Federal rates
The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement.
After the general tax reduction, the net tax rate is 15%.
For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is:
- 9% effective January 1, 2019
- 10% effective January 1, 2018
Provincial or territorial rates
Generally, provinces and territories have two rates of income tax – a lower rate and a higher rate.
Lower rate
The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit.
Higher rate
The higher rate applies to all other income.
Provincial and territorial tax rates (except Quebec and Alberta)
The following table shows the income tax rates and business limits for provinces and territories (except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA). These rates are in effect January 1, 2021, and may change during the year.
| Province or territory | Lower rate | Higher rate | Business limit |
|---|---|---|---|
| Newfoundland and Labrador | 3% | 15% | $500,000 |
| Nova Scotia | 2.5% | 14% | $500,000 |
| New Brunswick | 2.5% | 14% | $500,000 |
| Prince Edward Island | 2% | 16% | $500,000 |
| Ontario | 3.2% | 11.5% | $500,000 |
| Manitoba | nil | 12% | $500,000 |
| Saskatchewan | 0% | 12% | $600,000 |
| British Columbia | 2% | 12% | $500,000 |
| Nunavut | 3% | 12% | $500,000 |
| Northwest Territories | 2% | 11.5% | $500,000 |
| Yukon | 0% | 12% | $500,000 |
For more information, go to Dual tax rates.
Originals source as of November 10, 2021: Corporation tax rates – Canada.ca
Corporate income tax rates and business limits – British Columbia
Corporate income tax rates are expressed as a percentage of taxable income earned in the province.
B.C. has two rates of corporation income tax – the general rate and the lower small business rate.
The lower small business rate is applicable to Canadian-controlled private corporations (CCPCs) with active business income eligible for the federal small business deduction.
Generally, active business income is income earned by a corporation from a business other than a specified investment business or a personal service business.
The lower small business rate applies to active business income up to the B.C. business limit of:
- $500,000 effective January 1, 2010
- $400,000 effective January 1, 2005 to December 31, 2009
- $300,000 from April 1, 2002 to December 31, 2004
The general rate applies to income over $500,000 and any income that is not eligible for the lower small business rate (e.g. investment income).
When the rate or the business limit changes during the tax year, you have to base your calculation on the number of days in the year that each rate or limit is in effect.
General corporate income tax rate
| Effective January 1, 2018 | 12.0% |
| April 1, 2013 – December 31, 2017 | 11.0% |
| January 1, 2011 – March 31, 2013 | 10.0% |
| January 1, 2010 – December 31, 2010 | 10.5% |
| July 1, 2008 – December 31, 2009 | 11.0% |
| July 1, 2005 – June 30, 2008 | 12.0% |
| January 1, 2002 – June 30, 2005 | 13.5% |
| July 1, 1993 – December 31, 2001 | 16.5% |
Small business corporate income tax rate
| Effective April 1, 2017 | 2.0% |
| December 1, 2008 – March 31, 2017 | 2.5% |
| July 1, 2008 – November 30, 2008 | 3.5% |
| January 1, 2001 – June 30, 2008 | 4.5% |
| July 1, 2000 – December 31, 2000 | 4.75% |
| July 1, 1999 – June 30, 2000 | 5.5% |
| January 1, 1999 – June 30, 1999 | 8.5% |
Originals source as of November 10, 2021: Corporate income tax rates and business limits – Province of British Columbia (gov.bc.ca)
Corporate Income Tax – Ontario
Generally, corporations carrying on business through a permanent establishment in Ontario are subject to both federal and Ontario corporate income taxes. The tax rates apply to taxable income allocated to Ontario.
General rate
The Ontario General corporate income tax rate is currently 11.5%.
| Period | Rate |
|---|---|
| July 1, 2011 onwards | 11.5% |
| July 1, 2010 to June 30, 2011 | 12.0% |
| Prior to July 1, 2010 | 14.0% |
Lower rates
Small Business Deduction
The Ontario small business deduction (SBD) reduces the corporate income tax rate on the first $500,000 of active business income of Canadian‑controlled private corporations (CCPCs). Effective January 1, 2020, the lower rate of Ontario corporate income tax is reduced from 3.5 per cent to 3.2 per cent.
| Period | Lower rate of Ontario corporation income tax |
|---|---|
| January 1, 2020 onwards | 3.2% |
| January 1, 2018 to December 31, 2019 | 3.5% |
| July 1, 2010 to December 31, 2017 | 4.5% |
| Prior to July 1, 2010 | 5.5% |
While the federal government announced in 2018 that it is phasing out the $500,000 small business limit for corporations that earn between $50,000 and $150,000 of passive investment income in a taxation year, Ontario is not paralleling this phase‑out.
Ontario does parallel the federal SBD phase‑out where a CCPC’s (and associated groups of CCPCs) taxable capital is between $10 million and $15 million. CCPCs (and associated groups of CCPCs) with taxable capital of $15 million or more are no longer eligible for the lower rate of corporate income tax on the first $500,000 of active business income.
Where a corporation assigns any portion of its federal business limit to another corporation, the corporation’s Ontario business limit is also reduced by the same amount by which the federal business limit is reduced.
More about the Ontario small business deduction
Manufacturing and Processing Tax Credit
Corporations involved in manufacturing and processing, fishing, farming, mining and logging may qualify for a tax credit that reduces the corporate income tax rate to 10 per cent.
More about the Ontario tax credit for manufacturing and processing
Contact the Canada Revenue Agency
The Canada Revenue Agency administers Ontario’s corporate income tax, corporate minimum tax, and the special additional tax on life insurers. Contact the agency with your questions at 1‑800‑959‑5525 or 1‑800‑665‑0354 for teletypewriter (TTY).
Canada Revenue Agency – Ontario – Provincial corporation tax
Originals source as of November 10, 2021: Corporate Income Tax (gov.on.ca)
Corporate income tax – Alberta
Corporations doing business in Alberta are generally required to pay Alberta corporate income tax and file a corporate income tax return with Alberta Tax and Revenue Administration.
Corporate income tax rates
The Job Creation Tax Cut is the government’s legislated plan to reduce Alberta’s general income tax rate on businesses from 12% to 8%. As part of Alberta’s Recovery Plan, the government accelerated the Job Creation Tax Cut, reducing the general corporate income tax rate to 8% on July 1, 2020, a year and a half sooner than originally planned. Alberta’s small business tax rate is 2% (see current and historical corporate income tax rates).
| General corporate income tax rate | Tax rate |
|---|---|
| July 1, 2015 to June 30, 2019 | 12% |
| July 1, 2019 | 11% |
| January 1, 2020 | 10% |
| July 1, 2020 | 8% |
To further improve Alberta’s competitiveness and encourage investment, Alberta paralleled federal measures to enhance the capital cost allowance (CCA) regime.
These measures allow corporations to claim the cost of new capital assets more quickly for tax purposes, improving a company’s cash flow and making it more attractive for them to invest in new assets. Consistent with the federal announcement, these measures begin to phase out in 2023 and will be completely phased out by 2027.
Originals source as of November 10, 2021: Alberta tax overview | Alberta.ca
Corporation Income Tax – Saskatchewan
All resident corporations (except tax-exempt Crown corporations, Hutterite colonies and registered charities) have to file a corporation income tax (T2) return with the Canada Revenue Agency every tax year even if there is no tax payable. This includes:
- non-profit organizations;
- tax-exempt corporations; and
- inactive corporations.
Corporations with a permanent establishment in Saskatchewan must calculate and remit Saskatchewan corporation income tax in addition to federal income tax. This is levied as a percentage of the share of a corporation’s taxable income that is allocated to the province.
More information on filing corporation income tax is available through the Canada Revenue Agency
Tax Rates
Small Business Rate
Saskatchewan small businesses, defined as Canadian-controlled private corporations, pay a reduced rate (commonly known as the small business rate) of 2% on the first $600,000 of eligible business income earned.
As announced on December 7, 2020, Saskatchewan’s small business corporate income tax rate temporarily drops from 2% to zero effective October 1, 2020. Beginning July 1, 2022, the small business tax rate will move to 1%. And on July 1, 2023, the small business tax rate will return to 2%.
As of January 1, 2018, the small business income threshold increased from $500,000 to $600,000.
Changes to the rate and income threshold are pro-rated for corporate taxation years that straddle effective dates.
General Rate
The general tax rate applies to all income not eligible for the small business rate. Effective July 1, 2017, the general rate of corporation income tax decreased from 12% to 11.5%. Effective January 1, 2018, the general rate of corporation income tax increased from 11.5% back to 12%.
The tax rate changes are pro-rated for corporate taxation years that straddle the effective dates.
Manufacturing and Processing Rate Reduction
Corporations involved with manufacturing and processing (M&P) activities receive a tax reduction of up to two percentage points, depending on the extent of the company’s presence in the province.
| Saskatchewan’s Corporation Income Tax Rates | ||||||
| Up to July 1, 2017 | July 1, 2017 to Dec. 31, 2017 | Jan. 1, 2018 to Sept. 30, 2020 | Oct. 1, 2020 to June 30, 2022 | July 1, 2022 to June 30, 2023 | July 1, 2023 and onward | |
| General | 12.0% | 11.5% | 12.0% | 12.0% | 12.0% | 12.0% |
| M&P Profits | 10.0% | 9.5% | 10.0% | 10.0% | 10.0% | 10.0% |
| Small Business | 2.0% | 2.0% | 2.0% | 0.0% | 1.0% | 2.0% |
| SB Threshold | $500,000 | $500,000 | $600,000 | $600,000 | $600,000 | $600,000 |
Corporations may also qualify for other Saskatchewan tax credits in support of investments in manufacturing and processing, and research and development.
Originals source as of November 10, 2021: Corporation Income Tax | Provincial Taxes, Policies and Bulletins | Government of Saskatchewan
Corporate Income Taxes – Manitoba
Manitoba Corporate Income Tax
Manitoba corporation income taxes are administered and collected by Canada Revenue Agency on behalf of the Province. The 12.0% basic provincial corporation income tax rate in Manitoba is applied to corporation taxable income allocated to the Province. As of December 1, 2010 the small business income tax has been eliminated. In 2016, the small business limit increased to $450,000 and effective January 1, 2019 is further increased to $500,000.
Manitoba will parallel the federal measure which phases out the $500,000 small business limit for corporations that earn between $50,000 and $150,000 of passive investment income in a taxation year, for tax years beginning after 2018.
For more information on the corporation income taxation in Manitoba, contact Finance Research Division, Manitoba Department of Finance.
Federal Corporate Income Taxes
The federal corporate income tax is assessed on national corporate taxable income.
The 2017 and 2018 general corporate income tax rates are 15.0%. The small business limit is $500,000. The small business rate is 10.5% for 2017 and 10% for 2018.
Originals source as of November 10, 2021: Province of Manitoba | finance – Corporate Income Taxes (gov.mb.ca)