As we move through 2025, Canadian businesses must stay alert to changes in corporate tax policy. From provincial shifts to upcoming federal announcements, understanding the current landscape is key to staying compliant and competitive.
Between April 1 and June 30, 2025, the re-election of a minority Liberal government signaled continued stability in the Canada corporate tax rate 2025, with no major changes proposed. While no major corporate income tax rate federal changes were proposed, the government is expected to present its full budget later this year potentially introducing key corporate tax legislation changes.
Quebec Information Bulletin 2025-4: Key Tax Adjustments
Highlights:
- Revises the list of low economic vitality territories for purposes of:
- The tax credit for investment and innovation
- The new tax holiday for large investment projects
- Aims to align Quebec’s corporate tax system with recent federal tax legislation changes
- Status (as of June 30, 2025):
- Measures not yet tabled in Quebec’s legislature
- Not substantively enacted for Canadian GAAP or enacted for US GAAP.
Provincial and Territorial Budgets: April–June 2025
Between April 1 and June 30, 2025, several provinces and territories tabled their budgets. Only Prince Edward Island announced a change to general and M&P corporate income tax rates.
Newfoundland and Labrador
- Corporate and personal income tax rates remain unchanged.
Ontario
- Budget Date: May 15, 2025
- Corporate tax rates unchanged, but key fiscal measures include:
- Temporary enhancement of the Ontario Made Manufacturing Investment Tax Credit
- Introduction of the Ontario Shortline Railway Investment Tax Credit
- Details on the new Ontario Fertility Treatment Tax Credit
- Permanent reduction of gasoline and diesel fuel tax rates
- These updates support economic development but do not alter the Ontario corporate tax rate structure.
Prince Edward Island
- Corporate tax rate reduction effective July 1, 2025:
- General and M&P corporate income tax rate reduced from 16% to 15%
- Enacted under: Bill 21
- Canadian GAAP: Substantively enacted as of May 9, 2025
US GAAP: Enacted as of May 16, 2025
Legislative Activity: Federal and Provincial Corporate Tax Bills
From January through June 2025, several provinces and the federal government advanced tax-related legislation affecting corporate income taxes, R&D incentives, and fiscal credits. Table 1 below outlines key bills that were either:
- Tabled or received Royal Assent in 2025, or
- Tabled before 2025 but enacted during this period
Bolded entries indicate a change in status from April 1 to June 30, 2025, reflecting updated legislative progress.
Federal and Provincial/Territorial Bills – Corporate Income Tax Legislation Status (as of June 30, 2025)
| Province/Territory | Bill # | Bill Name | Canada (GAAP) | US GAAP |
|---|---|---|---|---|
| Alberta | 39 | Financial Statutes Amendment Act, 2025 | March 10, 2025 | May 15, 2025 |
| British Columbia | 5 | Budget Measures Implementation Act, 2025 | March 4, 2025 | May 29, 2025 |
| Manitoba | 27 | The Income Tax Amendment Act | March 6, 2025 | June 3, 2025 |
| Manitoba | 46 | The Budget Implementation and Tax Statutes Amendment Act, 2025 | April 24, 2025 | Not as at June 30, 2025 |
| Nova Scotia | 68 | Financial Measures (2025) Act | March 5, 2025 | March 26, 2025 |
| Ontario | 24 | Plan to Protect Ontario Act (Budget Measures), 2025 | May 15, 2025 | June 5, 2025 |
| Prince Edward Island | 21 | An Act to Amend the Income Tax Act | May 9, 2025 | May 16, 2025 |
| Quebec | 99 | An Act to give effect to fiscal measures announced in the Update on Québec’s Economic and Financial Situation (Nov 21, 2024) and Budget Speech (March 25, 2025) | May 8, 2025 | Not as at June 30, 2025 |
| Saskatchewan | 13 | The Income Tax Amendment Act, 2025 | March 24, 2025 | May 13, 2025 |
| Saskatchewan | 17 | The Saskatchewan Commercial Innovation Incentive (Patent Box) Amendment Act, 2025 | March 26, 2025 | May 13, 2025 |
Canada Corporate Income Tax Rates 2025 – Federal & Provincial (as of June 30, 2025)
| Jurisdiction | Effective Date | Rate | Recognized for Accounting (Canada) | Recognized for Accounting (US GAAP) | Bill # |
|---|---|---|---|---|---|
| Federal | Before January 1, 2022 | 15% (General and M&P) | Before January 1/22 | Before January 1/22 | N/A |
| Provincial SIFT tax: Varies | – | – | – | – | – |
| Federal | After April 7, 2022 | Additional tax on banks/insurers | December 8/22 | December 15/22 | C-32 |
| Alberta | Before January 1, 2022 | 8% | Before January/22 | Before January/22 | N/A |
| British Columbia | Before January 1, 2022 | 12% | Before January 1/22 | Before January 1/22 | N/A |
| Manitoba | Before January 1, 2022 | 12% | Before January 1/22 | Before January 1/22 | N/A |
| New Brunswick | Before January 1, 2022 | 14% | Before January 1/22 | Before January 1/22 | N/A |
| Newfoundland and Labrador | Before January 1, 2022 | 15% | Before January 1/22 | Before January 1/22 | N/A |
| Northwest Territories | Before January 1, 2022 | 11.5% | Before January 1/22 | Before January 1/22 | N/A |
| Nova Scotia | Before January 1, 2022 | 14% | Before January 1/22 | Before January 1/22 | N/A |
| Nunavut | Before January 1, 2022 | 12% | Before January 1/22 | Before January 1/22 | N/A |
| Ontario | Before January 1, 2022 | 11.5% (General), 10% (M&P) | Before January 1/22 | Before January 1/22 | N/A |
| Prince Edward Island | July 1, 2025 | 15% (General and M&P) | May 9/25 | May 16/25 | 21 |
| Quebec | Before January 1, 2022 | 11.5% (General and M&P) | Before January 1/22 | Before January 1/22 | N/A |
| Saskatchewan | Before January 1, 2022 | 12% (General), 10% (M&P) | Before January 1/22 | Before January 1/22 | N/A |
| Yukon | Before January 1, 2022 | 12% | Before January 1/22 | Before January 1/22 | N/A |
As of mid-2025, the Canada corporate tax rate 2025 remains steady, with the federal general and manufacturing rate holding at 15%. Most provinces maintained existing rates, with Prince Edward Island standing out for reducing its general and M&P rate from 16% to 15% effective July 1, 2025.
As of mid-2025, the Canada corporate tax rate 2025 remains steady, with the federal general and manufacturing rate holding at 15%. Most provinces maintained existing rates, with Prince Edward Island standing out for reducing its general and M&P rate from 16% to 15% effective July 1, 2025.
While the current federal corporate tax rate in Canada hasn’t changed, businesses should stay alert as the upcoming federal budget may introduce corporate tax legislation changes with implications for planning and compliance.
For Canadian companies, especially those navigating multiple jurisdictions, understanding the evolving corporate tax brackets and provincial updates like the Ontario corporate tax rate or the small business company tax rate in Q2 is essential.
By monitoring both legislative and enacted changes, businesses can better align their tax strategy with Canada’s shifting regulatory and economic landscape.
