Corporate Taxation and U.S. Federal Tax Rates

Business Income Eligible for SBD¹ – 2021

This document is up to date as of August 1, 2021 and reflects the status of legislation, including proposed amendments at this date.

2021 % % combined
Federal 9.00
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 3.00 12.00
Northwest Territories 2.002 11.00
Nova Scotia 2.503 11.50
Nunavut 3.00 12.00
Ontario 3.20 12.20
Prince Edward Island 2.004 11.00
Quebec 3.205 12.20
Saskachewan 0.006 9.007
Yukon: without MPP / with MPP 0.008 9.00

1 $500,000 eligible for the SBD for federal purposes and all ­provinces and territories, except in Saskatchewan ($600,000). 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 $15M. For taxation years started after 2018, 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). For greater clarity, both reductions apply in parallel so that the SBD is reduced by the greater of the two amounts.
2Since January 1, 2021 (4% before that date).
3 Since April 1, 2020 (3% before that date).
4 Since January 1, 2021 (3% before that date). Rate reduced to 1% as of January 1, 2022.
5 Rate reduced to 3.2% since March 26, 2021 (4% before that date). Average rate of 3.38% in 2021.
6 Since October 1, 2020 (2% before that date). Rate increased to 1% and 2% as of July 1, 2022 and 2023 respectively.
7 Combined rate of 9% on the first $500,000 of income that qualifies for the SBD and rate of 15% on the next $100,000 of qualifying income, because of the gap between the federal-provincial ceilings.
8 Since January 1, 2021 (1.5% or 2% before that date, depending on whether income was eligible for the MPP).
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