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4- Corporate Taxation and U.S. Federal Tax Rates

Table C1 – Business Income Eligible For SBD

20251 % Combined %
Federal 9.002  
Provincial
Alberta 2.00 11.00
British Columbia 2.00 11.00
Manitoba 0.00 9.00
New Brunswick 2.50 11.50
Newfoundland and Labrador 2.50 11.50
Northwest Territories 2.00 11.00
Nova Scotia3 1.754 10.755
Nunavut 3.00 12.00
Ontario 3.20 12.20
Prince Edward Island 1.00 10.006
Quebec 3.20 12.20
Saskatchewan 1.00 10.007
Yukon: without MPP/with MPP 0.00 9.00

  1. $500,000 eligible for the SBD for federal purposes and provinces and territories, except in Saskatchewan ($600,000), in Nova Scotia (ceiling increased to $700,000 since April 1, 2025) and in Prince Edward Island (ceiling increased to $600,000 since July 1, 2025). In all jurisdictions, the SBD is progressively reduced when paid-up/taxable capital of all associated corporations is greater than $10M and is eliminated when it reaches $50M. The SBD is also reduced when the adjusted aggregate investment income of all associated corporations is greater than $50,000 and becomes nil when it reaches $150,000 (not applicable in Ontario and New Brunswick). Both reductions apply in parallel so that the SBD is reduced by the greater of the two amounts.
  2. Rate of 4.5% on zero-emission technology manufacturing income. The rate will increase gradually as of 2032.
  3. Subject to certain conditions, a new small business can benefit from a corporate tax rate reduction in its first three taxation years. Refer to the Nova Scotia corporate tax reduction for new small businesses page for details..
  4. Rate reduced from 2.5% to 1.5% since April 1, 2025 (average rate of 1.75% for 2025).
  5. Combined rate reduced from 11.5% to 10.5% since April 1, 2025, on the first $500,000 of income that qualifies for the SBD (average rate of 10.75% for 2025); combined rate of 16.5% from that date on the next $200,000 of qualifying income due to the increase of the provincial ceiling.
  6. On the first $500,000 of income that qualifies for the SBD. Combined rate of 16% since July 1, 2025 on the next $100,000 of qualifying income due to the increase of the provincial ceiling.
  7. Rate of 10% on the first $500,000 of income that qualifies for the SBD. Rate of 16% on the next $100,000 of qualifying income, because of the gap between the federal-provincial ceilings.