Canadian Controlled Private Corporation (CCPC)

A Canadian-controlled private corporation, or CCPC, is a Canadian private corporation that meets every condition set out in the Income Tax Act. The Canada Revenue Agency (CRA) gives this definition for tax purposes, and it is the reference point for the term in Canada.

Two features define a CCPC. First, the corporation is not controlled, directly or indirectly, by non-residents, by public corporations, or by certain combinations of them. Second, no class of its shares is listed on a designated stock exchange. A corporation must satisfy all of the conditions, not just some of them. The CRA sets out the definition on its page on types of corporation.

The Income Tax Act conditions for CCPC status

CCPC status is not a label a company chooses. It is a result: a corporation either meets the conditions in the Income Tax Act or it does not. The definition starts from a corporation that is a Canadian private corporation. From there, the Act adds tests about who controls the corporation and about where its shares trade.

Because every condition must be met, a single failed test removes CCPC status. A corporation that is a Canadian private corporation but fails the control test is not a CCPC. The same is true of a corporation that passes the control test but has a class of shares listed on a designated stock exchange.

The control test: non-residents, public corporations and combinations

The control test looks at who controls the corporation, either directly or indirectly. A corporation is not a CCPC if it is controlled by non-residents. It is also not a CCPC if it is controlled by public corporations. The Act extends the same rule to certain combinations of non-residents and public corporations.

The words "directly or indirectly" matter. Control can sit with a parent or another entity higher up an ownership chain, so the test is not limited to the names on the corporation’s own share register. Suppliers with layered ownership, such as holding companies or corporate shareholders, need to look at the whole structure when they assess status.

The designated stock exchange test

The second condition concerns listed shares. No class of the corporation’s shares can be listed on a designated stock exchange. This applies to any class, so a corporation with one listed class fails the test even if its other classes are held privately.

The CRA also keeps an archived page on the topic, Canadian-controlled private corporation, which readers can consult as additional CRA reference material.

What CCPC status means for a supplier bidding on Canadian public contracts

For a supplier, the CCPC definition is a tax-law definition from the Income Tax Act, as published by the CRA. When a solicitation or a buyer refers to CCPC status, the CRA wording above is the definition to work from.

• Check the solicitation document for exactly how any ownership or corporate status requirement is worded, and answer that wording directly.
• Map your ownership and control, including indirect control through holding companies, against the conditions in the definition.
• Confirm whether any class of your shares is listed on a designated stock exchange.
• Have your accountant confirm your status before you represent it in a bid.

Keep corporate records current, so that any statement about your status in a bid can be supported by your ownership and share information.