Canada's largest centre of life sciences activity

Operate among innovation leaders engaged in every kind of life sciences activity. Ontario's broad and innovative life sciences sector includes about 1,900 firms.

A premier life sciences centre

Ontario ranks sixth in North America by the number of life sciences establishments and by employment. We are home to a remarkable cluster of top-ranked institutions, researchers, developers and manufacturers.

Multinational companies include:

Agfa Healthcare, Amgen, AstraZeneca, Baxter, GE Healthcare, GlaxoSmithKline, Hoffman-La Roche, Johnson and Johnson, Medtronic, Philips Healthcare, Pfizer, Sanofi

Homegrown companies include:

Apotex, Telesta Therapeutics (formerly Bioniche), Biovail (now Valeant), Connaught Laboratories (now Sanofi Pasteur), Nordion, Novopharm (now Teva), Nucro Technics, Patheon, Plantform, Therapure Biopharma, Trudell Medical, Xagenic

How 100 years in Ontario shaped Sanofi Pasteur's successful history

The world's largest producer of human vaccines discovered the ideal environment for innovation in Ontario. Innovation is the lifeblood of life sciences organizations. But taking great ideas from bench to market requires the right talent, support from private and public partners, and a competitive intellectual property regime.

There is a growing life sciences cluster here, in Ontario, and it's developing rapidly. I like to refer to it as an ecosystem. There are large companies like ourselves, universities and research institutions, skilled labour, small companies - all of this coming together.

- Mark Lievonen, Canada Country Chair, General Manager, Sanofi Pasteur

 

A critical mass of life sciences talent

You need a dependable source of highly skilled innovation talent to grow and compete. We have the talent you need.

Great talent from great institutions

  • Six of Ontario's universities have associated medical schools, including the University of Toronto, one of North America's largest medical faculties.
  • Our 44 universities and colleges produce more than 39,500 skilled graduates in science, technology, engineering and mathematics (STEM) each year.

Why Roche chose Ontario

Exceptional talent drives success in the highly competitive life sciences market, but it's not always easy to find the scientific and business talent you need to innovate, commercialize and succeed on a global scale. Hoffman-La Roche kept this in mind as it was choosing a site for a global pharmaceutical development centre. In addition to a talent pool of over 61,500 life sciences workers, Ontario boasts a high concentration of business specialists with over 43,000 students graduated from business related programs in 2013.

Two of the top 10 international business schools are in Ontario.

I think the biggest asset Ontario provides to companies like us is its deep talent pool. We have been very impressed with the quality of the people we have hired locally for the site and I think this reflects the fact that the province does wonderful research. It produces great scientists, and sometimes you need to look locally before you look globally

- Ronnie Miller, President & CEO, Roche Canada

 

$14 billion in R&D spending a year

Four of the top ten Canadian research hospitals can be found in Ontario, attracting over $2.6 billion in sponsored research income.

A history of innovation fuelling tomorrow's discoveries

Ontario is a place where today's innovative ideas are fast becoming tomorrow's world-renowned scientific, medical and technological breakthroughs, with the potential to improve millions of lives globally.

  • Did you know that Ontario is home to the following major medical breakthroughs and innovations?
    • blood-forming stem cells
    • cancer stem cells in leukemia
    • discovery of the neuroleptic receptor
    • early-onset Alzheimer's disease
    • external cardiac pacemaker
    • identification of genes for cystic fibrosis
    • insulin
  • Our excellence in life sciences is nurtured by public and private investments and forged through collaborative partnerships. Together, there is truly no limit to where innovation can take us.

Snapshot: Ontario R&D

  • $14 billion in R&D is performed each year by businesses, universities and colleges, private non-profit organizations, governments, and foreign firms.
  • About 51% of Canadian life sciences R&D spending occurs in Ontario.
  • Ontario's 24 academic research hospitals have invested as much as $1.4 billion in R&D and employ 16,400 researchers and research staff across the province.
  • The world's top ten global pharmaceutical companies (by revenue) conduct clinical trials in Ontario.
  • Canadian industry patents are cited in other patents about 20% more than the world average.

Key research activities

Ontario has pockets of excellence in science originating from academic institutions in areas such as

Key research activities - Genomics (personalized & regenerative medicine)
Genomics (personalized and regenerative medicine)
Key research activities - Neuroscience
Neuroscience
Key research activities - Oncology
Oncology
Key research activities - Cardiovascular disease
Cardiovascular disease
Key research activities - Clinical trials
Clinical trials

World renowned research and academic institutions

  • Ontario is a biomedical research powerhouse, with specialized academic and research centres across the province conducting investigations into virtually every area of life sciences.
  • Over 1 million square feet and over $1 billion in new research facilities have been built since 2005.

 

 

Programs and incentives for growth

Ontario's R&D tax credits are the most generous among the OECD countries. Combined with federal R&D programs, Ontario's R&D Tax Program can reduce your after-tax cost of every $100 in R&D spending to between $61 and $37.

Tax incentives

  • Ontario's R&D tax credits are the most generous among the OECD countries. Combined with federal R&D programs, Ontario's R&D Tax Program can reduce your after-tax cost of every $100 in R&D spending to between $61 and $37.
  • A broader range of costs qualify for deductions than in many jurisdictions, and tax credits can be carried back for three years or forward for 20 years.
  • Companies that earn federal Scientific Research and Experimental Development Tax Incentive credits in Ontario are also eligible for a 4.5% non-refundable Ontario Research and Development Tax Credit.
  • A 20% refundable Ontario Business Research Institute Tax Credit (up to $4 million annually) for contract R&D performed at eligible research institutes in Ontario such as universities or community colleges, hospital research institutes, Ontario Centres of Excellence or non-profit organizations.
  • For small- and medium-sized companies, there is an additional 10% refundable Ontario Innovation Tax Credit worth up to $300,000 annually.
  • The marginal effective tax rate of 16.6% on new capital investment (provincial and federal) is lower than the U.S. and OECD averages.

 

Ontario's R&D cost advantage versus other G7 countries (KPMG, 2016)
Location Cost advantage/disadvantage relative to the US (%)
Ontario 27.8
France 22.4
Italy 21.0
Germany 16.0
Japan 12.8
United Kingdom 11.9
United States Baseline
Source: MEDEI/MRI analysis, prepared using CompetitiveAlternatives.com Cost Model, 2016 version.

 

More costs qualify for R&D tax incentives
  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 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 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 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 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.

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


Federal Programs

 

Lowest business costs in the G7

Canada offers a lower business cost environment for life sciences companies than the U.S., Germany, Italy, Australia or Japan, according to KPMG's Competitive Alternatives 2016.

Save on costs here

  • We keep business costs low. Low costs keep our industry clusters dynamic.
  • According to a comprehensive survey by KPMG, Ontario's costs are the lowest in the G7 for R&D-intensive sectors.
  • The Canadian life sciences industry, more than 50% of which is centred in Ontario, offers the lowest pharmaceutical and medical devices manufacturing and biomedical R&D costs among all G7 countries.
  • Health-care costs for U.S. employers can be double Ontario's health-care costs.

 

Overall business costs index (U.S.=100)
Location Costs index
Ontario 85.6
Italy 89.3
France 90.5
United Kingdom 90.9
Germany 92.3
Japan 92.7
United States 100.0
Source: MEDEI/MRI analysis, prepared using CompetitiveAlternatives.com Cost Model, 2016 Edition.

 

Competitive corporate tax rates

With a total combined provincial and federal (15%) corporate income tax rate of 26.5%, Ontario's combined general federal-provincial CIT rate is lower than the average of G20 countries and lower than the average federal-state CIT rate in the United States.

Plus:

  • Ontario's marginal effective tax rate on new business investment is about 16.6% for 2014
  • Small businesses benefit from a low CIT rate of 4.5%
  • CIT and sales tax administration are streamlined, saving Ontario businesses $635 million annually in compliance costs
Combined Federal-Ontario general corporate income tax (CIT) rate
Regions Percent
Ontario 26.5
G20 Avg 28.2
G7 Avg 31.5
U.S. Avg 39.0
Source: Ontario Ministry of Finance, and KPMG International, 2014

 

Explore Ontario's life sciences clusters

Our life sciences industry is diversified and clustered throughout the province. Use the map to explore clusters and locations of companies focused on advanced health technologies, pharmaceuticals, biotech and medical devices.

 

1,900 life sciences firms and counting

Thrive in a region that's home to everything from promising start-ups to midsize innovators and mature companies.

Some examples

About 1,900 life sciences firms operate in Ontario, from start-ups with just a handful of employees to well-established companies with thousands. Here are some examples:

 

Promising start-ups

  • Toronto-based Alpha Cancer Technologies has more than 20 international patents and recently attracted nearly $3 million in provincial and angel investments.
  • ChipCare, the innovator behind a handheld point-of-care analyzer based on mobile technology, recently attracted one of the largest health-care angel investments in Canada's history, with Phase 2 financing of $2.05 million.
  • Ottawa's eSight Eyewear has developed a pioneering wearable assistive device that helps people with low vision to see.
  • Profound Medical is developing a minimally invasive treatment for prostate cancer based on MRI-guided high-frequency ultrasound therapy that is designed to reduce the collateral damage and side effects associated with current treatments.
  • Rna Diagnostics is developing molecular diagnostic tools to radically improve the management of cancer chemotherapy. Early in 2012 Rna Diagnostics completed a $925,000 equity financing involving a syndicate of four accredited angel groups in Ontario, representing one of the largest angel financing deals in Ontario's med tech history.
  • The potential market for Xagenic's lab-free diagnostic technology is more than $2.5 billion, and the firm has secured more than $30 million over two funding rounds financing from private- and public-sector sources.

 

Midsize innovators

  • Natrix Separations, which is developing and commercializing innovative products for use in vaccines and biopharmaceuticals, is investing $5 million to expand its facility in Burlington.
  • Nucro-technics is Canada's largest privately owned pharmaceutical contract support organization, and for the last 40 years, has been providing a wide range of custom-designed R&D and consulting services to the world's pharmaceutical and biotech community.
  • Pillar5 Pharma, an Ontario pharmaceutical manufacturing firm with about 100 employees, is in the process of expanding its manufacturing facility in Arnprior.
  • Qvella is developing an automated laboratory system for the rapid identification of bacterial species. The Qvella identification platform provides a more accurate and faster diagnosis of bacteria identification while improving workflow and reducing costs for the microbiology lab.
  • Therapure Biopharma recently invested $28 million in an expansion of its facilities in Mississauga.
  • Baylis Medical is a privately owned medical device company specializing in leading-edge interventional cardiology and radiology, and minimally invasive spine technologies.

 

Mature companies

  • GlaxoSmithKline maintains five business offices in Ontario, including its Canadian headquarters and a $120-million state-of-the-art manufacturing and product development facility in Mississauga.
  • Hoffman-La Roche has invested $190 million to establish a new global pharmaceutical development site in Mississauga.
  • Medtronic, whose Canadian headquarters are located in Mississauga, is the global leader in medical technology, alleviating pain, restoring health and extending life for millions of people around the world.
  • Novocol Pharmaceuticals has invested $54 million to expand production and R&D capacity at its Cambridge facility.
  • Patheon has grown from a small operation in Fort Erie, Ontario to 14 facilities in five countries, 7,000 employees and $700 million in revenue (in 2011). The company won the European outsourcing award (EOA) in the category of Most Effective Scale-Up and Technical Transfer award.
  • Sanofi Pasteur is the vaccine division of Sanofi-Aventis Group, one of the world's largest pharmaceutical companies. In 2011, Sanofi Pasteur opened a $101-million vaccine R&D facility in Toronto, with $13.9 million in support from the Government of Ontario. This facility was established as Sanofi Pasteur's North American Centre of Excellence in analytical and bioprocessing R&D.
  • Teva Canada launched a $56-million expansion of its High Potency Manufacturing Centre of Excellence in Stouffville, making the facility one of the most advanced pharmaceutical plants in North America.

 

Industry Subsectors

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