Quick Corporate rates digest for 2016

We would like to refresh your memory with the Corporate Rates. As we remember previous year brought us a new federal government, which also brought us some tax changes. Some of the taxes are more technical in nature. The federal general tax rates are unchanged and remain at 15% for 2016. However, some provincial general, including Manufacturing and Production (M&P) increased. Those provinces are Alberta (from 10% to 12%), New Brunswick (from 12% to 14%), and Newfoundland and Labrador (from 14% to 15%).

2015 and 2016 Federal and Combined Corporate Income Tax Rates and CCPC (small business up to $500,000)

Province General and M&P (%) CCPC (small business) (%)
2015 2016 2015 2016
Federal 15 15 11 10.5
Alberta 26.01 27 14 13.5
British Columbia 26 26 13.5 13
Manitoba 27 27 11 (23) a 10.5 (22.5) a
New Brunswick 27 28.5 15 14.12
Newfoundland & Labrador 29 (20) b 30 b 14 13.5
Northwest Territories 26.5 26.5 15 14.5
Nova Scotia 31 31 14 (27) a 13.5 (26.5) a
Nunavut 27 27 15 15
Ontario 26.5 26.5 15.5 15
Prince Edward Island 31 31 15.5 15
Quebec 26.9 26.9 19 (15.49) c 18.5 (14.5) c
Saskatchewan 27 (25) 27 (25) 13 12.5
Yukon 30 30 14 13.5

a Applies for revenues below this threshold and the upper rate is for revenues above.
b Newfoundland & Labrador are no longer applying its deduction starting January 1, 2016.
c Quebec CCPC lower rates apply only to companies under $500,000 if 50% or more activities attribute to M&P.

Small business deduction (SBD) threshold for 2015 and 2016 are $500,000, except Manitoba has $425,000 in 2015 and $450,000 in 2016 and for Nova Scotia with $350,000 for both years, lower rate

All these changes came into effect as a result of the implementation of bill C-59, starting January 1, 2016. Those decreased federal small business rate from 11% to 10.5%. That was the reason, why all combined rates went down. In the future years from 2017 to 2019, the federal small business rate supposed to decrease even more, but it was canceled by the implementation of Bill C-15.Small businesses threshold stays the same except for Manitoba, where it went up from $425,000 to $450,000.