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Company tax rates in Canada stack two layers. A private company that qualifies pays 9% federal plus a provincial rate on its first $500,000 of active business income, so the combined bill runs from 9% to 12% depending on where you’re based. Income above that limit is taxed at the general rate, 15% federal plus the province’s own share, which is 23% to 30%.
What are the company tax rates by province?
This table shows the provincial and territorial part. Add the federal 9% (small business) or 15% (general) to get the total. The figures come from the CRA’s rates table and its “what’s new” page for corporations.
| Province or territory | Small business rate | General rate | Business limit |
|---|---|---|---|
| British Columbia | 2% | 12% | $500,000 |
| Alberta | 2% | 8% | $500,000 |
| Saskatchewan | 1% | 12% | $600,000 |
| Manitoba | 0% | 12% | $500,000 |
| Ontario | 3.2%, then 2.2% from 1 July 2026 | 11.5% | $500,000 |
| New Brunswick | 2.5% | 14% | $500,000 |
| Nova Scotia | 1.5% | 14% | $700,000 |
| Prince Edward Island | 1% | 15% | $600,000 |
| Newfoundland and Labrador | 2% from 1 January 2026 | 15% | $500,000 |
| Yukon | 0% | 12% | $500,000 |
| Northwest Territories | 2% | 11.5% | $500,000 |
| Nunavut | 3% | 12% | $500,000 |
Quebec isn’t in the table. It runs its own corporate return, and we couldn’t read the Revenu Quebec pages, so we won’t quote a rate. Alberta also has its own return, though the rates above come from Alberta’s tax overview page.
Why are there two rates?
The lower one is for Canadian-controlled private corporations on active business income up to the business limit. It’s the small business deduction, and it does most of the work in a small company’s tax bill. The general rate applies to everything else, including any income over the limit.
The limit isn’t always $500,000. Nova Scotia sets its own at $700,000, and Saskatchewan and Prince Edward Island use $600,000. The federal limit is shared between associated companies, so two corporations under the same control can’t each claim a full $500,000.
What does a company pay on $150,000?
Take a Nova Scotia private company with $150,000 of active business income. The corporate tax calculator gives $13,500 federal and $2,250 provincial, so $15,750 in all. That’s 10.5% of the profit.
Move the same company to Alberta and the bill is $16,500, or 11%. British Columbia gives the same $16,500. The gap between provinces is small on a low profit, which surprises people who expect a big swing.
Now switch off the small business deduction. A Nova Scotia corporation that doesn’t qualify pays $22,500 federal and $21,000 provincial, $43,500 or 29%. That’s why the qualifying test matters far more than the province you pick.
Which company tax rates are still moving?
Ontario is the one to watch. The CRA says the lower rate falls from 3.2% to 2.2% on 1 July 2026. A company with a calendar year gets a blend of the two, and our calculator uses roughly 2.7% for that. We derived that number by days, and no official page publishes it, so treat it as an estimate and confirm it against your T2 schedule.
Newfoundland and Labrador dropped its lower rate to 2% from the start of 2026, and the CRA lists further cuts in 2027 and 2028. Quebec has announced a lower rate for years that begin after April 2026, but we couldn’t confirm the details on an official page we could open.
Mistakes that make the estimate wrong
The biggest one is assuming every corporation gets the low rate. It’s for Canadian-controlled private corporations only, and a large amount of taxable capital or investment income can shrink the limit. Our calculator ignores both, along with credits.
The second is mixing up company tax with what you personally pay when money leaves the company. Salary and dividends are taxed again in your hands. The dividend tax calculator shows that second layer, and the income tax calculator covers salary. If you hire staff, the payroll remittance calculator shows what you send to the CRA each period.
Where the numbers come from
Federal rates and the provincial table come from the Canada Revenue Agency’s corporation tax rates page, and the Ontario and Newfoundland and Labrador changes from its corporations “what’s new” page, both read in September 2026. Alberta’s rates are from the Government of Alberta. Rates are set every year, so check the CRA page for your own year end before you file.
Frequently asked questions
What is the federal tax rate for a small company?
It's 9% on active business income up to the business limit for a Canadian-controlled private corporation, and 15% on income above it.
Which province has the lowest company tax rate?
On the CRA table, Manitoba and Yukon show a nil small business rate, so the combined rate there is the federal 9%.
Is the business limit the same everywhere?
No. Most provinces use $500,000, but Nova Scotia uses $700,000 and Saskatchewan and Prince Edward Island use $600,000.
Does Ontario's rate change in 2026?
The CRA says the lower rate drops from 3.2% to 2.2% on 1 July 2026. How it applies to a calendar year is a blend that isn't published, so check your return.
Do these rates apply to a sole proprietor?
No. They are for corporations. A sole proprietor reports business income on a personal return and pays personal rates.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.