Bill 12 explained in plain English
Cutting Taxes on Small Businesses Act, 2025
Ontario legislature bill summary, status, timeline, sponsor, votes, and official sources.
At a glance
Official Legislative Assembly of Ontario snapshot for 44th Parliament, 1st Session. Representative vote breakdowns appear when the Assembly publishes an Ayes and Nays page for the bill.
Our plain-language take, written for civic education.
Source: By PoliticalData.ca
Bill 12 proposes to increase Ontario's small business deduction rate to 9.9% and raise the business limit to $600,000, effective January 1, 2026.
This bill, titled the Cutting Taxes on Small Businesses Act, 2025, proposes to amend the Taxation Act, 2007. The main changes are to increase the Ontario small business deduction rate and to raise the business limit for the small business deduction. Specifically, the small business deduction rate would increase from 8.3 per cent to 9.9 per cent. The annual business limit for this deduction would increase from $500,000 to $600,000. The bill also adjusts a formula related to calculating the surtax for Ontario small businesses to reflect this increased limit. These changes are set to take effect on January 1, 2026, or upon Royal Assent if it occurs after that date.
- Increases the Ontario small business deduction rate from 8.3 per cent to 9.9 per cent.
- Increases the business limit for the small business deduction from $500,000 to $600,000 for a taxation year.
- Amends the formula used for calculating the surtax for Ontario small businesses to reflect the increased business limit.
- Sets the commencement date for these changes to January 1, 2026, or the date of Royal Assent if it occurs after January 1, 2026.
- Small businesses in Ontario
- Corporations operating in Ontario
- The Ontario Ministry of Finance (in its administration of tax law)
- Right for eligible small businesses to claim an increased small business deduction.
- Right for eligible small businesses to benefit from an increased business limit for the deduction.
- January 1, 2026
- The day Royal Assent is received, if it is after January 1, 2026.
- Potential reduction in corporate income tax for small businesses due to the increased deduction rate and limit.
- Potential impact on provincial tax revenue.
- The bill does not specify how the 'ratio of the number of days' in a taxation year will be applied for taxation years that straddle the effective date of January 1, 2026.
- The bill does not detail specific eligibility criteria for the small business deduction beyond what is established in the Taxation Act, 2007.
- The exact financial impact on the provincial treasury is not quantified within the bill text.
The bill amends sections of the Taxation Act, 2007, to increase the Ontario small business deduction rate and the business limit for this deduction. It also adjusts a surtax calculation.
Source: Section 1 and 2
This subsection is amended to change the Ontario small business deduction rate, introducing a new rate of 9.9 per cent for taxation years after December 31, 2025.
Source: Section 1 (1)
This subsection is amended to increase the maximum business limit for the small business deduction from $500,000 to $600,000 for a taxation year.
Source: Section 1 (2)
This clause is amended to increase the business limit for the small business deduction from $500,000 to $600,000.
Source: Section 1 (3)
This formula, used for calculating a surtax, is amended to reflect the increased business limit from $500,000 to $600,000.
Source: Section 2
Generated using AI from official bill text. Not legal advice. It is written by PoliticalData.ca for civic education, automatically checked and spot-reviewed before publishing.
Official textProcess Snapshot
Vote Summary
This bill is still active. We only show vote counts after the legislature publishes a recorded division.
No published representative vote breakdown
This bill is still moving through the process. When a recorded division is published, representative positions can be listed here.
Official sources
Status, sponsor, votes, and timeline on this page are drawn from these official legislative sources and public records. Each summary above is attributed to its own source.
How this data is sourced