role="main" class="main-container container js-quickedit-main-content" id="main-content">

Bill 12, Cutting Taxes on Small Businesses Act, 2025

Bowman, Stephanie

Current status:

First Reading Ordered for Second Reading

Please select

View bill

Status

Debates

Acts affected

Original

Bill 12 Original (PDF)

EXPLANATORY

NOTE

The

Bill amends the Taxation Act, 2007 .

Section

31 is amended to increase the Ontario small business deduction rate from 8.3

per cent to 9.9 per cent. The business limit for a taxation year for the

purposes of the small business deduction is increased from $500,000 to

$600,000.

The

formula in clause 32 (1) (

b) for calculating the surtax to be added by an

Ontario small business is also amended to reflect the increase of $500,000 to

$600,000.

The

amendments are to come into force on January 1, 2026.

Bill 12 2025

Act to amend the Taxation Act, 2007 to increase Ontario small business

deductions

His

Majesty, by and with the advice and consent of the Legislative Assembly of the

Province of Ontario, enacts as follows:

(1) Subsection 31 (4) of the Taxation Act, 2007

is amended by striking out “and” at the end of clause (

d) and by repealing

clause (

e) and substituting the following:

(e) 8.3

per cent multiplied by the ratio of the number of days in the taxation year

that are after December 31, 2019 and before January 1, 2026 to the total number

of days in the taxation year; and

(f) 9.9

per cent multiplied by the ratio of the number of days in the taxation year

that are after December 31, 2025 to the total number of days in the taxation

year.

(2) Subsection

31 (5) of the Act is amended by striking out “$500,000” and substituting

“$600,000”.

(3) Clause

31 (5.1) (

a) of the Act is amended by striking out “$500,000” and substituting

“$600,000”.

The formula in clause 32 (1) (

b) of the Act is amended by striking out

“$500,000” wherever it appears and substituting in each case “$600,000”.

Commencement

This Act comes into force on January 1, 2026 or, if this Act receives Royal

Assent after that day, this Act is deemed to have come into force on that day.

Short

title

The

short title of this Act is the Cutting Taxes on Small

Businesses Act, 2025 .

Date Bill stage Event Outcome Committee

May 6, 2025

First Reading

Ordered for Second Reading

May 6, 2025

First Reading

Vote

Carried

First Reading

May 6, 2025

Carried

Ordered for Second Reading