INVEST TO SUCCEED. INVEST TORONTO.

INVEST TORONTO

Invest Toronto is your connection to the global business opportunities found in

Toronto. Invest Toronto is responsible for attracting foreign direct investment

into the City of Toronto. We offer one-on-one consultations to businesses and

site selectors making global business investment decisions.

Our Services:

• Complimentary concierge service for businesses

• Answer all questions and enquiries on investment opportunities in Toronto

• Facilitate introductions with sector experts and all three levels of

government

• Provide guidance on site location and selection

• Facilitate business-to-business linkages

• Provide industry and economic benchmarking analysis

• Connect clients to qualified professional service individuals

2

International Companies Choose Toronto

KPMG compared 28 major locations,

including London, Amsterdam and New York

to relocate their Global Resource Centre

(finance, marketing, learning and

development, and IT professionals) based on

four key criteria:

•Business Environment

•Social and Physical Environment

•Availability of Space

•Accessibility to Infrastructure

Chinese Investment Corporation

Chose Toronto

KPMG’s Global Resource Centre

Chose Toronto

The China Investment Corporation (CIC)

opened an office in Toronto, which serves

as its main centre for North American

investments. CIC chose Toronto for its

foreign office over New York and London

based on four factors:

•Proximity to New York and London

•Business Friendly Environment

•Economic Stability and Resilience

•Peer Companies in Financial

Services

3

Toronto is a Global Centre for ICT

4

Toronto: A Prime Location with Proximity to the U.S.

• Toronto businesses

have access to a

market of 461 million

consumers with a

combined GDP of

about US$17.9 trillion

• 120 million people

within a 500 mile

radius of Toronto

• Located within 90

minutes of New York,

Chicago, Boston and

Washington

5

Toronto: Strong and Resilient Economy

• Soundest banking system in the world - 4 years in a row (World Economic Forum, 2008-2012)

• During the financial crisis, no Canadian bank or insurer failed and none required bailouts (Government of Canada, 2012)

• Since mid-2009, Canada has posted the fastest employment growth in the G7, recouping all of the jobs lost during

the recession (Government of Canada, 2012)

Dun & Bradstreet’s Global Risk Indicator

Ranked Canada 2nd

“Citigroup economists forecast

that by 2014, Canada will be one

of few countries to retain its AAA

credit rating.” Financial Post (2012)

6

Toronto Has It All: Low Business Costs

2012 Cost Comparison, Toronto vs. International Peer Cities

Global North America

Cost Index

US average = 100.0 Source: KPMG Competitive Alternatives, 2012

(based upon 10 year average of total annual operating costs for 19 operations)

7

103.4

101.2

100.9

99.4

99.3

96.5

96.5

96.2

95.7

94.3

New York

Boston

Los Angeles

Philadelphia

Chicago

Dallas-Fort…

Vancouver

Atlanta

Toronto

Montreal

112.3

105.0

103.4

98.1

98.1

98.0

97.9

97.9

95.7

94.7

Tokyo

Sydney

New York

London

Paris

Berlin

Rome

Milan

Toronto

Amsterdam

Toronto Has It All: Competitive Business Taxes

• The General Federal/Ontario

corporate tax rate is 26.5% -

below the level of most G7

countries

• The Federal/Ontario corporate

tax rate on Manufacturing &

Processing is 25%

• The Federal/Ontario small

business tax rate is 15.5%

* Ohio and Texas have gross receipts-style business taxes.

Source: Tax Foundation - State Corporate Income Tax Rates, 2012 & Tax

Watch, Spring 2012.

Canada and Ontario governments are committed to competitive tax rates.

The combined Income Tax rate of 26.5% is approximately 13 percentage points lower than the U.S.

35

35

35

35

35

35

35

35

35

15

9.99

9.5

8.84

8.5

7.9

7.1

6.0

11.5

Pennsylvania

Illnois

California

Indiana

Wisconsin

New York

Michigan*

Texas*

Ohio*

Ontario

Competitive Corporate Income Tax Rates, Ontario vs. Selected US States, 2012

Federal Provincial/State

26.5%

35%

35%

41%

42.1%

42.9%

43.5%

44.5%

45%

43.5%

8

An Established ICT Sector

• Toronto’s ICT sector generates $52.2 billion in

revenues annually

• 35 % of the top 250 firms in Canada’s ICT industry

are based in Toronto.

• 11,500+ firms make up Toronto’s ICT sector

• Toronto is Canada’s leading tech center, with more

than 175,000 employees

• The sector has high levels of educational attainment:

96.9% of employees have a post-secondary

certificate, diploma or degree

Source: Toronto Region Research Alliance, 2011

17%

5%

6%

11%

10% 10%

12%

29%

Estimated distribution of employees by ICT Firm Size

1 to 4

5 to 9

10 to 19

20 to 49

50 to 99

100 to 199

200 to 499

500+

World Class ICT Trained and Educated Workforce

• The ICT sector has a young workforce – 36.4% of ICT workers are under 35 years of age and

61.5% of the ICT workforce is under 45 years of age.

• 50.2% of the ICT workforce is in the prime management age group (35 to 54 years of age).

• The sector has high levels of educational attainment: 96.9% of employees have a post-

secondary certificate, diploma or degree, compared with 88.9% for the general labour force.

• The labour force is internationally minded, with business and personal linkages to nearly every

country of the world.

• In August, 2012 the Massachusetts Institute of Technology (MIT) recognized two Torontonians on

their list of top 35 tech innovators under 35.

• Hossein Rahnama of Ryerson University and Joyce Poon of the University of Toronto – are

recognized for their individual achievements in taking on important problems in transformative

ways

Over 60,600 Students Graduate Annually from Toronto

Based Post-secondary Institutions

• Toronto is home to 4 prominent universities. The largest three, University of Toronto, York University and Ryerson University offer a total of 21 ICT-related programs. The Ontario College of Art & Design University also offers an extensive curriculum of design and digital media programs.

• The Toronto Area is home to six colleges that offer ICT-related programs. Seneca College, Humber College, Centennial College, Sheridan College, Durham College and George Brown College offer a combined 40 programs that prepare students for careers in the ICT industry.

• Ubisoft Toronto established a research partnership with Sheridan College’s Screen Industries and Research Training Centre (SIRT) to encourage and facilitate knowledge sharing

59,286

40,941

19,817

2,947

18,419 16,183

13,803

8,917

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

University ofToronto

York University RyersonUniversity

OCAD University Humber College Seneca College George BrownCollege

CentennialCollege

Enrolment by City of Toronto Post-Secondary Institutions, 2010

Toronto’s ICT job market is the second hottest in North

America

Top 12 Cities to Find an IT Job in 2012

1) Houston, TX

2) Toronto, ON 3) Orlando, FL

4) San Francisco, CA

5) Minneapolis, MN

6) McLean, VA

7) Walnut Creek, CA

8) Detroit, MI

9) Jacksonville, FL

10) New York, NY

11) Denver, CO

12) Boston, MA

Source: ITBusiness.ca (2012)

Excellent ICT Infrastructure

• Highest wireless infrastructure support per capita in

North America

• 90% of the Toronto region has access to broadband

technology

• Downtown office space with 1 gigabyte symmetrical fibre

infrastructure

• The carrier-neutral data centre in downtown Toronto

houses the largest amount of fibre in Canada, and 2ND

largest in North America

• The continent’s highest percentage of wire-line

telecommunications converted to fiber optic cable

• Reliable and cost effective infrastructure to maximize

profit and minimize risk through consistency and rare

downtime; safe and stable supplier of electricity and gas

• Canada ranks 7 out of 133 countries in the Networked

Readiness Index 2009-2010

Source: OneSource, includes all ICT companies in Toronto CMA

45%

3%

49%

3%

ICT Sector Breakdown by Revenue

Manufacturing

Wholesaling

Communications

Software & Services

Digital Media: Toronto is leading the way

• There is an intersection of both tech and art that is taking place in Toronto at the upper

educational level that is helping to drive the digital media wave in Toronto

• The Toronto Area boasts over 800 New Media firms, with approximately 60% located within the

City of Toronto

• Digital Media is a $1.5 billion dollar industry in Ontario

• Supporting Ontario’s dynamic digital media sector is a key priority of the Ontario Media

Development Corporation, which funds digital content and capacity throughout the province

“Totally Amp’d is the first app of

its kind for the underserved

tween mobile entertainment

market. The project was

supported by OMDC’s Ontario

Interactive Digital Media Tax

Credit”

Incubating the Digital Media Sector

Ryerson’s Digital Media Zone (DMZ) http://digitalmediazone.ryerson.ca/ is designed for young entrepreneurs It’s a space where students and alumni come to innovate, collaborate and market their products and services, and where commercial enterprises can turn to for progressive and creative digital solutions OCAD University Mobile Experience Innovation Centre (MEIC) http://research.ocadu.ca/meic/home is a not-for-profit association that supports design leadership, experience innovation and applied research in Canada's mobile and wireless industries. MaRS Incubator http://www.marsdd.com/facilities/office-facilities/incubator/ is a not-for-profit corporation that works closely with entrepreneurs to help turn their science and technology innovations into viable early stage businesses. It's not just a concept, it's also a physical space, a cluster of buildings housing research labs, offices, venture capital firms, incubator facilities, and community organizations to support them. JOLT http://marscommons.marsdd.com/how-we-help/jolti Is a technology accelerator dedicated to building high-growth web and mobile companies The four-month program works closely with entrepreneurs from initial product launch through the next stage of company development and fundraising. George Brown College Digital Media and Gaming Incubator http://www.gaminginc.ca/ supports the city’s digital sectors by providing affordable space, business and professional services, technology and human resources. The incubator shares space with the School of Design’s digital programs, occupying 2000 square feet in a 26,000 square foot facility. Seneca College Centre for Development of Open Technology http://cdot.senecac.on.ca/ provides a physical and virtual environment for the development and research of open source software through collaboration with Seneca, the open source community, business, and other institutions.

Supporting the Growth of Emerging Technologies

The Ontario Emerging Technologies Fund (OETF or the Fund) is a direct co-investment fund

established by the Province of Ontario in 2009. The $250 million fund co-invests alongside

qualified investors into innovative, high-growth, private, Ontario companies.

OETF is designed to respond to the challenges faced in raising capital by innovative, private,

Ontario-based companies in the clean technology, life sciences and advanced health

technologies, and digital media and information and communications technology sectors.

Qualified Investors Include

• Celtic House Venture Partner

• JLA Ventures

• Summerhill Venture Partners

• Vertex Venture Capital

• BlackBerry Partners Fund

Source: http://www.ocgc.gov.on.ca/site/en/

Digital Related Education Programs

PROGRAM TYPE

NUMBER OF

PROGRAMS ~ ENROLLMENT Game 14 712

Animation 22 1,083

Graphic Design 14 2,118

Media Inc. Film 29 2,792

Other 4 432

Software Engineering (College) 6 216

Computer Science (University) 43 7,843

Computer Engineering (College) 6 1,049

Computer Engineering (University) 10 715

Computer Programming (College) 26 1,460

Grand Total 174 18,420

Source: Ontario Technology Corridor. 2011

Competitive Cost Location for Software Development

• Toronto offers among the lowest annual

location cost’s among selected peer

regions

• The index number expresses the total

operating costs, including taxes, for

each city in percentage terms relative to

the baseline of United States = 100.0

Source: KPMG CompetitiveAlternatives.com

Cost Model, 2012, accessed on August 21st, 2012

Supportive Government Incentives

Scientific Research And Experimental Development (SR&ED) | Canada Revenue Agency

http://www.cra-arc.gc.ca/sred/

Largest Source Of Federal Funding For Incentives

Widely recognized as one of the most generous R&D incentive programs in the world, claimants can apply for

SR&ED investment tax credits (ITC) of 20% of qualified expenditures such as wages, materials, machinery, equipment and some overhead.

Ontario R&D Tax Credit (ORDTC) | Ontario Ministry of Revenue

http://www.rev.gov.on.ca/en/credit/ordtc/index.html

Provincial Top-Up for Revenue Positive Ontario SMEs

Provides a 4.5% tax credit based on eligible SR&ED expenses carried out in Ontario. The credit may be used to reduce corporate income

tax payable. Any unused credit may be carried back 3 years or carried forward 20 years

Ontario Innovation Tax Credit (OITC) | Ontario Ministry of Revenue

http://www.rev.gov.on.ca/en/credit/oitc/index.html

Provincial Top-Up Available for Ontario SMEs

Ontario SMEs are eligible for an additional 10% tax credit where qualifying SR&ED has been performed in

Ontario. The OITC can include 100% of current expenses and 40% of capital expenses up to a maximum of

$300,000.

Ontario Business Research Institute Tax Credit (OBRITC)

http://www.rev.gov.on.ca/en/credit/ordtc/index.html

Ontario Ministry of Revenue

Tax Credits for Working with Universities and Colleges. OBRITC provides a 20% credit for SR&ED expenses incurred in Ontario under an

eligible contract with an Eligible Research Institute (ERI) i.e. universities or colleges. Qualifying expenditures are capped at $20 million

annually. The maximum annual credit is $4 million.

Ontario Interactive Digital Media Tax Credit (OIDMTC)

http://www.cra-arc.gc.ca/sred/

Ontario Media Development Corporation

A refundable tax credit of up to 40% based on eligible Ontario labour expenditures and eligible marketing and distribution expenses claimed

by a qualifying corporation in the creation of interactive digital media products in Ontario.

Federally

• 25% of a federal corporation’s board of

directors are required to be Canadian

residents.

• Federal corporation requires greater disclosure

and filing requirements.

• Federal corporations can headquarter in any

Canadian province.

Provincially

• To operate in Ontario, corporations must

either be registered federally or provincially in

Ontario.

• Professional corporations are only available

at the provincial level.

• Ontario corporations require 25% of their

directors to be Canadian residents.

Incorporating a Business in Toronto

Branch office

• A branch is an extension of its non-

Canadian parent corporation

• A subsidiary, a federally or

provincially incorporated business,

is a separate legal entity from its

parent.

• The key distinction between a

branch and a subsidiary is that a

branch is not a separate legal

entity; the non-Canadian

corporation is subject to liabilities

incurred by the branch in Canada.

Additionally, the benefits of

incorporating federally or

provincially do not apply to a

branch office.

Incorporation (Subsidiary)

20

Business Visas/Immigration

Temporary

Intra-Company Transfer

• Permits international companies to temporarily transfer qualified employees to Canada

• Once the business is functional, the employee can apply for Permanent Residency as either a

Skilled Worker/Professional or a Provincial Nominee

Foreign Worker Process

• A positive Labour Market Opinion (LMO) is generally required to hire a temporary foreign worker if an

Intra-company Transfer was not obtained. Employees must be paid at equivalent Canadian rates

Over the last 5 years, Toronto

received an average of 85,000

new immigrants per year (Citizenship and Immigration Canada, RDM, Preliminary 2011 Data)

Permanent

Provincial Nominee Program

• Employer-driven program applicable to both new

investments and expansions to current operations

Skilled Workers and Professionals

• Applicants must have an offer of permanent, full-time

employment

21

CONTACT

Nikki Holland

Vice President, Public Affairs

Office: 416-981-3890

Cellphone: 647-285-4273

nholland@investtoronto.ca

www.twitter.com/invest_toronto

www.investtoronto.wordpress.com