# U.S. SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

# FORM 40-F

|[ ] | REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE  SECURITIES EXCHANGE ACT
OF 1934
|--- | -------------------------------------------------------------------------------------

OR

|[X] | ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE  SECURITIES EXCHANGE ACT
OF 1934
|--- | ----------------------------------------------------------------------------------------

|For
the fiscal year ended:   December 31, 2005 | Commission File Number:  000-31062
|---------------------------------------------- | ----------------------------------

ONCOLYTICS BIOTECH INC. 
(Exact name of
Registrant as specified in its charter)

|                                                             |  |                                                                 
|------------------------------------------------------------ |  | ----------------------------------------------------------------
|Not Applicable                                               |  | Province of Alberta, Canada                                     
|(Translation of Registrantsname into English (ifapplicable) |  | (Province of other jurisdiction ofincorporation or organization)

2834(Primary Standard Industrial Classification Code Number (if applicable))

Suite #210, 1167 Kensington Crescent N.W., Calgary, Alberta, Canada, T2N 1X7(403) 670-7377(Address and telephone number of Registrants principal executive offices)

DL Services, Inc., 1420 Fifth Avenue, Suite 3400, Seattle, Washington 98101(206) 903-8800(Name, address (including zip code) and telephone number (including area code) of agent for service in
the United States)

Securities registered or to be
registered pursuant to Section 12(b) of the Act.

|Title of each classCommon Shares | Name of each exchange on which registeredNASDAQ SmallCap
|-------------------------------- | --------------------------------------------------------

Securities registered or to be
registered pursuant to Section 12(g) of the Act.

None
(Title of Class)

Securities for which there is a
reporting obligation pursuant to Section 15(d) of the Act.

None
(Title of Class)

---

For annual reports, indicated by
check mark the information filed with this Form:

|[X]   Annual information form | [X]   Audited annual financial statements
|----------------------------- | -----------------------------------------

Indicate the number of outstanding
shares of each of the issuers classes of capital or common stock as of the close of
the period covered by the annual report:As at December 31, 2005, 36,236,748 Common Shares without par value were issued and outstanding.

Indicate by check mark whether the
Registrant by filing the information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934 (the Exchange Act). If Yes is marked, indicate the filing
number assigned to the Registrant in connection with such Rule.

||_| Yes: 82- | |X| No
|------------ | ------

Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

||X| Yes | |_| No
|------- | ------

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Explanatory  Note:  Oncolytics
 Biotech Inc. is a Canadian issuer eligible to file our annual report pursuant to Section
13  of the  Securities  Exchange Act of 1934 (the 1934 Act) on  Form 40-F.  We are a
foreign  private issuer as  defined in  Rule 3b-4  under the 1934 Act and in  Rule 405
 under the  Securities  Act of 1933.  Our equity  securities  are  accordingly  exempt
from  Sections 14(a),  14(b),  14(c),  14(f) and 16 of the 1934 Act pursuant to Rule
3a12-3.

NOTE REGARDING FORWARD LOOKING
STATEMENTS

Certain  statements in this document
and the documents  attached as exhibits hereto constitute  forward-looking statements
 within the meaning of the Private  Securities  Litigation Reform Act of 1995. Such
 forward-looking statements  involve  known and  unknown  risks,  uncertainties  and
 other  factors  which may cause the  actual results,  performance  or  achievements  of
 Oncolytics  Biotech  Inc.,  or industry  results,  to be materially different from any
future  results,  performance or  achievements  expressed or implied by such
 forward-looking statements.  Forward-looking  statements are statements that are not
historical  facts,  and include but are not limited  to,  estimates  and  their
 underlying   assumptions;   statements  regarding  plans,   objectives  and expectations
 with  respect to the  efficacy of our  technologies;  the timing and  results of
clinical  studies related to our technologies;  future operations,  products and
services; the impact of regulatory initiatives on our operations;  the size of and
 opportunities  related to the markets for our  technologies;  general industry and
 macroeconomic  growth  rates;  expectations  related  to  possible  joint  and/or
 strategic  ventures  and statements regarding future performance.  Forward-looking
 statements generally,  but not always, are identified by the words expects,
anticipates, believes, intends, estimates,
projects,  potential,  possible and similar expressions, or that events or conditions
will, may, could or should occur.

The  forward-looking  statements in
this Annual Report are subject to various risks and  uncertainties,  most of which are
difficult to predict and generally beyond our control, including without limitation:

| |  |  | uncertainty
as to our ability to achieve the goals and satisfy assumptions of management;
| | - |  | -----------------------------------------------------------------------------------------

| |  |  | the
 uncertainties  related to the outcome of clinical  studies  and the long  process
 related to such          studies;
| | - |  | -------------------------------------------------------------------------------------------------------------------------

| |  |  | the
need for regulatory approvals to market REOLYSIN(R)and other products;
| | - |  | --------------------------------------------------------------------------

| |  |  | our
need for additional financing which may not be available on acceptable terms or at all;
| | - |  | -------------------------------------------------------------------------------------------

| |  |  | uncertainty
 as to  whether  we will be  able  to  complete  any  licensing,  partnering  or
 marketing          arrangements for our technologies;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | uncertainty
 as to the  market  acceptance  of our  products  and our  ability to  generate
 sufficient          revenues to make our products and technologies commercially viable;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | the
intense  competition in the  biotechnology  industry and risks related to changing
 technology that          may render our technology obsolete; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | other
factors  identified under the heading Risk Factors in our Renewal Annual  Information
Form, and          those that are discussed or identified in our other public filings
with the SEC.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our actual results,  performance or
achievement could differ  significantly  from those expressed in, or implied by, our
 forward-looking  statements.  Accordingly,  we cannot assure that any of the events
 anticipated by our forward-looking  statements  will occur,  or if they do, what impact
they will have on our results of operations and financial condition.

Forward-looking  statements are
based on our beliefs,  opinions and  expectations at the time they are made, and we do
not  assume any  obligation  to update our  forward-looking  statements  if those
 beliefs,  opinions,  or expectations, or other circumstances, should change.

---

For all of the reasons set forth
above, investors should not place undue reliance on forward-looking statements.

CURRENCY

Unless otherwise indicated, all
dollar amounts in this report are Canadian dollars. The exchange rate of Canadian dollars
into United States dollars, on December 30, 2005, based upon the noon buying rate in New
York City for cable transfers payable in Canadian dollars as certified for customs
purposes by the Federal Reserve Bank of New York, was U.S.$1.00 = CDN $1.1656.

AUDITED ANNUAL
FINANCIAL STATEMENTS AND 
MANAGEMENTS DISCUSSION AND ANALYSIS

Audited Annual Financial
Statements

The audited financial statements,
including the report of the auditors with respect thereto are included herein by
reference. For a reconciliation of important differences between Canadian and United
States generally accepted accounting principles, see Note 20  Reconciliation of
Canadian GAAP to US GAAP of the Notes to Audited Financial Statements included herein by
reference.

Managements
Discussion and Analysis

Our management discussion and
analysis of financial conditions and results of operations (MD&A) is
included herein by reference.

DISCLOSURE CONTROLS AND
PROCEDURES

As of the end of the period covered
by this report, we carried out an evaluation, under the supervision of our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures pursuant to Rule 13a-15 of the United States Securities Exchange Act of 1934
(Exchange Act). Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in reports that we
file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules and forms.

CHANGES IN INTERNAL
CONTROLS OVER FINANCIAL REPORTING

During the period covered by this
Annual Report on Form 40-F, no changes occurred in our internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

Our management, including the Chief
Executive Officer and Chief Financial Officer, does not expect that our disclosure
controls and procedures or internal controls and procedures will prevent all error and all
fraud. A control system can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within Oncolytics Biotech Inc. have been detected.
These inherent limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control. The design of any system of
controls

---

also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving our stated goals under all potential future conditions.
Because of the inherent limitations in a cost-effective control system, misstatements due
to error or fraud may occur and not be detected.

CODE OF ETHICS FOR CHIEF EXECUTIVE
OFFICER, CHIEF FINANCIAL OFFICER AND CONTROLLER

We have adopted a Code of Ethics for
Chief Executive Officer, Chief Financial Officer and Controller. This code applies to our
President and Chief Executive Officer, Chief Financial Officer and Controller. A copy of
the Code of Ethics for Chief Executive Officer, Chief Financial Officer and Controller is
attached to this annual report as Exhibit F, and is available in print to any shareholder
who requests it by writing to Oncolytics Biotech Inc. at Suite #210, 1167 Kensington
Crescent N.W., Calgary, Alberta, Canada, T2N 1X7, Attention: Doug Ball. All amendments to
the code, and all waivers of the code with respect to any of the officers covered by it,
will be disclosed in our annual report on Form 40-F or in current reports on Form 6-K and
provided in print to any shareholder upon written request.

We have a separate Code of Ethics
applicable to all of our employees, officers and directors, a copy of which is available
in print to any shareholder who requests it by writing to Oncolytics Biotech Inc. at Suite
#210, 1167 Kensington Crescent N.W., Calgary, Alberta, Canada, T2N 1X7, Attention: Doug
Ball. All amendments to the Code of Ethics applicable to our employees, officers and
directors, and all waivers of the code with respect to any of the officers covered by it,
will be disclosed in our annual report on Form 40-F or in current reports on Form 6-K and
provided in print to any shareholder upon written request.

AUDIT COMMITTEE

Our Board of Directors has a
separately-designated standing Audit Committee for the purpose of overseeing our
accounting and financial reporting processes and audits of our annual financial
statements. We have adopted a formal, written
Audit Committee Charter and our Audit Committee reviews and reassesses the adequacy of
the Charter on an annual basis.  As at the review of the 2005 Annual Report, and as at the date of this Report,
the following individuals comprise the entire membership of our Audit Committee, which
have been established in accordance with Section 3(a)(58)(A) of the Exchange Act:

| | Fred Stewart
Robert Schultz
Jim Dinning
| | ---------------------------------------

Independence

We have adopted the criteria for
director independence and unrelatedness prescribed by the Sarbanes-Oxley Act of 2002,
Section 10A(m)(3) of the Exchange Act and Rule 10A-3(b)(1) promulgated
thereunder, for members of public company audit committees.

Audit Committee Financial
Expert

Mr. 
          Robert Schultz has been determined by us to meet the audit committee financial
          expert criteria prescribed by the Securities and Exchange Commission and has
          been designated as an audit committee financial expert for the Audit Committee.
          Each of the previously mentioned directors have also been determined by us to be
          independent within the criteria referred to above under the subheading
          Independence.

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# PRINCIPAL ACCOUNTING
FEES AND SERVICES  INDEPENDENT AUDITORS

The table setting forth our fees paid
to our independent auditor, Ernst & Young LLP for the years ended December 31, 2005
and December 31, 2004 are set forth under the heading Additional Information
 External Auditor Service Fees of our 2005 Annual Information Form
included herein by reference.

# PRE-APPROVAL OF AUDIT
AND NON-AUDIT SERVICES PROVIDED BY INDEPENDENT AUDITORS

The Audit Committee pre-approves all
audit services to be provided to us by our independent auditors. The Audit
Committees policy regarding the pre-approval of non-audit services to be provided to
us by our independent auditors is that all such services shall be pre-approved by the
Audit Committee or by the Chairman of the Audit Committee, who must report all such
pre-approvals to the Audit Committee at their next meeting following the granting thereof.
Non-audit services that are prohibited to be provided to us by our independent auditors
may not be pre-approved. In addition, prior to the granting of any pre-approval, the Audit
Committee or the Chairman, as the case may be, must be satisfied that the performance of
the services in question will not compromise the independence of the independent auditors.

# OFF-BALANCE SHEET
ARRANGEMENTS

As disclosed in our MD&A included
herein by reference, under the heading Liquidity and Capital Resources 
Off-Balance Sheet Arrangements, we have not entered into any off-balance sheet
arrangements.

# TABLE OF CONTRACTUAL
COMMITMENTS

As disclosed in our MD&A included
herein by reference, under the heading Liquidity and Capital Resources 
Capital Expenditures and Commitments, we have set forth our contractual
commitments.

# NASDAQ CORPORATE
GOVERNANCE

Our common shares are quoted for
trading on the Nasdaq SmallCap Market (Nasdaq). Section 4350 of the Nasdaq
Marketplace Rules permits Nasdaq to grant exemptions to a foreign private issuer when
provisions of Section 4350 related to qualitative listing requirements are contrary to a
law, rule or regulation of any public authority exercising jurisdiction over such issuer
or contrary to generally accepted business practices in the issuers country of
domicile. We are organized under the laws of Province of Alberta and our common shares are
listed for trading on The Toronto Stock Exchange. We comply with the laws of Province of
Alberta and rules and regulations of The Toronto Stock Exchange, including rules related
to corporate governance practices. A description of the significant ways in which our
governance practices differ from those followed by domestic companies pursuant to Section
4350 of the Nasdaq Marketplace Rules is as follows:

| | Shareholder
Meeting Quorum Requirement: The Nasdaq minimum quorum requirement for a shareholder
meeting under Section 4350(f) of the Nasdaq Marketplace Rules is one-third of the
outstanding shares of common stock. In addition, a company listed on Nasdaq is required to
state our quorum requirement in our bylaws. Our quorum requirement is set forth in our
corporate bylaws. A quorum for our shareholder meeting is two persons present and being,
or representing by proxy, members holding not less than 5% of the issued shares entitled
to be voted at such meeting.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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The foregoing is consistent with the
laws, customs and practices in Canada and the rules of The Toronto Stock Exchange.

# UNDERTAKING AND
CONSENT TO SERVICE OF PROCESS

Undertaking

We undertake to make available, in
person or by telephone, representatives to respond to inquiries made by the Commission
staff, and to furnish promptly, when requested to do so by the Commission staff,
information relating to: the securities registered pursuant to Form 40-F; the securities
in relation to which the obligation to file an annual report on Form 40-F arises; or
transactions in said securities.

Consent to Service of
Process

We previously filed an Amended
Appointment of Agent for Service of Process and Undertaking on Form F-X signed by
Oncolytics Biotech Inc. and our agent for service of process on November 10, 2003 with
respect to the class of securities in relation to which the obligation to file the Form
40-F arises, which Form F-X is incorporated herein by reference.

---

# SIGNATURES

Pursuant to the requirements of the
Exchange Act, the Registrant certifies that it meets all of the requirements for filing
on Form 40-F and has duly caused this annual report to be signed on our behalf by the
undersigned, thereto duly authorized.

# Registrant

# Oncolytics Biotech Inc.

By   /s/Doug Ball
       Chief Financial Officer

Date:   March 3, 2006

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# DOCUMENTS FILED AS
PART OF THIS REPORT

|1. |  | Renewal
Annual Information Form of the Registrant for the year ended December 31, 2005
|-- |  | --------------------------------------------------------------------------------------

|2. |  | The
following audited financial statements of the Registrant, are exhibits to and form a part
of                  this Annual Report:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------

| | AuditorsReport
on Financial Statements
| | ---------------------------------------

| | Balance
Sheets as of December 31, 2005 and 2004;
| | ------------------------------------------------

| | Statements
of Loss and Deficit for the years ended December 31, 2005, 2004, 2003 and
                         cumulative from inception on April 2, 1998 to December 31, 2005;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Statements
of Cash Flows for the years ended  December 31,  2005,  2004, 2003 and cumulative
                         from inception on April 2, 1998 to December 31, 2005;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Notes
to Financial Statements (which include reconciliation with United States generally
                         accepted accounting principles).
| | --------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Management
Discussion and Analysis of Financial Conditions and Results of Operations
|-- |  | ------------------------------------------------------------------------------------

EXHIBITS

|A. |  | Certifications
by our Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as
                 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|B. |  | Certifications
by our Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as
                 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|C. |  | Certificate
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|D. |  | Certificate
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|E. |  | Consent
of Ernst & Young LLP, Independent Accountants
|-- |  | -----------------------------------------------------

|F. |  | Code
of Ethics for Chief Executive Officer, Chief Financial Officer and Controller
|-- |  | ----------------------------------------------------------------------------------

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