Ontario offers a unique environment of collaboration where automotive R&D facilities, professional associations, academic institutions, and private enterprise form a powerful innovation ecosystem—a system you can immediately plug into whether you are developing the latest advancements in composite materials or the next revolution in automotive connectivity. With access to leading scientists, state-of-the-art R&D facilities, generous tax credits, and an incredibly skilled workforce, Ontario is one of the world's most progressive locations to perform automotive R&D.

 

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An abundance of scientific knowledge and talent

Ontario universities provide a deep pool of qualified Masters and Ph.D candidates who are available to apply their superior skills to critical manufacturing projects.


Ontario universities provide a deep pool of qualified Masters and Ph.D candidates who are available to apply their superior skills to critical manufacturing projects. In Ontario, you will find a knowledge base that will drive your innovative ideas further than you can imagine.

Ontario has attracted world-leading researchers such as Dr. Ali Emadi, and Dr. Norman Zhou to improve products for business. Dr. Emadi, one of the world's foremost developers of electric and hybrid powertrain technology, heads up the McMaster Institute for Automotive Research and Technology (MacAuto) while Dr. Norman Zhou of the University of Waterloo's Centre for Advanced Materials Joining (CAMJ) works on solutions to joining dissimilar materials.

Some of the world's leading R&D organizations have already discovered the benefit of doing business in Ontario—and you can too.

  • CISCO is investing $4 billion over 10 years to create a R&D centre in Ottawa.
  • Ford is investing $590 million to expand its Powertrain Engineering Research and Development Centre at its Essex Engine plant in Windsor, Ontario.
  • IBM CAS (Centre for Advanced Studies) has Software Labs in Toronto, Ottawa and London, Ontario.
  • Magna, DANA, Decoma, Honda R&D Americas, Intier, Martinrea, Toyota, Nissan, The Woodbridge Group, Yamaha and many more conduct R&D in Ontario.

Ontario is where you'll find state-of-the-art facilities

Tackling today's challenges requires access to state-of-the-art facilities to create the products of the future.


Tackling today's challenges requires access to state-of-the-art facilities to create the products of the future. Here are just a few examples of facilities that provide a new understanding of complex materials and product improvements in the automotive sector. If you are an R&D innovator, imagine the possibilities of locating in proximity to Ontario's robust innovation ecosystem.

The Automotive Centre of Excellence at the University of Ontario Institute of Technology is one of the largest and most sophisticated climatic wind tunnels on the planet where test winds reach speeds of 240 kilometres per hour, temperatures range from -40 to +60°C and relative humidity ranges from 5-95%.

Canmet MATERIALS Lab in Hamilton, along with its lab in Calgary, is the largest research centre in Canada dedicated to metals and materials fabrication, processing and evaluation.

The Fraunhofer Project Centre for Composites Research in partnership with the University of Western Ontario is developing materials that are lightweight or have low life-cycle impact for manufacturers in the automotive, transportation, construction, defense and renewable energy sectors.

The Waterloo Centre for Intelligent Antenna and Radio Systems (CIARS) provides researchers with an inspiring exploration and development environment for innovation in all aspects of electromagnetic communication and sensing science and engineering.

CIARS

The most generous R&D tax credits in the developed world

These incentives allow companies to see greater value from their R&D budgets.


These incentives allow companies to see greater value from their R&D budgets. Tax credits frees up funds to hire more researchers and enhance profitability. Tax credits can be carried back for three years or forward for 20 years allowing you to reduce your federal tax bill. When combined with federal R&D programs, Ontario's R&D tax credit program can reduce your after-tax cost of every $100 in R&D spending to between $61 and $37 and there is no cap on the program.

Costs qualifying for R&D tax incentives, 2014
  Ontario United States
Wages
Materials
Overhead  
Contract expenses 80% 65%
Source: Canada Revenue Agency and U.S. Internal Revenue Service, 2014

Ontario's R&D tax credit program

Select the best description of your operation to see possible after-tax savings you could achieve on your R&D expenditures in Ontario.

Public, private or foreign-owned

  R&D expenditures R&D expenditures at eligible institutitions1
Gross expenditure $100.00 $100.00
Ontario – 20% OBRI2 Tax Credit   -$20.00
Ontario – 4.5% ORDTC3 -$4.50 -$3.60
Federal investment tax credit – 20% -$14.33 -$11.46
Tax deduction4:
(Combined federal of 15% and
provincial of 10% = 25%)
-$20.29 -$16.24
After-tax cost of $100 expenditure $60.88 $48.71

NOTES:
  1. Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario.
  2. The 20% refundable Ontario Business-Research Institute Tax Credit.
  3. The 4.5% Ontario Research and Development Tax Credit.
  4. Tax rates for large manufacturers: Federal 15.0% plus Ontario 10.0% = 25.0%

Public, private or foreign-owned

  R&D expenditures R&D expenditures at eligible institutions2
Gross expenditure $100.00 $100.00
Ontario – 20% OBRI3 Tax Credit   -$20.00
Ontario – 10% OITC4 -$10.00 -$10.00
Ontario – 4.5% ORDTC5 -$4.05 -$3.15
Federal investment tax credit – 15% -$12.89 -$10.03
Tax deduction6:
(Combined federal of 15% and
provincial of 10% = 25%)
-$18.26 -$14.21
After-tax cost of $100 expenditure $54.79 $42.62

NOTES:
  1. Medium-sized companies have taxable income of less than $500,000 and taxable capital of less than $50 million.
  2. Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario.
  3. The 20% refundable Ontario Business-Research Institute Tax Credit.
  4. The 10% refundable Ontario Innovation Tax Credit.
  5. The 4.5% Ontario Research and Development Tax Credit.
  6. Tax rates for manufacturers: Federal 15.0% plus Ontario 10.0% = 25.0%

Public, private or foreign-owned

  R&D expenditures R&D expenditures at eligible institutions1
Gross expenditure $100.00 $100.00
Ontario – 20% OBRI2 Tax Credit   -$20.00
Ontario – 4.5% ORDTC3 -$4.50 -$3.60
Federal investment tax credit – 15% -$14.33 -$11.46
Tax deduction4:
(Combined federal of 15% and
provincial of 11.5% = 26.5%)
-$21.51 -$17.21
After-tax cost of $100 expenditure $59.66 $47.73

NOTES:
  1. Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario.
  2. The 20% refundable Ontario Business-Research Institute Tax Credit.
  3. The 4.5% Ontario Research and Development Tax Credit
  4. Tax rates for large non-manufacturers: Federal 15.0% plus Ontario 11.5% = Total 26.5%

Public, private or foreign-owned

  R&D expenditures R&D expenditures at eligible institutions2
Gross expenditure $100.00 $100.00
Ontario – 20% OBRI3 Tax Credit   -$20.00
Ontario – 10% OITC4 -$10.00 -$10.00
Ontario – 4.5% ORDTC5 -$4.05 -$3.15
Federal investment tax credit – 15% -$12.89 -$10.03
Tax deduction6:
(Combined federal of 15% and
provincial of 11.5% = 26.5%)
-$19.36 -$15.06
After-tax cost of $100 expenditure $53.70 $41.76

NOTES:
  1. Medium-sized companies have taxable income of less than $500,000 and taxable capital of less than $50 million.
  2. Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario.
  3. The 20% refundable Ontario Business-Research Institute Tax Credit.
  4. The 10% refundable Ontario Innovation Tax Credit.
  5. The 4.5% Ontario Research and Development Tax Credit.
  6. Tax rates for non-manufacturers: Federal 15.0% plus Ontario 11.5% = Total 26.5%
  R&D expenditures R&D expenditures at eligible institutions2
Gross expenditure $100.00 $100.00
Ontario – 20% OBRI3 Tax Credit   -$10.00
Ontario – 10% OITC4 -$10.00 -$10.00
Ontario – 4.5% ORDTC5 -$4.05 -$3.15
Federal investment tax credit – 35% -$30.08 -$23.40
Tax deduction6:
(Combined federal of 11% and
provincial of 4.5% = 15.5%)
-$8.06 -$6.73
After-tax cost of $100 expenditure $47.21 $36.72

NOTES:
  1. Small CCPCs have taxable income of less than $500,000 and taxable capital of less than $15 million.
  2. Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario.
  3. The 20% refundable Ontario Business-Research Institute Tax Credit.
  4. The 10% refundable Ontario Innovation Tax Credit.
  5. The 4.5% Ontario Research and Development Tax Credit.
  6. Tax rates for small CCPCs on the first $500,000 of taxable income: Federal 11% plus Ontario 4.5% = 15.5%

Table Data Source: Ontario Ministry of Finance, January 2014

* The information provided here presents a potential after-tax cost based on assumptions regarding R&D expenditures, tax incentives and tax rates that may not apply to your business. This information does not constitute tax advice. Please consult your tax advisor to determine the after-tax cost of R&D expenditures for your business.


R&D institutions that focus on both the challenges of today and tomorrow

Ontario and its industry partners are heavily invested in the future of automotive R&D and specialize in lightweight materials, the next generation of coatings, electric and hybrid powertrain technologies, connected car technologies, injury prevention or enhanced safety.


Ontario and its industry partners are heavily invested in the future of automotive R&D and specialize in lightweight materials, the next generation of coatings, electric and hybrid powertrain technologies, connected car technologies, injury prevention or enhanced safety. You will benefit from having access to this extensive R&D ecosystem where you can work on and test your own concepts or collaborate with other innovators toward a common goal.

Working together to find solutions to manufacturing problems, refining products as well as creating new products is how R&D in Ontario can help your company create innovative solutions and new products. Here are a just a few examples:

Toyota, Maplesoft and the University of Waterloo collaborated to win the Synergy Award for Innovation
Find out how Toyota Motor Manufacturing, the University of Waterloo and software modelling leader Maplesoft worked together to improve the alignment of the Lexus RX350.
http://www.investinontario.com/case-studies/how-toyota-maplesoft-and-university-waterloo-collaborated-win-synergy-award-innovation

Wescast Industries Inc
As the global automobile industry responds to consumer demands for higher performance, and lighter and more fuel efficient vehicles, auto parts makers must develop new cost-effective and durable materials in order to stay competitive. Wescast Industries Inc., one of the world's leading producers of automotive exhaust manifolds and turbo charger housings, has developed a new high-performance alloy that can better withstand higher exhaust temperatures produced by many of today's vehicles than traditional cast iron materials. The new alloy will result in superior 'made-in-Ontario' automotive components.

Key people involved with the project
(From left) OCE Business Development Manager, Gillian Sheldon with Product Development Project Engineer at Wescast Industries Inc., Gary Burkhalter (centre); and Professor and Director of McMaster Manufacturing Research Institute (MMRI), Dr. Stephen Veldhuis, at Wescast's Brantford headquarters.

3M Canada
Advanced capabilities and proximity to Ontario's automotive sector attracted global science and technology company 3M to collaborate with OCE, the University of Waterloo and McMaster University in developing new product applications for their films and adhesives.

Project team assessing strength of adhesives in place of conventional welds and fasteners

Technology Transfer Partnerships: Tyromer (C4)
Each year, more than 12 million tires are scrapped in Ontario. Current recycling processes make it impossible to blend the rubber back into rubber compounds, resulting in most tires being burned or used as filler. Waterloo-based start-up company, Tyromer Inc., has a solution.

Tyromer polymer being produced

Technology Transfer Partnerships: Switchable Solutions (PARTEQ-RCN)
PARTEQ Innovations' GreenCentre Canada formed Switchable Solutions Inc. in 2011 to commercialize an environmentally friendly solvent system that can convert used plastics products into market-ready raw materials.

Researcher testing a solvent

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