Why do business in BC?
Besides being consistently ranked as one of the top places in the world to live, Vancouver, British Columbia is also high on the list of places to do business, recently taking the top spot for business tax competitiveness according to KPMG’s 2010 Competitive Alternatives report.
BC has many competitive advantages, making it an ideal place for doing business. This is based on a talented workforce, government investment, and high quality university R&D and education programs. We are also home to the annual BioPartnering North America conference, which annually attracts almost 1000 delegates from around the world. BC’s life sciences sector benefits from its West Coast location, which puts it in easy reach of life sciences collaborators and sources of venture capital in Washington State and California.
Academics
In 2005, The Scientist magazine ranked the University of British Columbia (UBC) first in Canada, and ninth in North America, for producing high-quality patentable research. In 2006, the Milken Institute ranked UBC eighth in North America for technology transfer and commercialization. The university has spun-off more than 100 life sciences companies, creating more than 2,500 jobs and raising more than $2 billion in private investments.Simon Fraser University (SFU) has generated an additional 70 spin-offs. A biotechnology undergraduate degree is offered jointly by the British Columbia Institute of Technology (BCIT) and UBC, while SFU’s Masters of Technology MBA offers a specialization in biotechnology.
Government Investment
BC's life sciences sector has flourished because of BC government investments in R&D of more than $1.6 billion since 2001. In February of 2008, British Columbia’s life sciences research community again distinguished itself as a true national leader in applied research by securing the largest amount of Federal Government funding (approx. CAD $60 million) to create four new Centres of Excellence for Commercialization and Research (“CECR”s) in BC. The award saw $163 million invested towards establishing 11 new CECRs across Canada. The most awards granted to any province are in British Columbia, with each of the four having received $14.95 million.
The National Science & Engineering Research Council of Canada, one of three Canadian granting councils, has invested more than $6 billion over the last ten years in basic research, training the next generation of scientists, and university-industry partnerships. This investment has directly supported some 23,000 university students and postdoctoral fellows; funded more than 11,000 university professors every year; and helped more than 1,300 Canadian companies to invest in university research and training.
The National Research Council of Canada’s Industrial Research Assistance Program (NRC-IRAP) provides a range of technical and business-oriented advisory services to support growth-oriented Canadian small and medium-sized enterprises. This can include non-repayable contributions to Canadian firms interested in research to develop their services, products and processes. The program has contributed more than $570 million to more than 30,000 projects. In 2007-2008, approximately $13 million was available to firms in BC.
Tax Programs
The BC government provides an additional refundable 10% tax credit against provincial taxes for eligible R&D expenditures for Canadian companies. Foreign companies qualify for the same credit, but it is not refundable. BC is also the first in North America to grant companies a corporate tax refund based on revenue from life sciences patents (75% up to $8 million/year), allowing commercially successful companies to re-invest in research and development at an accelerated pace.
The Federal government is also backing BC’s biopharmaceutical companies. The federal Scientific and Experimental Development Tax Credit Program (SR&ED) provides Canadian companies with refundable tax credits of 35% of eligible R&D expenditures up to $2 million per annum plus 20% of other qualified expenditures. Foreign companies qualify for a 20% credit against taxes payable for eligible expenditures, but credits are non-refundable.
BC’s Small Business Venture Capital Act (SBVCA) provides resident and corporate investors into venture capital funds or eligible small businesses with a tax credit of 30%. Individuals are subject to a maximum refundable credit of $60,000 per annum; corporate credits are not refundable. BC’s International Financial Activity Act (IFAA) allows incorporated Canadian companies with permanent establishments in BC a refund of income tax paid on international income from commercialization of certain life sciences patents. The maximum refund is the lesser of $8 million or 75% of corporate income tax payable. Eligible manufacturers also can receive an exemption from provincial sales tax on production equipment and machinery.
Useful Links:
www.vancouvereconomic.com
www.bcbc.com
www.ifcbc.com
http://www.smallbusinessbc.ca/
http://www.gov.bc.ca/business/
http://www.gov.bc.ca/tted/