Fiscal Contribution of Immigrant-Owned Corporations and Its Determinants

Understanding the fiscal contributions of immigrants is important for assessing the overall impact of immigration to hosting countries. This chapter examines the fiscal contributions of immigrants from a business perspective. It quantifies and compares net taxes paid (taxes payable minus refunds) by immigrant-owned corporations and corporations owned by Canadian-born individuals. The study finds while immigrant-owned corporations accounted for a small portion of total net taxes paid, their tax contributions increased more than threefold between 2009 and 2020. Controlling for various firm characteristics and immigrant owners’ characteristics at admission, the regression results show that, on average, immigrant-owned corporations were more likely to pay positive net taxes than those corporations without any immigrant owners. Furthermore, among corporations with positive net taxes, immigrant-owned corporations contributed more to taxes payable and received less refunds on a per-capita basis, thus paying more net taxes per employee than corporations without immigrant owners. Immigrant owners’ characteristics at admission also play an important role. Corporations whose immigrant owners were admitted through business class, held a doctoral degree, or had knowledge in both English and French paid highest net taxes per employee among immigrant-owned corporations, underlining the importance of human capital of immigrant owners toward corporations’ fiscal contributions.