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61-219-XWE
Financial and taxation statistics for enterprises
2004


Section II : Corporate income taxes in 2004

The strong economic performance in 2004 generated $45.2 billion in corporate taxes payable to government treasuries, up 13.9% from 2003. The federal portion amounted to $31.1 billion while the provinces claimed $14.1 billion.

The federal government allows a 10% abatement of tax in recognition of the fact that provincial governments impose their own income taxes. The federal tax abatement totalled $13.8 billion in 2004, not quite offsetting provincial income taxes payable.

Taxes payable by the finance and insurance industries dropped 10.5% to $11.4 billion, led by a decline of 28.7% to $5.2 billion in the banking and other depository credit intermediation industry. This decline is primarily due to timing differences related to foreign currency translation adjustments.

Offsetting this decline, corporate taxes payable by the non-financial industries rose 25.5% to $33.8 billion. The increase was attributable mainly to the manufacturing and oil and gas industries.

On the tax relief side the small business deduction rose to $4.7 billion compared to $4.1 billion in 2003, and the manufacturing and processing profits deduction amounted to $1.7 billion, up from $1.5 billion in 2003.

Corporations can accumulate investment tax credits during their loss years and claim them when they are profitable. Investment tax credits (ITC) totalled $2.0 billion in 2004, an increase of 41.8% from 2003.

Other federal tax credits including the general tax reduction, increased by 57.7% to $5.4 billion. The general tax reduction rate was increased to 7% from 5% in 2003.

Text table 2.1
Taxation statistics for enterprises, 2004

                                                       All industries Non-financial Financial
  $ billions % $ billions % $ billions %
Taxable income (tax base) 138.6 100.0 107.5 100.0 31.0 100.0
Tax otherwise payable 54.2 39.1 42.1 39.2 12.1 39.0
Surtax 1.5 1.1 1.2 1.1 0.3 1.1
Total tax payable 55.8 40.3 43.3 40.3 12.4 40.1
Tax credits  
Federal tax abatement 13.8 10.0 10.9 10.1 2.9 9.5
Small business deduction 4.7 3.4 4.4 4.1 0.2 0.8
Manufacturing and processing profits deduction 1.7 1.2 1.6 1.5 s s
Investment tax credit 2.0 1.4 2.0 1.8 s s
Other credits 5.4 3.9 3.2 3.0 2.2 7.0
Total tax credits used 27.5 19.9 22.1 20.6 5.4 17.3
Net part 1 tax payable 28.3 20.4 21.2 19.7 7.1 22.8
Other direct federal taxes 2.9 2.1 2.1 1.9 0.8 2.7
Federal tax payable 31.2 22.5 23.3 21.6 7.9 25.5
Provincial tax payable 14.1 10.2 10.6 9.8 3.5 11.4
Total taxes 45.2 32.6 33.8 31.4 11.4 36.8


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