Canadian companies definitely have an advantage when it comes to research and development tax credits. Canada is rated among the Top G20 countries when it comes to Research and Development. The government encourages Canadian companies to do their research in Canada with tax credits and cash back incentives to remain manufacturing in Canada.
Foreign companies can benefit as well. The benefit to a foreign owned company can be the significant reduction or even elimination of their Canadian taxes owed, with the benefit of retaining the rights to the SR&ED program.
Foreign companies become eligible when they become a subsidiary of a foreign parent and can claim 20% tax credits on qualifying SR&ED activities. Another way to become eligible is to become a Canadian-controlled private corporation (CCPC), as long as an owner owns less than 50% of the company’s shares, so the majority of ownership is Canadian. Becoming a CCPC allows the company to claim 35% cash back on qualifying SR&ED activities.
For more information check out this link: http://investincanada.gc.ca/eng/publications/rd-tax-credit-fact-sheet.aspx