A Canadian tax credit that reduces the tax owed on dividends received from Canadian corporations, held in a non-registered account — designed to account for the fact that the company already paid corporate tax on that profit before distributing it.
The logic: a company's profit is taxed once at the corporate level before any dividend is paid out. If that dividend were then taxed again at your full personal rate with no adjustment, the same dollar of profit would effectively be taxed twice. The dividend tax credit corrects for that, which is why eligible Canadian dividends are typically taxed at a noticeably lower effective rate than an equivalent amount of interest income or foreign dividend income in a non-registered account.
It only matters in a non-registered (taxable) account — inside a TFSA or RRSP, there's no current-year tax bill either way, so the credit has nothing to offset. It also generally doesn't apply to foreign dividends, which is one reason Canadian and international dividend funds are often held in different types of accounts.