Corporations, trusts and estates
What is the Small business deduction (SBD)?
The lower tax rate Canadian-controlled private corporations pay on the first $500,000 of active business income: 9% federal plus 2.2% Ontario from July 1, 2026, for 11.2% combined.
Good to know
A calendar 2026 year-end gets a blended Ontario rate of about 2.7%.
Also called: SBD, small business rate.
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Reviewed by the Done Right Accounting team. Last reviewed October 2026.