Corporate Taxation and U.S. Federal Tax Rates

Business Income Eligible for SBD¹ – 2020

This document is up to date as of September 3, 2020 and reflects the status of legislation, including proposed amendments at this date.

2020 % % 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 4.00 13.00
Nova Scotia 2.623 11.62
Nunavut 3.00 12.00
Ontario 3.204 12.20
Prince Edward Island 3.002 12.00
Quebec
without MPP / with MPP 5.005 / 4.006 14.00 / 13.00
Saskachewan 2.00 11.007
Yukon
without MPP / with MPP 2.008/ 1.508 11.00 / 10.50

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.
2 Rate reduced to 2.5% since April 1, 2020 (3% before that date; average rate of 2.62% in 2020).
3 Since January 1, 2020 (3.5% before that date).
4 Since January 1, 2020 (3.5% before that date). Rate reduced to 2% starting January 1, 2021.
5 Since January 1, 2020 (6% in 2019). Rate reduced to 4% in 2021.
6 Rate reduced up to 4% for SMEs in primary and manufacturing sectors, based on their proportion of activities in these sectors.
7 Combined rate of 11% on the first $500,000 of income that qualifies for the SBD and rate of 17% on the next $100,000 of qualifying income, because of the gap between the federal-provincial ceilings.
8 Rate reduced to 0% starting January 1, 2021.
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