Ontario cuts small business tax rate, boosts advisory centre funding
Ontario's 2026 budget reduces the small business tax rate to 2.2 per cent and invests $49 million in advisory centres over three years.
Govgrant newsroomOctober 21, 2026 · 2 min read- Tax rate cut
- From 3.2% to 2.2% on small business corporate income
- Annual savings per business
- Up to $5,000
- Businesses affected
- More than 375,000
- Advisory centre funding
- $49 million over three years
- Advisory centre locations
- More than 50 across Ontario
- Total annual savings
- $1.1 billion
What was announced
Ontario has introduced a small business tax cut and increased funding for its Small Business Advisory Centres as part of its 2026 budget. The small business corporate income tax rate has been reduced from 3.2 per cent to 2.2 per cent, delivering $1.1 billion in relief across the province. The government is also committing a record $49 million over the next three years to expand its network of advisory centres.
Who benefits from the tax cut
The tax rate reduction applies to more than 375,000 small businesses in Ontario. According to the government, eligible businesses could see up to $5,000 in annual savings. Ontario is home to over 500,000 small businesses that collectively employ close to 2.5 million people.
Ontario Small Business Advisory Centres
The province's network of Ontario Small Business Advisory Centres has more than 50 locations across the province. These centres offer one-on-one consultations, training programs, and information about provincial grants and support programs. The $49 million investment over three years is described as a record level of funding for the network.
Support for young entrepreneurs
Ontario continues to invest in programs aimed at young business owners and entrepreneurs. Futurpreneur and Summer Company remain part of the government's strategy to increase access to capital, networking opportunities, and training for emerging entrepreneurs, though the source does not specify new funding amounts or program changes.
Frequently asked questions
What is the new small business tax rate?
The small business corporate income tax rate has been reduced to 2.2 per cent, down from 3.2 per cent.
How much can a small business save annually from the tax cut?
The government states that eligible small businesses could see up to $5,000 in annual savings.
What services do Ontario Small Business Advisory Centres provide?
The centres offer one-on-one consultations, training, information about provincial programs and grants, and are located at more than 50 sites across Ontario.
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