Aerospace Tax Holiday

Prince Edward Island's Aerospace Tax Holiday offers significant tax rebates to aerospace and defence companies establishing operations in the province. The initiative aims to boost the local economy by attracting both new and existing aerospace firms and providing substantial financial incentives.

Prince Edward Island (PEI) has enacted an aggressive strategy to lure aerospace and defence companies to its vibrant economic landscape. The Aerospace Tax Holiday or Tax Rebate Incentive Program serves as a robust financial tool that offers significant tax incentives for eligible aerospace businesses. This program is specially designed to enhance the province's appeal as a premier destination for aerospace ventures. This comprehensive guide will explore the details, benefits, and eligibility criteria of the Aerospace Tax Holiday in Prince Edward Island.

The Aerospace Tax Holiday took effect on January 1, 1993, providing a lucrative 20-year incentive program aimed at aerospace and defence companies. Recognizing the success of this initiative, the program was extended for another ten years in December 2012. The key components of the Tax Rebate Incentive Program include full rebates on corporate income tax and real property tax for eligible companies.

1. Full Rebate of Corporate Income Tax: Eligible aerospace and defence companies receive an annual rebate on all provincial corporate income tax paid. This significant financial relief enables companies to reinvest savings into growing their operations. 2. Full Rebate of Real Property Tax: The annual real property tax attributable to the ownership or rental of facilities in Prince Edward Island is also fully rebated. This includes the extensive facilities available at Slemon Park, a key aerospace hub located outside Summerside. 3. Long-Term Financial Incentives: The program not only offers immediate financial benefits but also guarantees these rebates for an extended period, which aids in long-term planning and financial stability for aerospace firms.

The following eligibility criteria must be met for companies to benefit from the Aerospace Tax Holiday: 1. New Aerospace Firms: New companies looking to establish their operations in Prince Edward Island can apply for these tax rebates. 2. Existing Firms: Aerospace companies already operating in the province are also eligible to take advantage of these incentives. 3. Minimum Employment or Payroll: Companies must have 20 or more employees or maintain a payroll exceeding $700,000. 4. Eligible Activities: The eligible companies must be engaged in activities that categorize them as part of the "Aerospace and Defence" sector according to the province’s definitions. This encompasses a wide range of businesses, including original equipment manufacturers, repair and overhaul operations, strip and paint shops, training centers, and various aviation support businesses.

Slemon Park is a key asset in the Aerospace Tax Holiday initiative, offering: 1. Extensive Facilities: Covering 1,500 acres, Slemon Park includes an airport with two runways and multiple well-maintained hangars, ranging from 25,000 to 300,000 square feet. 2. Comprehensive Amenities: An on-site residential community, a full range of recreational facilities, a hotel, and a restaurant contribute to a holistic living and working environment. 3. Strategic Location: Situated just outside Summerside, Slemon Park offers logistical advantages and a supportive business ecosystem conducive to the aerospace industry.

1. Wealth Generation: The Aerospace Tax Holiday aims to strengthen the aerospace sector, which is a vital wealth generator for Prince Edward Island. With approximately 900 employees already in the sector, the program fosters job creation and economic growth. 2. Innovation and Skills Development: By attracting a wide range of aerospace and defence companies, the province also fosters innovation and skills development in advanced manufacturing and aviation technologies. 3. Economic Diversification: The program aids in diversifying the economic base of Prince Edward Island, reducing dependence on traditional sectors and enhancing resilience against economic fluctuations.

Applying for the Aerospace Tax Holiday involves a structured process: 1. Application Submission: Interested companies must submit their applications, detailing their operations, workforce, and eligibility criteria. 2. Review and Approval: The provincial authorities will review the applications to ensure that they meet all eligibility conditions. Successful applicants will be notified and can begin claiming their tax rebates. 3. Annual Renewals: Eligible companies must follow annual reporting and renewal processes to continue availing the rebates. This involves submitting relevant financial documents and proof of ongoing operations in the aerospace and defence sector.

Prince Edward Island’s Aerospace Tax Holiday is a transformative initiative that significantly enhances the province's attractiveness to aerospace and defence companies. Through generous tax rebates and long-term financial incentives, the program aims to create a thriving aerospace hub in Slemon Park and beyond. By understanding the benefits and diligently navigating the application process, eligible companies can position themselves for sustained growth and success in Prince Edward Island’s vibrant aerospace sector. In summary, the Aerospace Tax Holiday stands as a testament to Prince Edward Island’s commitment to economic development and innovation. It presents a golden opportunity for aerospace and defence companies to leverage financial incentives, benefit from world-class facilities, and contribute to the province’s dynamic economy.