A Canadian-Controlled Private Corporation (CCPC) benefits from a reduced corporate tax rate on the first $500,000 of active business income, known as the Small Business Deduction (SBD).
Federal rates
- Small business rate: 9% (on first $500k of active business income)
- General rate: 15% (above $500k)
Combined rates by province (small business, 2025)
- Alberta: 11% (9% federal + 2% provincial)
- BC: 11%
- Ontario: 12.2%
- Quebec: 12.2%
- Manitoba / Saskatchewan: 9% (0% provincial)
SBD clawback
The $500k SBD limit is reduced when a CCPC has passive investment income above $50,000 (fully clawed back at $150k). Large CCPCs with taxable capital above $10M face a separate reduction.