Lowering of Effective Corporate Tax Rates in Canada: Complete 2025-2030 Guide

A Corporate Tax Revolution for Canadian Businesses

Budget 2025 represents a transformative moment for Canadian corporate taxation, introducing significant measures designed to lower the effective corporate tax rate and position Canada as one of the most competitive corporate tax jurisdictions in the world. Through a landmark “Productivity Super-Deduction” and strategic provincial tax changes, Canada is reducing its marginal effective tax rate (METR) by more than two percentage points, from fifteen point six percent to thirteen point two percent—the lowest in the G7 and competitive with the United States across all major economic sectors.

This historic shift comes as Canada faces productivity challenges and intensifying competition for capital investment from the United States, which implemented substantial business tax cuts through its One Big Beautiful Bill Act (OBBBA). The Productivity Super-Deduction directly counters American tax advantages, making Canada an increasingly attractive destination for private capital investment, manufacturing expansion, and technology development.

This comprehensive guide explains how Canada’s effective corporate tax rates are being lowered, which businesses benefit most, the specific tax incentives included in the Productivity Super-Deduction, how this compares to United States corporate taxation, and what BOMCAS Canada offers to help Canadian corporations maximize benefit from these historic tax reductions.

Understanding Corporate Tax Rates in Canada

Marginal Effective Tax Rate (METR): The True Measure of Corporate Taxation

To understand the corporate tax rate reduction, you must first understand the concept of marginal effective tax rate (METR). The statutory corporate tax rate—the percentage you see quoted (such as fifteen percent federal or nine percent small business rate)—does not capture the true economic tax burden on business investment.

The METR accounts for federal corporate income tax rates, provincial and territorial corporate income tax rates, investment tax credits, capital cost allowance deductions, payroll taxes, sales taxes, and other taxes affecting business investments. It measures the effective tax rate applied to a new business investment when you account for the complete tax burden from all sources.

For example, a manufacturing business investing one million dollars in new equipment faces federal and provincial income taxes on profits, sales taxes on equipment purchases (though many are recoverable through input tax credits), property taxes, and other taxes. The METR calculates the true economic tax rate affecting the investment’s profitability.

Prior to Budget 2025, Canada’s METR stood at fifteen point six percent. The Productivity Super-Deduction reduces this to thirteen point two percent, maintaining Canada’s status as the world’s lowest among G7 nations.

Two Different Corporate Tax Rates

Canadian corporations face two primary federal corporate income tax rates depending on business size and income type:

General Corporate Tax Rate: Fifteen percent on all income not eligible for the small business deduction. This rate applies to large corporations and to all income of small corporations exceeding the small business deduction limit.

Small Business Rate: Nine percent on active business income up to the annual business limit (five hundred thousand dollars federally). This rate applies to Canadian-Controlled Private Corporations (CCPCs) earning active business income within the limit. The small business rate is substantially lower than the general rate, providing powerful incentives for business structure planning and income management.

Provincial and territorial governments establish their own corporate tax rates, typically varying from zero percent (in provinces like Manitoba and Saskatchewan on portions of small business income) to higher rates in Atlantic provinces and territories. Combined federal-provincial rates typically range from approximately nine to thirteen percent on small business income and thirteen to eighteen percent on general corporate income, depending on the province or territory.

The Productivity Super-Deduction: Core Components

What Is the Productivity Super-Deduction?

The Productivity Super-Deduction is a comprehensive suite of accelerated tax deductions introduced in Budget 2025 designed to encourage capital investment and improve productivity. Rather than a single measure, it combines multiple tax incentives that allow businesses to deduct capital expenditures more quickly than traditional capital cost allowance (CCA) methods.

Under traditional CCA rules, capital investments are depreciated over many years based on predetermined schedules. For example, buildings are typically depreciated at four percent annually, manufacturing equipment at twenty percent annually, and vehicles at thirty percent annually. These rates mean it takes many years to fully deduct the cost of an investment.

The Productivity Super-Deduction accelerates these deductions through various mechanisms, allowing businesses to write off larger portions of capital investment costs immediately or in earlier years, dramatically reducing the cost of capital investment and improving investment attractiveness.

Immediate Expensing for Manufacturing and Processing Buildings

One of the most significant Productivity Super-Deduction components is immediate expensing for manufacturing or processing buildings. This measure allows manufacturers and processors to deduct one hundred percent of eligible building acquisition costs in the first year the property is placed in use for manufacturing or processing activities.

Under traditional CCA, a manufacturer constructing a ten-million-dollar manufacturing facility would deduct approximately four hundred thousand dollars (four percent of ten million dollars) in the first year, taking approximately twenty-five years to fully deduct the cost. Under the new immediate expensing measure, the entire ten-million-dollar cost is deductible in the first year the building is used for manufacturing or processing.

This represents a transformative incentive for capital-intensive manufacturing operations. The elimination of multi-year depreciation means manufacturers recover their capital investment immediately, dramatically improving cash flow and project economics.

Eligibility Criteria:

• Building must be acquired on or after November 4, 2025 (Budget Day)
• Building must be used for manufacturing or processing before 2030
• At least ninety percent of use must be for manufacturing or processing activities
• Canadian property located in Canada qualifies

Phase-Out Schedule:

• 2025-2029: One hundred percent first-year expensing
• 2030-2031: Seventy-five percent first-year expensing
• 2032-2033: Fifty-five percent first-year expensing
• 2034 and beyond: Regular CCA (four percent annually)

Immediate Expensing for Manufacturing Machinery and Equipment

Complementing building expensing, Budget 2025 also introduces immediate expensing for manufacturing or processing machinery and equipment. Rather than depreciating equipment over many years, manufacturers can now deduct one hundred percent of equipment costs in the year acquired.

Examples of eligible machinery and equipment include:

• Production machinery and equipment
• Assembly line equipment
• Quality control equipment
• Material handling equipment
• Equipment required for manufacturing processes

For a manufacturer investing five hundred thousand dollars in new CNC (computerized numerical control) machines, the entire investment generates a five-hundred-thousand-dollar tax deduction in year one, dramatically improving year-one tax position compared to traditional depreciation over five to ten years.

Immediate Expensing for Clean Energy and Zero-Emission Equipment

The Productivity Super-Deduction includes immediate expensing for clean energy and zero-emission assets, recognizing Canada’s environmental commitments while encouraging investment in green technology. Eligible assets include:

• Clean energy generation equipment (solar panels, wind turbines, hydroelectric equipment)
• Energy conservation and efficiency equipment (LED lighting systems, high-efficiency HVAC systems, building automation systems)
• Zero-emission vehicles (electric vehicles, hydrogen fuel cell vehicles)
• Charging infrastructure for electric vehicles
• Energy storage systems and battery technology

For businesses transitioning to clean energy or green operations, immediate expensing eliminates the tax barriers to environmental investment, making green technology economically attractive independent of operational benefits.

Immediate Expensing for Productivity-Enhancing Assets

Beyond manufacturing and manufacturing equipment, the Productivity Super-Deduction includes immediate expensing for productivity-enhancing assets essential to modern business operations:

• Patents and intellectual property
• Data network infrastructure
• Computers and information technology equipment
• Software and cloud computing infrastructure

These assets drive productivity improvement across all sectors, from technology companies to financial institutions to professional service providers. Immediate expensing encourages businesses to invest in technology and productivity improvements that enhance competitiveness.

Immediate Expensing for Scientific Research and Experimental Development (SR&ED)

Businesses engaging in scientific research and experimental development can now immediately expense capital expenditures related to SR&ED activities. This includes:

• Laboratory equipment
• Research facilities and infrastructure
• Testing and validation equipment
• Specialized technology for research purposes

Combined with enhanced SR&ED investment tax credits (increased from twenty percent to thirty-five percent on many expenditures), this creates powerful incentives for businesses developing new technologies and processes.

Reinstatement of the Accelerated Investment Incentive

The Productivity Super-Deduction reinstates the Accelerated Investment Incentive, previously eliminated at the end of 2027. This measure provides an enhanced first-year write-off (fifty percent) for most capital assets not covered by the specific immediate expensing measures above.

Assets eligible for the Accelerated Investment Incentive include:

• Office buildings and commercial real estate
• Retail facilities
• Vehicles (non-zero-emission)
• Office equipment and furniture
• General machinery and equipment

The fifty percent first-year write-off means businesses recover half their capital investment cost in year one, dramatically improving cash flow compared to traditional CCA depreciation.

Accelerated Depreciation for Low-Carbon LNG Facilities

Recognizing Canada’s energy sector importance, Budget 2025 introduces accelerated capital cost allowance rates for low-carbon liquefied natural gas (LNG) facilities and related equipment meeting specified emissions performance measures.

This incentive encourages energy companies to invest in low-carbon energy production, combining energy security with environmental responsibility. LNG producers can depreciate eligible facilities more quickly, improving project economics for capital-intensive energy infrastructure.

How the Productivity Super-Deduction Works: Practical Example

Manufacturing Business Investment Scenario

Consider a Canadian manufacturing company planning to expand operations by establishing a new manufacturing facility. The project involves:

• Construction of a five-million-dollar manufacturing building
• Equipment purchases totaling two-million-dollars
• Technology and productivity systems costing five hundred thousand dollars
• Total capital investment: Seven point five million dollars

Under Traditional CCA Rules:

Under Productivity Super-Deduction:

Tax Benefit Calculation

Using a combined federal-provincial corporate tax rate of twenty-six percent:

Under Traditional CCA:

• Year 1 tax savings: Seven hundred thousand dollars times twenty-six percent equals one hundred eighty-two thousand dollars

Under Productivity Super-Deduction:

• Year 1 tax savings: Seven point five million dollars times twenty-six percent equals one point nine five million dollars

Additional Year 1 Tax Benefit: One point seven six eight million dollars

The Productivity Super-Deduction generates an additional one point seven sixty-eight million dollars in year-one tax savings compared to traditional depreciation, dramatically improving project cash flow and reducing the capital required to fund expansion.

Federal and Provincial Corporate Tax Rate Changes

Federal Changes

The federal government implements the Productivity Super-Deduction through accelerated deductions but does not change the statutory federal corporate tax rates. The nine percent small business rate and fifteen percent general corporate rate remain unchanged.

However, the accelerated deductions effectively reduce the economic tax rate applied to capital investment, which is why the METR decreases from fifteen point six to thirteen point two percent despite unchanged statutory rates.

Provincial and Territorial Changes

Several provinces and territories announced corporate tax rate changes in 2025, complementing the federal Productivity Super-Deduction:

Nova Scotia (Effective April 1, 2025):

• Small business tax rate reduced from two point five percent to one point five percent
• Small business income threshold increased from five hundred thousand dollars to seven hundred thousand dollars
• These changes position Nova Scotia to attract small business investment with one of Canada’s lowest small business rates

Prince Edward Island (Effective July 1, 2025):

• General corporate tax rate reduced from sixteen percent to fifteen percent
• Small business income threshold increased from five hundred thousand dollars to six hundred thousand dollars
• Combined federal-provincial small business rate: approximately nine to ten percent (among Canada’s lowest)

Ontario and Other Provinces:

• No statutory rate changes announced for 2025
• Combined effect of federal Productivity Super-Deduction provides enhanced incentives without provincial rate changes

Impact on Combined Federal-Provincial Rates

The combination of federal accelerated deductions and provincial rate reductions significantly improves Canada’s competitive position. A manufacturing company earning one million dollars in active business income now faces:

• Alberta: Approximately ten percent combined federal-provincial small business rate (nine percent federal plus one percent Alberta)
• Ontario: Approximately twelve percent combined rate (nine percent federal plus three point two percent Ontario)
• Nova Scotia: Approximately ten point five percent combined rate (nine percent federal plus one point five percent Nova Scotia)

These rates are now competitive with or superior to comparable U.S. states, representing a transformation from Canada’s previous tax disadvantage.

Marginal Effective Tax Rate Comparison: Canada vs. United States

Canada’s METR Achievement

Budget 2025 reduces Canada’s METR to thirteen point two percent, the lowest in the G7 and below the OECD average of sixteen point two percent. This achievement is particularly significant considering the United States’ METR stands at approximately seventeen point seven percent.

The thirteen point two percent Canadian METR provides a meaningful competitive advantage over the United States of approximately four point five percentage points. This advantage makes Canada increasingly attractive for new capital investment in manufacturing, technology, and other productive sectors.

Sector-Specific Comparison

The METR advantage is particularly pronounced in manufacturing and processing sectors, where the Productivity Super-Deduction provides maximum benefit through immediate expensing.

Manufacturing Sector METR:

• Canada: Estimated three percent or lower
• United States: Approximately nineteen to twenty percent
• Canada’s Advantage: Sixteen to seventeen percentage points

For capital-intensive manufacturing operations, this dramatic advantage represents hundreds of millions of dollars in tax savings on billion-dollar investments over project lifespans.

U.S. Tax Changes Context

The Productivity Super-Deduction responds to the United States’ One Big Beautiful Bill Act (OBBBA), enacted in 2024-2025, which provided:

• Full expensing for business capital expenditures
• Reduction in pass-through entity tax rates
• Enhanced research and development credits
• Accelerated depreciation measures

While U.S. measures provided powerful investment incentives, Canada’s Productivity Super-Deduction now provides comparable or superior incentives, positioning Canada competitively for attracting mobile capital investment previously attracted to the United States.

Small Business Deduction Enhancements and Eligibility

2022 Changes: Taxable Capital Threshold Expansion

Preceding Budget 2025, the 2022 Federal Budget expanded small business deduction eligibility by increasing the taxable capital threshold from fifteen million dollars to fifty million dollars. This change allows medium-sized corporations to access small business deduction benefits.

Previously, a CCPC with twenty-five million dollars in taxable capital lost access to any small business deduction. Under the expanded rules, a twenty-five-million-dollar CCPC retains access to approximately sixty-three percent of the five-hundred-thousand-dollar business limit, saving approximately fifteen thousand dollars in annual federal income tax.

This change particularly benefits growing businesses that accumulate capital through reinvested profits but want to maintain small business deduction access during expansion phases.

Passive Investment Income Restriction

Despite expanded capital thresholds, the small business deduction remains restricted when businesses earn substantial passive investment income. If a CCPC earns more than fifty thousand dollars in investment income (interest, dividends, capital gains) in a year, the business limit is reduced by five dollars for every one dollar of investment income earned above fifty thousand dollars.

Once investment income exceeds one hundred fifty thousand dollars in a year, the business limit is eliminated entirely, and all active business income is taxed at the fifteen percent general corporate rate regardless of the corporation’s size.

For corporations carrying substantial investment portfolios or deriving significant investment income alongside active business operations, this restriction can eliminate small business deduction benefits. Strategic planning to manage investment income timing and structure can help preserve small business deduction eligibility.

Cancellation of the Canadian Entrepreneurs’ Incentive

What Was the Canadian Entrepreneurs’ Incentive?

The Canadian Entrepreneurs’ Incentive, announced in Budget 2024, was a special capital gains tax incentive for qualifying entrepreneurs. The measure would have allowed Canadian-resident individuals to claim a reduced fifty percent capital gains inclusion rate (equivalent to seven point five percent capital gains tax rate for those in the highest bracket) on up to two million dollars of lifetime eligible capital gains from small business share sales.

Over a five-year phase-in (four hundred thousand dollars in year one, increasing to two million dollars by year five), business owners could have substantially reduced capital gains taxation on business sales.

Why Was It Cancelled?

Budget 2025 cancelled the Canadian Entrepreneurs’ Incentive along with the proposed capital gains tax inclusion rate increase. The government’s logic was that the Incentive was announced specifically to mitigate the impact of a proposed capital gains tax increase. Since the government cancelled the proposed capital gains increase, the offsetting Incentive was no longer necessary.

Additionally, the cancellation eliminates complexity in the tax code. The Incentive would have required detailed tracking of eligible versus ineligible capital gains, calculation of lifetime limits and phase-in amounts, and extensive documentation. Eliminating the measure simplifies tax administration for both businesses and the CRA.

Impact on Business Owners

For entrepreneurs planning business sales, the cancellation of the Canadian Entrepreneurs’ Incentive means no special capital gains incentive is available. Business sale capital gains are taxed at the standard inclusion rate of fifty percent (meaning fifty percent of the capital gain is included in taxable income).

However, all Canadian taxpayers retain access to the Lifetime Capital Gains Exemption (one million two hundred fifty thousand dollars indexed annually for 2025), which eliminates tax on this amount of eligible capital gains. For most small business owners, the Lifetime Capital Gains Exemption provides substantial tax relief on business sales, even without the Entrepreneurs’ Incentive.

Scientific Research and Experimental Development (SR&ED) Enhancement

Enhanced Investment Tax Credit Rates

Budget 2025 significantly enhances the Scientific Research and Experimental Development (SR&ED) program through increased investment tax credits:

Previous SR&ED Rates:

• Non-capital SR&ED expenditures: Twenty percent federal credit
• Capital SR&ED expenditures: Twenty percent federal credit

Enhanced SR&ED Rates (Budget 2025):

• Non-capital SR&ED expenditures: Thirty percent federal credit for qualifying expenditures up to four point five million dollars
• Capital SR&ED expenditures: Thirty-five percent federal credit for qualifying capital expenditures up to four point five million dollars (increased from six million dollars in the Fall Economic Statement, now six million dollars)

These enhancements make the SR&ED program significantly more valuable for technology companies, manufacturers, and other businesses conducting qualifying research and development.

Extended Phase-Out Timeline

Previously, enhanced SR&ED tax credit rates were scheduled to be reduced by half beginning in 2031. Budget 2025 extends the full enhanced rates through December 31, 2035, providing multi-year certainty for businesses planning research investments.

After 2035, reduced rates apply for expenditures incurred between 2036 and 2040, with further reductions thereafter. This extended timeline removes near-term uncertainty about SR&ED credit values.

Expanded Eligibility

Budget 2025 expands SR&ED eligibility to include certain Canadian public corporations previously excluded from the program. This expansion increases the number of businesses that can claim valuable SR&ED credits, particularly benefiting larger research-focused companies.

Additionally, eligibility for specific capital expenditures under SR&ED is restored, allowing businesses to claim capital credits on equipment and facilities used in qualifying research.

U.S. Competitiveness Context: Why These Changes Matter

The Productivity Crisis

Canada faces a well-documented productivity crisis, with Canadian workers producing less output per hour than their American and other developed-nation counterparts. The Bank of Canada, Parliamentary Budget Office, and international organizations consistently identify productivity as a critical challenge threatening Canadian living standards and competitiveness.

The Productivity Super-Deduction directly addresses this crisis by making capital investment—the primary driver of productivity improvement—substantially more attractive economically. Businesses investing in new equipment, technology, and facilities generate larger tax savings, improving after-tax returns and accelerating investment decisions.

Capital Flight Concerns

Canada faces intensifying competition for capital investment from the United States, particularly following U.S. tax reforms. American businesses expand production in the U.S. rather than Canada when U.S. tax incentives provide superior returns. Canadian businesses consider relocating operations to the U.S. for tax reasons.

The Productivity Super-Deduction and accompanying provincial tax rate reductions reduce capital flight incentives by making Canada competitive with the U.S. across major sectors. A manufacturer considering whether to locate a five-billion-dollar production facility in Canada or the U.S. finds Canadian tax incentives now comparable or superior.

Jobs and Economic Growth

Tax policy changes translating to capital investment translate to economic growth, job creation, and wage growth. Workers in capital-intensive industries benefit most, as increased capital per worker generates higher productivity and justifies higher wages. Manufacturing communities, technology hubs, and industrial regions benefit from renewed investment competitiveness.

BOMCAS Canada: Expert Corporate Tax Planning and Optimization

BOMCAS Canada specializes in comprehensive corporate income tax planning and preparation for Canadian corporations of all sizes, from small businesses to larger private corporations. The firm’s deep expertise in Canadian corporate taxation helps businesses optimize their tax positions and maximize benefit from historic tax rate reductions and productivity incentives.

Corporate Tax Preparation and Compliance

BOMCAS Canada provides complete corporate income tax return preparation for Canadian-Controlled Private Corporations (CCPCs) and other corporate entities. Services include:

T2 Corporate Income Tax Return Preparation: Complete preparation of T2 returns including all required schedules, ensuring accurate reporting of corporate income, deductions, tax credits, and tax liability. The firm ensures compliance with all CRA requirements and maximizes available deductions and credits.

Multiple Jurisdiction Compliance: For corporations operating across multiple provinces or territories, BOMCAS Canada ensures compliance with all applicable federal and provincial corporate tax requirements. Provincial filing obligations, provincial tax credits, and multi-jurisdiction planning are expertly managed.

Financial Statement Coordination: BOMCAS Canada coordinates corporate tax preparation with financial statement preparation (balance sheets and income statements), ensuring consistency between financial reporting and tax reporting while understanding differences between book income and taxable income.

Productivity Super-Deduction Optimization

Given the transformative impact of the Productivity Super-Deduction on business investment returns, BOMCAS Canada provides expert guidance on maximizing these benefits:

Capital Investment Analysis: The firm analyzes planned capital investments to identify which assets qualify for immediate expensing and which qualify for accelerated depreciation, ensuring maximum tax benefit.

Timing Optimization: For businesses planning multiple capital projects, BOMCAS Canada develops strategic timing plans that maximize tax benefits. Accelerating projects planned for 2030 into the 2025-2029 period captures full one-hundred-percent expensing before phase-out begins.

Asset Categorization: Proper classification of capital expenditures is essential for maximizing Productivity Super-Deduction benefits. BOMCAS Canada ensures assets are correctly categorized as manufacturing or processing buildings, eligible equipment, clean energy assets, or productivity-enhancing assets to capture maximum benefits.

Provincial Coordination: With Nova Scotia, Prince Edward Island, and other provinces implementing complementary tax changes, BOMCAS Canada coordinates federal and provincial planning to optimize combined benefits.

Small Business Deduction Maximization

BOMCAS Canada provides specialized expertise in small business deduction planning for CCPCs:

Business Limit Optimization: The firm analyzes your corporation’s taxable capital and passive investment income to ensure you maximize access to the five-hundred-thousand-dollar business limit or applicable portion based on size thresholds.

Passive Income Management: For corporations earning investment income alongside active business income, BOMCAS Canada develops strategies to preserve small business deduction benefits. Income timing, investment structure, and corporate organization decisions can prevent passive income from eliminating active business deduction benefits.

Corporate Structure Planning: For growing businesses, BOMCAS Canada evaluates whether your current corporate structure optimizes small business deduction benefits. As businesses cross the ten-million-dollar and fifty-million-dollar taxable capital thresholds, strategic planning ensures continued access to maximum available small business deduction.

SR&ED Credit Optimization

For technology companies and research-focused businesses, BOMCAS Canada provides expert SR&ED (Scientific Research and Experimental Development) optimization:

SR&ED Eligibility Assessment: The firm identifies projects and expenditures qualifying for SR&ED credits, ensuring you claim all eligible research activities and costs.

SR&ED Documentation: Proper documentation is essential for CRA acceptance of SR&ED claims. BOMCAS Canada helps establish documentation systems ensuring technical descriptions, project timelines, and detailed expenditure tracking support SR&ED claims.

Credit Maximization: With enhanced federal SR&ED credits now available (thirty to thirty-five percent depending on expenditure type and limits), BOMCAS Canada ensures you capture maximum credit benefits on eligible research spending.

Multi-Year Planning: Extended SR&ED timelines through 2035 allow multi-year planning. BOMCAS Canada develops strategies that efficiently allocate research spending across years to maximize credit benefits.

Capital Cost Allowance (CCA) Strategy

Beyond Productivity Super-Deduction planning, BOMCAS Canada provides ongoing CCA optimization for assets not eligible for immediate expensing:

Asset Classification: Proper CCA class assignment is critical. Different asset classes have different depreciation rates. BOMCAS Canada ensures all assets are classified in appropriate CCA classes maximizing available deductions.

First-Year CCA Planning: The half-year rule allows fifty-percent CCA on year-one additions. Strategic timing of asset acquisitions can optimize first-year deductions.

CCA Pool Management: The firm manages undepreciated capital cost (UCC) pools across multiple years, optimizing depreciation timing and managing recapture when assets are sold.

Corporate Dividend and Distribution Planning

BOMCAS Canada provides expert planning on corporate dividend distribution strategies:

Dividend Vs. Salary Analysis: For business owners extracting funds from corporations, the firm analyzes whether dividends or salaries generate greater after-tax benefit considering corporate tax rates, personal tax rates, and CPP/EI implications.

Refundable Dividend Tax Credit (RDTC): For corporations earning substantial investment income, the firm optimizes use of refundable dividend tax credits to manage combined tax cost of corporate earnings and shareholder dividends.

Estate Planning Integration: Dividend distribution strategies are coordinated with long-term estate planning objectives, ensuring business succession plans align with tax-efficient distribution strategies.

Virtual Corporate Tax Services

BOMCAS Canada delivers all corporate income tax services virtually, serving Canadian corporations across all provinces and territories. Virtual service delivery:

• Eliminates geographic barriers—access expert corporate tax professionals regardless of location
• Provides flexible scheduling accommodating business operations
• Reduces overhead costs, translating to competitive pricing compared to traditional office-based accounting firms
• Maintains secure, professional service quality and CRA compliance

Why Choose BOMCAS Canada for Corporate Tax Services

BOMCAS Canada combines comprehensive expertise in Canadian corporate income taxation with:

• Deep knowledge of Productivity Super-Deduction rules and optimization opportunities
• Expertise in small business deduction planning and eligibility management
• SR&ED program mastery helping technology and research businesses maximize credits
• Multi-jurisdiction experience ensuring compliance across all provinces and territories
• Strategic planning perspective ensuring current-year tax optimization aligns with long-term business objectives
• Commitment to identifying all available tax deductions, credits, and incentives
• Professional excellence maintaining highest service standards and CRA compliance

Whether you operate a small CCPC, a growing technology company, a manufacturing business, or a larger private corporation, BOMCAS Canada provides the expert corporate income tax planning and preparation services Canadian businesses need to optimize tax positions and maximize after-tax profitability.

Key Dates and Implementation Timeline

November 4, 2025: Budget Day—effective date for Productivity Super-Deduction eligibility (manufacturing buildings must be acquired after this date to qualify)

Before 2030: One-hundred-percent expensing available for eligible manufacturing buildings, machinery, equipment, and other qualifying assets

2030-2031: Seventy-five-percent expensing for manufacturing buildings (phase-out begins)

2032-2033: Fifty-five-percent expensing for manufacturing buildings (phase-out continues)

2034 and beyond: Regular CCA depreciation resumes for manufacturing buildings

April 1, 2025: Nova Scotia small business tax rate reduction to one point five percent takes effect

July 1, 2025: Prince Edward Island general rate reduction to fifteen percent and small business threshold increase to six hundred thousand dollars take effect

December 31, 2035: Enhanced SR&ED tax credit rates expire; reduced rates apply for 2036-2040 expenditures

Conclusion: A Transformational Moment for Canadian Business Taxation

The lowering of Canada’s effective corporate tax rate through Budget 2025’s Productivity Super-Deduction represents a transformational shift in Canadian business taxation. By reducing the marginal effective tax rate to thirteen point two percent—the lowest in the G7—Canada positions itself as an exceptionally competitive jurisdiction for capital investment and business operations.

For manufacturers, the immediate expensing of manufacturing buildings and equipment eliminates the multi-year depreciation burden, dramatically improving project economics and investment attractiveness. For technology companies, enhanced SR&ED credits and immediate expensing of IT infrastructure accelerate innovation investment. For all businesses, accelerated depreciation of capital assets improves cash flow and reduces after-tax investment costs.

Combined with provincial tax rate changes, the Productivity Super-Deduction creates a comprehensive corporate tax environment substantially more competitive than in prior years and now fully competitive with the United States.

BOMCAS Canada provides the expert corporate income tax planning and preparation services Canadian corporations need to optimize their tax positions and maximize benefit from these historic tax changes. From Productivity Super-Deduction optimization to small business deduction maximization to SR&ED credit capture, BOMCAS Canada’s experienced tax professionals help Canadian corporations achieve tax efficiency while maintaining complete CRA compliance.

Contact BOMCAS Canada today for a complimentary consultation to discuss your corporation’s specific situation and explore how the Productivity Super-Deduction, small business deduction enhancements, and other tax measures can optimize your corporate tax position and improve after-tax profitability. The firm’s experienced corporate tax professionals are ready to help your business capitalize on these transformational tax opportunities.