Corporate Tax

Corporate Tax Rates in Canada Explained (2025)

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What Is the Corporate Tax Rate in Canada?

Canada has a two-tier corporate tax system. The general federal rate is 15% plus provincial rates (varies by province). CCPCs (Canadian-Controlled Private Corporations) qualify for the small business deduction on their first $500,000 of active business income.

What Is the Small Business Tax Rate?

The combined federal-provincial small business rate ranges from 9% (in several provinces) to about 12.2% (Nova Scotia). This applies to the first $500,000 of active business income for qualifying CCPCs. Federal small business rate: 9%. Provincial rates vary from 0% (Nunavut, Yukon) to 3.2% (Nova Scotia).

Small Business Rates by Province (2025)

Alberta: 11% combined (2% provincial). British Columbia: 11% combined (2% provincial). Ontario: 12.2% combined (3.2% provincial). Manitoba: 9% combined (0% provincial). Saskatchewan: 10% combined (1% provincial). Quebec: 12.2% combined (3.2% provincial).

What Is the General Corporate Tax Rate?

Income above $500,000 or from passive investments is taxed at the general rate. Combined federal-provincial general rates range from about 23% to 31% depending on province. BC and Ontario: approximately 26.5%. Alberta: approximately 23%.

Frequently Asked Questions

What is the small business tax rate in Canada for 2025?

The combined federal-provincial small business tax rate ranges from 9% to about 12.2% depending on the province, applying to the first $500,000 of active business income for qualifying CCPCs.

What is the corporate tax rate in Alberta?

Alberta has the lowest general corporate tax rate in Canada. The combined rate is approximately 23% (15% federal + 8% provincial) for general income and 11% for small business income.