Life Sciences Sector
Toronto is home to North America's largest life science sector, with over 50% of Canada's life sciences companies located in the Toronto region. In addition, The City has been ranked as one of the world's top 10 life science centres. An important component of the sector is its research engine, The Toronto Discovery District is a 1.5 mi2 research park comprised of 7 million ft2 of facilities dedicated to research, innovation and commercialization. It is no surprise that Canada's $78.3 billion bio-based economy is primarily located in Toronto.
Firms choosing to do research and development (R&D) in the Toronto region benefit from an average cost advantage over the US of 12.9%. Toronto's life science cluster is comprised of institutions and businesses from pharmaceutical, medical research, biotechnology, medical devices, medical surgical supply and medical assistive technologies industries.
- There are more biotech companies per capita in Canada than any other country in the world.
- Federal and provincial government grants and public sector incentive programs can reduce R&D costs by up to 60%.
- Public funding for medical research has increased to over $2 million per day.
- Toronto has access to concentrated patient populations for clinical studies.
- Canada has a more open approach to stem cell research than the U.S.
- Toronto is home to innovative and ground breaking researchers.
Research in the Toronto Region
The Toronto region's growing reputation for excellence in life science research has attracted major private and public R&D investment, including $1 billion from pharmaceutical companies for advanced drug development and $347 million over five years from the Government of Ontario for the Ontario Institute for Cancer Research (OICR). Scientists from across the province will come together at the OICR to develop a cancer-fighting strategy that begins with prevention and detection, and carries through to diagnosis and treatment. Projects like the OICR are made possible by the continued support from the provincial government, private enterprises, and talented researchers.
The Discovery District is Canada's largest concentration of research institutes, business incubators, and business support services. The network of 9,000 principal researchers and technicians operate out of 37 research institutes and 9 teaching hospitals. These researchers have a world class reputation for medical and technological breakthroughs in areas such as breast cancer, cardiovascular disease, Alzheimer's, and cystic fibrosis research.
The Discovery District is supported by the physical and intellectual proximity of Canada's financial and business centres. A support system of specialized legal experts, accountants, and venture capital investors are located just down the street. The access to capital and expert advice creates a fully integrated system that guides invention through to commercialization.
The growth of the life science sector has been dramatic in recent years, and all indicators suggest that the rapid pace will only continue. In total, Toronto's biomedical industry has over 700 companies providing jobs for more than 80,000 people. These numbers are expected to grow, as an additional $750 million has been invested towards the development of new infrastructure.
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Major Infrastructure Investments
- The Hospital for Sick Children plans to complete a 21-storey research tower in the Discovery District by 2013. The $400 million building will house their research institute's 2,000 scientists and staff.
- MaRS II is a $500 million capital expansion to MARS, which will double the size of the existing facilities.
- Sunnybrook Health Research Centre is expanding its medical research institute by $200 million.
- Toronto Western Hospital plans to build the $165 million Krembil Discovery Centre. It will be a 9-storey, 325,000 ft2 facility dedicated to research.
- York University received $70 million in funding from the provincial and federal governments for the construction of a new life sciences centre. The 160,000 ft2 building will include classrooms, laboratories, and research space to support increased enrollments in the science and health related disciplines.
- Sanofi Pasteur is undergoing a $100 million expansion of its R&D facilities. Approximately 165,000 ft2 will be added to the company's Connaught Campus -a $200 million expansion to the facility. See related case study for more information.
- The Centre for Addiction and Mental Health (CAMH) is planning a $250 million campus development devoted to research and treatment of central nervous system disorders.
- St. Michael's Hospital has a $20 million plan to expand its research and health education facilities.
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- Toronto is home to 55% of Canada's pharmaceutical companies, making the Toronto region the largest pharmaceutical cluster in the nation.
- Ontario generates $8 billion in pharmaceutical revenue. Canadian pharmaceutical revenues total over $15 billion annually.
- Of the 17,000 pharmaceutical jobs in Canada, 11,000 are based in the Toronto area.
- The pharmaceutical industry re-invests over $1.1 billion annually in R&D in Canada, of which Ontario is the largest recipient, receiving more than $500 million.
- Pharmaceutical companies are significant investors both in academic research and in small biotech companies.
- Pharmaceutical companies have invested more than $1.1 billion in local R&D over the past decade, including:
- Sanofi Pasteur invested $350 million over 10 years for a worldwide Cancer Vaccine Program, anchored at a $25 million corporate research campus located at Sunnybrook and Women's College Health Sciences Centre.
- AstraZeneca invested $250 million over 10 years to facilitate the expansion and the creation of 700 new jobs.
- The Structural Genomics Consortium at the University of Toronto for research on over 350 proteins will be made available to scientists worldwide. This project is funded by a $70 million grant from the Welcome Trust in the UK and support from GlaxoSmithKline.
- Eli Lilly's 65,000 ft2 research facility at Sunnybrook and Women's College Health Sciences Centre has a global mandate to improve the effectiveness of developing drugs for osteoporosis, health disease, cancer, mental health, and infectious diseases.
- Apotex's new $150 million R&D facility will be the largest of its kind in Canada. See related case study for additional information.
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Scientific Research and Experimental Development (SR&ED) Tax Incentive Program
- The first $3 million of current expenditures is refundable up to $1.3 million per year (35% federally and 10% provincially) in Ontario for Canadian-Controlled Private Corporations (CCPC), provided taxable income under $700,000 and taxable capitalization under $50 million.
- For those qualifying CCPCs, there are federal tax credits of 20% on research and expenditures above $3 million, of which 40% of such credits are refundable.
- Non-CCPCs can receive a 20% non-refundable federal credit on current and capital expenditures and a 10% certain refundable credit on the first $3 million, subject to income and capital limits.
- Tax credits are generally processed within 120 days.
- Banks will advance loans based on estimated refundable Scientific Research and Experimental Development (SR&ED).
- An additional 4.5% Ontario non-refundable tax credit on all expenditures proposed for 2009 and later taxable years.
Ontario Business Research Institute (OBRI) Refundable Tax Credit
- Up to $4 million (20% of up to $20 million of pre-clinical research expenditures) of refundable tax credit for pre-clinical work at approved academic institutions in Ontario.
- Available to for-profit companies that have a permanent establishment in Ontario.
- Advance ruling no longer required.
Ontario Innovation Demonstration Fund
- Up to $4 million per company over 2 years provided to select early-stage companies.
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