Finance Canada
Glossary of Frequently-Used Terms


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harmonized sales tax (HST) (taxe de vente harmonisée (TVH)).

A single harmonized value-added tax that replaced the provincial retail sales taxes and the federal goods and services tax (GST) in Nova Scotia, New Brunswick, and Newfoundland and Labrador. It is applied at a single rate of 15 per cent on the same basis as the GST. For more information, visit the Canada Customs and Revenue Agency Goods and Services Tax (GST) and Harmonized Sales Tax (HST) Web page.

hedge (opération de couverture).

A transaction intended to reduce the risk of loss from price fluctuations.

holding company (société de portefeuille).

A company that has control over other companies through ownership of a sufficient proportion of those companies' common stock.

income (revenu).

The money and other benefits flowing to individuals, firms and other groups. For the purposes of the personal income tax, income is specifically defined to exclude certain types of income, such as an amount received from a life insurance policy following someone's death. Income includes wages, interest, dividends, realized capital gains, private and public pension payments, rents, royalties, net business income and self-employment income. For more information, visit the Canada Customs and Revenue Agency Web site.
See also family income; investment income; net income; personal income; savings rate; taxable income; total income.

income testing (critère de revenu).

Income-testing occurs when the level of a benefit is based on the recipient's income level. As net income rises, income-tested benefits, such as the age credit, decrease. For example, if net income rises from $29,000 to $30,000, the amount of the age credit received will be lower by about $105.

Industrial Research Assistance Program (IRAP) (Programme d'aide à la recherche industrielle (PARI)).

IRAP promotes the diffusion of technology and is a valuable national program for small businesses. For more information, visit the National Research Council of Canada IRAP Web page.

inflation (inflation).

The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period of time, resulting in a decline in a currency's purchasing power. Inflation is usually measured as a percentage increase in the consumer price index (CPI). Canada's inflation target, as set out by the federal government and the Bank of Canada, aims to keep inflation within a range of 1 to 3 per cent. If the rate of inflation is 10 per cent a year, $100 worth of purchases last year will, on average, cost $110 this year. At the same inflation rate, those purchases will cost $121 next year, and so on. For more information, visit the Bank of Canada's Inflation Calculator or Statistics Canada's Consumer Price Index Web page.
See also deflation.

information economy (économie de l'information).

A knowledge-based economy dominated by knowledge-based industries such as computers, pharmaceuticals and consulting services.

input tax credit (crédit de taxe sur intrants).

The input tax credit mechanism under the goods and services tax (GST) effectively provides a refund to registered businesses of all GST paid on inputs involved in the production and sale of taxable goods and services. In this manner, the input tax credit minimizes the amount of indirect tax embedded in the price of Canadian-produced goods and services, making them more competitive internationally and in the domestic market.

instruments (instruments).

Government tax and regulatory powers used to influence market behaviour.

insurance company (société d'assurances).

interest (intérêt).

The cost of borrowed money – the price that lenders charge borrowers for the use of the lender's money. Interest is paid on deposits because they are, in effect, loans to the bank or other deposit-taking institution.
See also compound interest.

interest rate or nominal interest rate (taux d'intérêt ou taux d'intérêt nominal).

The interest payable on a debt expressed as a percentage of the debt over a period of time (usually a year). If a loan's interest rate is 8 per cent annually you pay $8 interest each year for every $100 borrowed.
See also long-term interest rate; real interest rate; short-term interest rate.

International Association of Insurance Supervisors (IAIS) (Association internationale des contrôleurs d'assurance (AICA)).

The IAIS is a forum for approximately 90 insurance regulators from over 70 countries. The work of the IAIS parallels the initiatives of the Canadian Council of Insurance Regulators to achieve consensus on general supervisory principles for both domestic and cross-border operations.  For more information, visit the Bank for International Settlements Sponsoring Committees Web page.

International Monetary Fund (IMF) (Fonds monétaire international (FMI)).

An agency of the United Nations established in 1944 along with the World Bank  to promote post-war economic recovery, development and trade principally by helping to ensure a stable system of international exchange. The IMF has evolved since its inception, but remains focused on overseeing the international monetary system, which includes promoting balance of payments stability (e.g. helping to resolve debt problems) and encouraging member governments to implement appropriate macroeconomic and structural policies. For more information visit the International Monetary Fund and the World Bank Web sites.

International Organization of Securities Commissions (IOSCO) Organisation internationale des commissions de valeurs (OICV)).

An association consisting of 134 securities commissions. It aims to foster co-operation among members, promote high standards of securities regulation, facilitate the exchange of information, and encourage the establishment of standards and effective surveillance of international securities transactions. For more information, visit the IOSCO Web site.

investment (investissement).

In its broadest sense, investment consists of putting an asset into a form that is intended to increase its value. In an economic context, however, it refers to spending on capital goods in order to increase output - building a new factory, purchasing new equipment or public spending on infrastructure.  

investment income (revenu de placement).

The income received from investment in securities and property. It includes rent from property, dividends from shares in corporations, and interest from bonds, guaranteed investment certificates, bank accounts, certificates of deposit, Treasury bills, and other financial securities.

investment tax credit (crédit d'impôt à l'investissement).

A tax credit usually calculated as a fixed percentage of qualifying investments in scientific research and experimental development and in certain regions.

joint venture (coentreprise ou société en participation).

A project undertaken by two or more parties to achieve a mutual objective.

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