Ontario Cutting Small Business Tax by $1.1 Billion

April 2, 2026

Small businesses are the backbone of Ontario’s economy, and our government is taking action to help them grow, invest and create good-paying jobs.

Ontario’s 2026 Budget will cut the small business corporate income tax by $1.1 billion to save more than 375,000 small businesses up to $5,000 per year.

This tax cut, which is a 31.25 per cent cut to the existing rate, 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.

This cut is part of the government’s Tax Action Plan that 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.

Ontario would also allow businesses to accelerate the write-off of a broad range of capital investments that would provide over $3.5 billion in income tax relief over four years.

These measures build on Ontario’s broader plan to protect workers and businesses from the impacts of U.S. tariffs and global economic uncertainty, including providing nearly $30 billion in relief and support since 2025.