Corporate Taxation and U.S. Federal Tax Rates

Business Income Eligible for SBD¹ – 2018

This document is up to date as of August 31, 2018 and reflects the status of legislation, including proposed amendments at this date.
2018 % % combined
Federal 10.002
Provincial
Alberta 2.00 12.00
British Columbia 2.00 12.00
Prince Edward Island 4.003 14.00
Manitoba 0.00 10.00
New Brunswick 2.634 12.63
Nova Scotia 3.00 13.00
Nunavut 4.00 14.00
Ontario 3.505 13.50
Quebec
without MPP / with MPP 7.246 / 4.007 17.24 / 14.00
Saskachewan 2.00 12.008
Newfoundland and Labrador 3.00 13.00
Northwest Territories 4.00 14.00
Yukon
without MPP / with MPP 2.00 / 1.50 12.00 / 11.50

1 $500,000 eligible for the SBD for federal purposes and all provinces and territories except Manitoba ($450,000; $500,000 as of January 1, 2019) and in Saskatchewan ($600,000 since January 1, 2018). 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 is $15M. For taxation years beginning after 2018, the SBD will also be reduced when adjusted aggregate investment income of all associated corporations will be greater than $50,000 and will be nil when it will reach $150,000. 2 Since January 1, 2018 (10.5% before that date). Rate reduced to 9% as of January 1, 2019. 3 Rate reduced to 2.5% since April 1, 2018 (3.0% before that date). Average rate of 2.63% for 2018). 4 Since January 1, 2018 (4.5% before that date). 5 Since January 1, 2018 (4.5% before that date). 6 Rate reduced to 7% since March 28, 2018 (8% before that date). Average rate of 7.24% for 2018. Rate reduced thereafter by 1% per year to reach 4% in 2021. 7 Rate reduced up to 4% for SMEs in primary and manufacturing sectors, based on their proportion of activities in these sectors. 8 Combined rate of 12% 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 ceiling.

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