This bill updates the Taxation Act, 2007, to help small businesses in Ontario. It increases the small business tax deduction rate from 8.3% to 9.9%. It also raises the maximum business income amount for the deduction from $500,000 to $600,000. These changes take effect on January 1, 2026.
If you own a small business in Ontario, you could pay less in taxes starting in 2026. The bill allows businesses with income up to $600,000 to qualify for the small business deduction. The higher deduction rate means more of your income can be shielded from taxes, potentially saving your business money. These changes could make it easier for small businesses to grow and stay competitive.
Data unavailable. The bill increases the total income limit for the small business deduction from $500,000 to $600,000 and raises the deduction rate from 8.3% to 9.9%. These changes will likely reduce the amount of taxes paid by qualifying small businesses, resulting in less revenue for the government. The fiscal impact depends on how many businesses will benefit, which is not quantified in the available information.
Supporters say the bill will help small businesses by reducing their tax bills. The higher deduction rate and increased income limit make it easier for small firms to keep more of their earnings. They argue this will support economic growth, create jobs, and help small businesses compete better. Proponents believe this tax cut will strengthen Ontario’s economy and allow small companies to invest in their future.
Opponents might worry that the reduced taxes will lower government revenue, which could lead to less funding for public services like health and education. They may also point out that the benefit mainly helps larger small businesses closer to the $600,000 income threshold. Critics could argue that the tax cut favors certain businesses over others and that the government should raise funds from taxes on larger companies or higher-income individuals instead.