IT companies thrive here

Are you looking for a highly educated and talented workforce? Lower labour costs? A broad ecosystem for innovation and R&D? You'll find them all here in Ontario.

Who's here?

World leaders in big data and cloud computing, data centres, microelectronics, digital media, security encryption, mobile gaming, mobile payments, wireless, telecom and networks and seven of the ten largest tech companies in the world conduct R&D in Ontario.

From A to Z . . .

IT companies doing business here include:

Alcatel-Lucent, Agfa Graphics, AMD, Avaya, Bell, bitHeads, BlackBerry, Blammo Games, Celestica, Christie Digital, CGI, COMDEV, DragonWave, Ciena, Cisco, Cogeco, Crosscliq, Desire2Learn, Dell, Digital Extremes, Don River, Ericsson, Facebook, G4S, Gameloft, Gemalto, Giesecke & Devrient, Google, Huawei, HP, IBM, IMAX, Intel, Intelligent Mechatronic Systems, Interac, Microsoft, MIS Electronics, Mitel, Nokia, OpenText, Oracle, Parametric, Siemens, QA Consultants, QNX, Redknee, Rockstar, Rogers, Ross Video, Sandvine, SAP, SAS, SecureKey, Shopify, SMTC, Square, Teledyne DALSA, Telesat, TELUS, Transgaming, Twitter, Ubisoft, ViXS, Xerox, XMG Studio, Wipro, WipWare and Zycom.

Why are they here?

We're a magnet for leading IT corporations because of the quality and size of our workforce.

  • We have an IT workforce of about 250,000 workers, 80% of whom have a post-secondary degree.
  • Each year, our 44 colleges and universities, which offer more than 200 cooperative programs in the field of IT, produce approximately 36,000 skilled graduates.
  • Our graduates from science, technology, engineering and maths (STEM) programs giving businesses what they need most: innovative and skilled problem solvers.
  • Whether they graduate from the University of Waterloo's engineering program (the second largest source of engineering talent after MIT in North America), Sheridan College (which has been called the Harvard of animation) or the other 42 colleges and universities, corporations know that our workforce is industry ready.
  • Also, salary costs are approximately 30% lower in Ontario than other competitive jurisdictions.
Sample comparative IT salaries
Rank Jurisdiction Population % of population (25+ years of age) with Bachelor's degree or higher Number
of IT companies (2011)
Number of
IT workers (2012)
Software Engineer
(5-year average)
Computer Software Developer
(5-year average)
            $ Index $ Index
1 California 38,041,430 30% 33,607 714,000 111.00 131 116.40 132
2 Ontario 13,505,900 30% 19,000** 250,000 84.60* 100 88.30* 100
3 Texas 26,059,203 26% 17,260 447,700 90.80 107 95.40 108
4 New York 19,570,261 33% 14,670 261,700 102.30 121 107.20 121
*Based on an unweighted average of Toronto, Ottawa and Waterloo for a period of five years.
**2013, revised number of companies for US jurisdictions for 2012, expected by July 2014.

 

IT salary comparisons by region
Jurisdiction Software Engineer
1-year average total compensation (C$)
Index Software Engineer
5-year average total compensation (C$)
Index Computer Software Developer
1-year average total compensation (C$)
Index Computer Software Developer
5-year average total compensation (C$)
Index
CA San Jose 87,983 126 111,038 128 96,319 127 116,369 129
MA Boston 80,868 116 100,873 116 88,006 116 105,525 117
TX Dallas 71,910 103 90,815 105 78,638 104 95,358 105
NY New York City 81,756 117 102,280 118 89,028 117 107,164 118
Ontario Toronto 69,970 100 86,700 100 75,858 100 90,526 100
Ottawa 68,935 99 85,403 99 74,729 99 89,172 99
Kitchener-Waterloo 66,250 95 81,752 94 71,665 94 85,330 94
Source: Economic Research Institute, March 2014
Notes: All values are in Canadian dollars, rounded to the nearest dollar
All data denotes the total compensation package, which include both salary and benefits.

 

What do IT leaders say about running their businesses in Ontario?

A lot of industry leaders have experienced our business advantages firsthand. Find out what they've said about running their businesses in Ontario.

Chipworks

Chipworks are tech wizards who can take apart a smartphone and discover precisely whose patents are buried in the chipsets. It's called reverse engineering, and they are one of the most respected names in the business.

"Ninety-seven per cent of our business comes from exports," says Chipworks' Founder and CEO Terry Ludlow. "We're not here because our customers are here. We're here because it's a pretty good place to build a business."

OnX Enterprise Solutions

OnX Enterprise Solutions provides business with the latest in cloud applications.

"Clients look to us for skill sets to augment and leverage their in-house capacity," says Paul Khawaja, president of OnX Canada. "Frankly, Ontario is loaded with talent. The expertise and diversity available here has enabled us to expand both organically and through strategic acquisitions."

SAS Institute Inc.

SAS Institute is a world leader in data mining and analytics. "Ontario is the business hub of Canada," says Carl Farrell, president of SAS Canada. "If you're planning to do business in Canada, Ontario is the logical place to start."

SAS Canada has had great success collaborating with our post-secondary schools to create curricula that address the needs of the IT industry and ensure students are well trained to work in IT, says Mr. Farrell.

The IBM Research Centre

Like other leading IT companies that have operations in the province, IBM was drawn to Ontario for a host of reasons, not least of which is our robust and open R&D environment, generous R&D tax incentives, low business taxes and a quality of life that attracts and keeps top global talent.

At the IBM centre in Ontario, researchers at the universities of Toronto, Western Ontario, McMaster, Queen's, Ottawa, Waterloo and the Ontario Institute of Technology will focus on four specific areas: health care, water conservation and management, energy use and aging urban infrastructure.

Why did IBM choose Ontario for this one-of-a-kind cutting-edge research and development centre? "To start with, these are areas of great research strength in Ontario. That was key to our decision," says Pat Horgan, vice president of manufacturing, development and operations for IBM Canada and one of the driving forces behind the $210 million project in which IBM is investing $175 million. The Government of Ontario is contributing $15 million and the Government of Canada $20 million.

 

A concentration of world-renowned research institutes

One of the great advantages of doing IT in Ontario is access to some of the top researchers and institutes, who work collaboratively with businesses on innovative solutions.

An R&D hotspot

Major corporations such as Cisco, IBM and Xerox have set up major research centres here.

Select Ontario IT research centres and institutes

 

The following chart lists just some examples of Ontario's world-renowned research institutes that work with business to discover solutions to today's challenges.

Examples of Ontario's world-renowned research institutes
Sector University Region Institutes/Centres
Communications University of Toronto GTA Emerging Communications Technology Institute
Cryptography University of Waterloo Kitchener-Waterloo Centre for Applied Cryptographic Research
Geoinformatics University of Toronto GTA Centre for Geoinformatics
GIS Sault Ste. Marie Innovation Centre Sault Ste. Marie Sault Ste. Marie Innovation Centre
Imaging University of Western Ontario London Centre for Advanced Biomedical Imaging Research
Imaging University of Windsor Windsor Institute for Diagnostic Imaging Research
Learning Ryerson University GTA Centre for Learning Technologies
Microelectronics University of Toronto GTA Centre for Microelectronics Assembly and Packaging
Quantum Computing University of Waterloo Kitchener-Waterloo Institute of Quantum Computing
Semiconductors McMaster University Hamilton Centre for Emerging Device Technologies
Telecommunications Government of Canada Ottawa Communications Research Centre
Virtual Laboratory Queen's University Kingston High Performance Computing Virtual Laboratory
Wireless Technologies University of Waterloo Kitchener-Waterloo Centre for Intelligent Antenna and Radio Systems

 

Ontario's IT industry: a map of the leading tech hotspots

Ontario's IT industry is mainly clustered in three main centres: Ottawa, Toronto and Waterloo.

 

Use the map to explore our thriving IT industry clusters.

 

A great place to live

Recruiting top-notch talent is only part of the challenge. Retaining mobile, in-demand talent is just as vital. That's where our high quality of life can help you grow.

Enjoy our desirable quality of life

In all three IT hubs, Ottawa, the Greater Toronto Area and Waterloo – and throughout Ontario – you'll find the kind of environment that's critical to attracting and retaining talent: great schools, affordable housing, organized sports, museums, music of all kinds, excellent hospitals and a diversity of cultures that makes everyone feel at home.

  • We offer your employees the ideal balance of lifestyle, opportunity and a more affordable cost of living than many similar U.S. and international locations.
  • Our cities offer a world-class, cosmopolitan and multicultural scene, with great museums, theatres and fine dining.
  • Outdoor types will find great golf, great places to camp, hike, ski and skate.
  • Employees with families will find great schools and friendly communities where they will feel right at home.
  • Ontario also provides substantially more affordable healthcare and housing costs compared to many major U.S. cities.

Canada was ranked number three by the OEDC in its Better Life Index.


OECD Better Life Index 2013
Rank City
1 Australia
2 Sweden
3 Canada
4 Norway
5 Switzerland
6 United States
7 Denmark
8 Netherlands
9 Iceland
10 Vancouver
Source: OECD Better Life Index 2013

 

Generous R&D tax credits that give the best return on your investment

We're committed to driving the leading edge of IT, and we provide companies with powerful financial incentives that can cut costs dramatically.

Generous R&D tax credits

We offer some of the most generous innovation incentives in the world, working to reduce your after-tax cost of every $100 spent in R&D to between $61 and $37.

It's not surprising that KPMG's Competitive Alternatives 2014 ranked Canada ahead of most major industrialized countries in a comparison of R&D costs, citing a Canadian cost advantage of close to 15.8% over the U.S.

Our R&D tax incentive program is available to qualified businesses of any size and applies to a range of eligible costs that is broader than in the U.S. and many other countries. There is no cap on the program and tax credits can be carried back for three years or forward for 20 years.

More costs qualify for R&D tax incentives
Incentives Ontario United States
Wages and salaries
Capital equipment  
Materials
Overhead  
Contract expenses 65% - 75%
Source: Canada Revenue Agency and U.S. Internal Revenue Service

Select the best description of your operation to see possible after-tax savings you could achieve in 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 deduction:4
(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 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 deduction:6
(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 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 deduction:6
(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.

Download PDF of Ontario's R&D Tax Program (PDF - 1.57 MB) [requires Adobe Acrobat Reader®]


What other incentives are available?

You can also leverage incentive programs and services to help you lower the costs of training your employees. Programs include:

  • the Apprenticeship Training Tax Credit, which offers you up to $40,000 in tax credits per apprentice, and
  • the Co-operative Education Tax Credit program, which generates a tax credit up to $3,000 per student placement.

 

Learn more about Ontario's incentive programs and services. Contact us to find out which programs best meet your business needs.

 

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