Hi Bubume,
Your friends are keepers sir, they are absolutely correct when they tell you this!
Incorporating yourself is relatively easy, and can be done online. It costs about $300 dollars, and usually the websites can explain the actual process better than I can.
First, decide if you need a name or not, most folks who land "IT" contracts don't need this, and can normally get away with just a numbered corp. But a fancy name always looks and sounds cool, you will have pay extra for this coolness
Second, you need to decide if your going to register your business in Ontario, or Canada... What you decide here can impact you on the tax reporting side.
Third, if your pulling in more than 200K I strongly suggest you hire an accountant.
Now, once your setup there are lots of ways to direct how your money is used in the corp. Long story short, the more money kept in the corp, less taxes are deducted. This is usually accomplished by reporting expenses. Again, depending on complexity, accountants can execute on how to properly structure, you can even expense their cost (I am not an accountant :p).
Example of said "neat" thing? You can put your significant other on your payroll, which counts as income to get their own credit (for whatever scenario).
Does that make sense?