Ontario Reducing Small Business Tax to Support Businesses
April 10, 2026
DUFFERIN-CALEDON – Our government is taking further action to protect workers, businesses and communities by reducing the small business corporate income tax rate from 3.2 percent to 2.2 percent over the next three years.
Announced as part of the 2026 Budget: A Plan to Protect Ontario, the $1.1 billion tax cut represents a 31.25 percent reduction in the current rate and will provide more than 375,000 small businesses across Ontario with up to $5,000 in annual tax relief.
“Small businesses are the backbone of Ontario’s economy,” said Sylvia Jones, MPP for Dufferin-Caledon. “From our main streets and farms to local manufacturers, retailers and service providers, this tax relief will help local businesses keep more of what they earn, reinvest in their operations and continue creating jobs in our community.”
The reduction is part of Ontario’s multi-year Tax Action Plan and builds on previous actions by our government to lower the small business tax rate from 3.5 percent to 3.2 percent in 2020.
At a time when many businesses continue to face rising costs, economic uncertainty and pressures related to U.S.-imposed tariffs, this tax cut is intended to provide immediate relief and support long-term growth.
In addition to reducing the small business corporate income tax rate, Ontario will also match new federal measures that allow businesses to accelerate the write-off of capital investments, including machinery, equipment and other assets.
Together, these measures are expected to provide more than $3.5 billion in additional Ontario income tax relief over the next four years.
For further details about the small business tax reduction or other provincial supports, contact MPP Sylvia Jones’ constituency office.
Media Contact
Office of MPP Sylvia Jones
180 Broadway, 3rd Floor, Suite A, Orangeville, ON L9W 1K3
Karol Jakubczak – Constituency Assistant
Karol.jakubczak@pc.ola.org
1-800-265-1603