Earlier this year, the Ontario Minister of Finance, Dwight Duncan, proposed a new 10-year income tax exemption for new corporations that commercialize intellectual property in Ontario developed by qualifying Canadian universities, colleges or research institutes.
In particular, Minister Duncan proposed a 10-year exemption from:
- Ontario Corporate Income Tax, and
- Corporate Minimum Tax for any qualifying corporation established after March 24, 2008 and before March 25, 2012.
In other words, Ontario is a welcome destination for innovators and entrepreneurs. A qualifying corporation would have to be incorporated in Canada and derive all, or substantially all, of its income from eligible commercialization activities carried on in Ontario.
The exemption would generally apply to corporations that commercialize intellectual property in priority areas such as, but not limited to, bio-economy/clean technologies, advanced health technologies, telecommunications, computer and digital technologies. Eligible commercialization activities would include the development of prototypes and the marketing and manufacturing of products related to the intellectual property.
Ontario has called on the federal government to support innovation by matching this income tax exemption.