Canada

Overview

Last reviewed - 23 June 2022

Canada is the largest country in the western hemisphere and one of the largest in the world. Located in the northern part of North America, Canada extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean. It has a stable government, a skilled workforce, and its residents enjoy a high standard of living. The country has a well-developed transportation system and is rich in natural resources. Canada's official languages are English and French, and Ottawa is its federal capital. A parliamentary democracy, the country is divided into ten provinces and three territories. The official currency is the Canadian dollar (CAD).

Canada has a thriving free-market economy, with businesses ranging from small owner-managed enterprises to multinational corporations. Canada's economic development was historically based on the export of agricultural staples, especially grain, and on the production and export of natural resource products, such as minerals, oil and gas, and forest products. However, secondary industry has evolved to the stage where Canada ranks as one of the top manufacturing nations of the world. The service industry has also expanded rapidly and has transformed the Canadian economy from one based primarily on manufacturing to one with a significant service-based sector. Canada is among the world's major trading nations, with the United States (US) its primary trading partner.

Canada has abundant natural resources, a skilled labour force, modern capital plant, and a strong banking system, but the volatility of crude oil prices has taken a considerable toll on the oil and gas sector and the country’s overall economy. A lower Canadian dollar in recent years has encouraged growth in Canada’s manufacturing sector, with higher exports to the United States.

The ratification and entry into force of the United States-Mexico-Canada Agreement (known in Canada as the CUSMA) has created a more stable trading environment for Canadian businesses who export into the US market. However, Canadian exporters to the United States continue to monitor US President Biden's administration to determine how any new policies, including its 'Buy American' policy, will affect their businesses. 

The Canadian economy has generally recovered quickly from its temporary contraction during the COVID-19 pandemic. Interest rates, which were reduced sharply in March 2020, with the intent of limiting the economic fallout created by the pandemic, are once again rising as consumers face historically high inflation rates. Relief package, which were announced and implemented by federal, provincial, and territorial governments to financially support individuals and businesses during multiple pandemic-related public health lock downs, are gradually ending and Canada's employment rate and gross domestic product have recovered to (and surpassed) pre-pandemic levels, signalling positive economic strength in the face of current obstacles like labour shortages and supply chain restrictions.

In Canada, PwC has more than 7,300 partners and staff in locations from St. John's on the Atlantic coast to Vancouver on the Pacific. With more than 110 years of excellence in Canada, we provide industry-focused professional services, including audit and assurance, tax, deals, and consulting targeting solutions for cybersecurity, privacy, financial crime, workforce of the future, finance transformation, value creation, strategic reassessment, and cost optimisation. PwC in Canada works with companies of all sizes and in all industries to help tailor solutions using local knowledge and global experience. We work as one firm to provide quality services and products that help solve important problems.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

Federal CIT: 15%. Provincial and territorial CITs range from 8% to 16% and are not deductible for federal CIT purposes.

Corporate income tax (CIT) due dates
CIT return due date

Six months after the company's taxation year end.

CIT final payment due date

Generally, two months after the company's taxation year end.

CIT estimated payment due dates

Tax instalments are generally due on the last day of each month.

Personal income tax (PIT) rates
Headline PIT rate (%)

Federal top rate: 33%.

Provincial/territorial top rates range from 11.5% to 21.8%.

Personal income tax (PIT) due dates
PIT return due date

30 April (15 June for self-employed individuals)

PIT final payment due date

30 April

PIT estimated payment due dates

If applicable, 15 March, 15 June, 15 September, and 15 December.

Value-added tax (VAT) rates
Standard VAT rate (%)

Combined federal and provincial/territorial sales taxes range from 5% to 15%.

Withholding tax (WHT) rates
WHT rates (%) (Dividends/Interest/Royalties)

Resident: NA;

Non-resident: 25 / 25 / 25, may be reduced by treaty and to 0% for most interest paid to arm's-length non-residents.

Capital gains tax (CGT) rates
Headline corporate capital gains tax rate (%)

Half of a capital gain constitutes a taxable capital gain, which is included in the corporation's income and taxed at ordinary rates.

Headline individual capital gains tax rate (%)

Half of a capital gain constitutes a taxable capital gain, which is included in the individual's income and taxed at ordinary rates.

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Headline inheritance tax rate (%)

NA

Headline gift tax rate (%)

NA

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.