% on qualifying R&D expenditures in Ontario.
Innovation Demonstration Fund
- Provides financial support of up to 50% of eligible costs to help
Ontario companies with the commercialization and initial
demonstration of their innovative technologies.
Next Generation of Jobs Fund with three streams of funding:
1. Jobs and Investment Program to help companies in a range of sectors
to expand in Ontario and develop innovative products for global
markets - up to 15 per cent of eligible project costs.
2. Biopharmaceutical Investment Program to support the expansion of
research and advanced manufacturing by pharmaceutical and
biotechnology firms - up to 20 per cent of eligible project costs.
3. Strategic Opportunities Program to support industry-led,
public-private collaborations focused on increasing Ontario's
innovation expertise in the bio-economy and clean technologies,
advanced health technologies and creative industries - up to
25 per cent of eligible project/program costs.
Ontario Research Commercialization Program
- Provides grants ranging from $100,000 to $750,000 a year for up to
three years, to help publicly funded Ontario research institutions
and not-for-profit organizations transfer their research to the
Read the news release.
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For further information: Alicia Johnston, Minister's Office, (416)
325-3645; Scott Blodgett, Ministry of Finance, (416) 325-0324