Statistics Canada
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Corporate taxes and tax credits
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Big money-makers are also big taxpayers. Corporations generated $46.5 billion in tax payable to all levels of government in 2005. The lion’s share is owed to the federal government, which assessed $31.5 billion in corporate taxes in 2005; provincial governments assessed $15.0 billion.
Like individuals, corporations use tax credits to reduce their taxable income and thus their taxes. For example, the total income tax payable by corporations in 2005 was $57.4 billion. But a federal tax credit for the income taxes corporations pay to provincial governments reduced that by $14.1 billion.
Another tax credit, the specific tax deduction that small businesses claim, was worth $5.3 billion in 2005, up from $4.7 billion in 2004. A deduction for manufacturing and processing profits was worth $1.4 billion, down from $1.7 billion in 2004.
Investment tax credits help corporations lower their tax burden when they post a loss. These accumulated credits are then paid as taxes when the company returns to profitability. Corporations claimed $1.6 billion of these credits in 2005, down from $2.0 billion the previous year.
Non-financial industries paid taxes of $35.5 billion, up $1.2 billion from 2004. More than half of this 3% increase came from the construction and real estate industries, which saw significant growth in 2005.
As the economy has grown, so too have government treasuries. The consolidated revenue from corporate taxes paid to all levels of government more than doubled from 1995 to 2005.
