Prince Edward Island has a business development policy that’s directed at luring high-tech firms in the bioscience, marine technology, aerospace and defence industries into setting up businesses there. The province recognizes the aerospace sector as playing a vital role in its economic health and hopes to have more companies in this industry discover what it has to offer. It accomplishes this by offering tax credits, rebates, and other incentives. Many of these companies are small startups that are not large enough to have a full-scale accounting department and are likely to seek the services from a local accounting professional. Being able to explain these incentives is key to expanding your business and attracting this growing group of potential clients.
Price Edward Island Tax Rebate for Aerospace-Related Firms
Among the many incentives for aerospace-related companies to relocate to Prince Edward Island is a tax rebate program that began in 1992 as a 20-year experiment that has been extended through 2024. There are two components to the aerospace tax credit:
- A full rebate on the entire corporate income taxes paid by the company for the year
- A full rebate on the real property taxes paid by the company for the ownership or rental of Prince Edward Island property for the year
To qualify for the Prince Edward Island aerospace industry tax rebates, the company must be engaged in the aerospace and defence sector as defined by Prince Edward Island, and must be a new or existing aerospace or defence firm. In addition to companies directly engaged in the aerospace industry, other companies that support the industry also qualify for this rebate. These companies include:
- Original equipment manufacturers
- Strip and paint shops
- Repair and overhaul operations
- Training and various aviation support businesses
The aerospace tax rebate has been an unqualified success, and over 900 people are employed in the aerospace and defence industries in Prince Edward Island as of 2018. The rebate has been so successful that the province voted in 2015 to extend the credit for the Advanced Marine Technology industry. Helping your clients complete the application and gather the required paperwork to submit for the rebate can go a long way toward building a long-term relationship and obtaining additional business through referrals.
In addition to the generous tax rebates, aerospace companies have several other reasons to relocate to Prince Edward Island. It offers a stable economy, skilled labour pool, easy access to major international markets, and a government that understands how to attract businesses. It also offers the physical infrastructure necessary to lure aerospace entrepreneurs.
Slemon Park is a 1,500-acre office park outside of Summerside that houses a residential community and recreational facilities, as well as hangars ranging in size from 25,000 to 300,000 square feet and an airport with two runways. The park also offers a hotel, conference center, restaurant, and plenty of lots available for lease to aerospace companies. The park has no scheduled commercial traffic and provides readily available air space for training exercises, testing, and commercial shipping. Low landing and facility fees make the airport even more affordable and attractive to new aerospace companies.
The province also offers commercial passenger and freight air travel through Charlotteville Airport, located just north of the provincial capital. Carriers serving the airport include AirCanada and WestJet.
Prince Edward Island offers lots of opportunities for your clients in the aerospace industry. Being able to explain these rebates and incentives to your clients is an important part of your role as their accountant.