The Ontario government is aiming to build a more competitive, resilient and self-reliant economy with a $1.1 billion cut to the small business corporate income tax, from 3.2 per cent to 2.2 per cent, over the next three years.
This tax cut, announced by the office of Northumberland Peterborough South MPP David Piccini which is a 31.25 per cent cut to the existing rate, would provide more than 375,000 Ontario small businesses with up to $5,000 in tax relief every year.
This tax relief, which is being delivered through the province’s 2026 Budget, if passed, will help small business owners manage rising costs and economic uncertainty in the midst of U.S. tariffs and allow them to reinvest the savings back into their business.
The cut is a cornerstone of the government’s multi-year Tax Action Plan and builds on actions already taken to lower the rate from 3.5 per cent to 3.2 per cent in 2020 and expand eligibility to
more businesses in 2023.
To further support businesses, Ontario would also provide corporate income tax relief through paralleling federal measures that allow businesses to accelerate the write-off for a broad range of capital investments, including equipment and other assets.
These measures would provide more than $3.5 billion in additional Ontario income tax relief over four years, helping businesses invest, grow and remain competitive.
