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Corporate tax rates in Canada run from 9% to 12.2% for a small business and from 23% to 30% for a general corporation, once federal and provincial tax are added. A Canadian-controlled private corporation with $300,000 of active business income pays $27,000 in Manitoba and $36,600 in Quebec, per our 2026 data. Same income, $9,600 apart.
How are the combined rates built?
Two layers. The federal rate is 15% for general corporations, and 9% on the first $500,000 for a small business once the small business deduction is applied. On top of that, each province or territory sets its own rate, again with a lower one for small businesses. Add the layers and you have the combined figure in the table.
Only Canadian-controlled private corporations get the small business rate. The $500,000 limit is shared among associated corporations, and it shrinks for large taxable capital (between $10 million and $50 million) and for investment income above $50,000. Provincial limits differ too: Saskatchewan and PEI use $600,000 and Nova Scotia $700,000.
Which province has the lowest corporate tax rate?
| Province or territory | Small business, combined | General, combined |
|---|---|---|
| Manitoba | 9.0% | 27.0% |
| Yukon | 9.0% | 27.0% |
| Saskatchewan * | 10.0% | 27.0% |
| Prince Edward Island * | 10.0% | 30.0% |
| Nova Scotia | 10.5% | 29.0% |
| British Columbia | 11.0% | 27.0% |
| Alberta * | 11.0% | 23.0% |
| Northwest Territories | 11.0% | 26.5% |
| Newfoundland and Labrador * | 11.0% | 30.0% |
| New Brunswick | 11.5% | 29.0% |
| Ontario (calendar 2026) | 11.7% | 26.5% |
| Nunavut | 12.0% | 27.0% |
| Quebec * | 12.2% | 26.5% |
Rows marked with a star rest on weaker evidence. For Alberta, Saskatchewan and Newfoundland and Labrador we relied on provincial pages read through summaries, and the CRA’s PEI page still shows an older rate. For Quebec we could only read search snippets, because Revenu Quebec’s pages didn’t load. Treat those five as “probably right, check first”. You’d want to see the current CRA table anyway.
Which rate do you mean? Alberta has the lowest general rate at 23%. Manitoba and Yukon win for small business income.
What did Ontario change this year?
The CRA’s what’s new page says Ontario’s lower rate fell from 3.2% to 2.2% on 1 July 2026. A corporation with a calendar year has both rates in play, and the blend works out to roughly 11.7% combined. That blend is our own arithmetic by days, not a published figure. From 2027 the combined small business rate should be 11.2%, again derived, not quoted.
Quebec reportedly follows with 2.2% for years that begin after 29 April 2026, so a calendar-year company stays at 3.2% until 2027. That comes from a snippet of a Revenu Quebec news item, and there’s a 5,500 paid hours test we haven’t modelled. Provincial rates can also change at the start of a quarter, so check the CRA table again before you file, and especially around 1 October.
What does a rate gap mean in dollars?
Run $300,000 of active business income through the corporate tax calculator and you get $35,088 in Ontario, $33,000 in British Columbia and Alberta, $34,500 in New Brunswick and $27,000 in Manitoba. On $700,000 the gap shifts, because the part above the small business limit is taxed at the general rate. Ontario comes to $111,480, Alberta to $101,000 and Nova Scotia to $85,500, since its limit is higher.
Should you move your company for that? Almost never. A cheaper province saves a few thousand dollars on paper, but the calculator assumes one head office province. Firms working in several provinces split income between them, and we haven’t covered those rules.
What the rates leave out
You aren’t done once the corporation pays. Money paid out to you as dividends or salary is taxed again, so see the dividend tax calculator and the self-employed tax calculator for the personal side. Payroll costs are separate too, and the payroll remittance calculator covers them. Credits, associated companies and passive income limits are not in these figures.
Where the numbers come from
Federal rates come from the CRA’s corporation tax rates page and T2 guide. Provincial rates come from CRA provincial pages, the CRA what’s new page and, for a few provinces, provincial sites, gathered on 29 September 2026. The site has no connection with the CRA or any government body.
Frequently asked questions
Which province has the lowest small business tax rate?
Manitoba and Yukon, at about 9% combined in our 2026 data. Saskatchewan and PEI follow at 10%.
Which province has the lowest general corporate rate?
Alberta, at 23% combined, though our Alberta figure comes from summaries of provincial pages.
What is the federal small business rate?
9% on the first $500,000 of active business income for a Canadian-controlled private corporation, after the small business deduction.
Did Ontario's rate change in 2026?
The CRA says Ontario's lower rate fell from 3.2% to 2.2% on 1 July 2026. A calendar-year company gets a blend of the two in 2026.
Should I incorporate in a low tax province?
Rarely a good reason alone. Firms with offices in several provinces split income, and we didn't cover those rules.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST
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.